PwC: Credible Data Needed to De-risk Nigeria’s Mining Sector

By Ndubuisi Francis in Abuja

The availability of credible data on Nigeria’s mining potential will help de-risk the mining sector and attract the much-needed investment inflow, global professional services firm, PricewaterhouseCoopers (PwC), has said.

PwC, which has been in collaboration with the government to help Nigeria develop the mining sector also identified artisanal ownership, smuggling of mined items, infrastructure deficit and funding constraints as some of the major challenges confronting the sector.

Two top officials of the firm—the Associate Director, Energy, Utilities & Resources, Habeeb Jaiyeola and Partner, Corporate Finance, Andrei Ugarov, spoke with THISDAY in separate interviews on the sidelines of the recently-concluded Nigerian Mining Week, in Abuja.

According to Jaiyeola, funding remains one of the major challenges confronting the sector, but pointed out that this could be addressed to a large extent by providing credible data on Nigeria’s mining potential.

Credible data, Jaiyeola argued, has the capacity of de-risking the sector by giving potential investors accurate information on mining deposits, which persuade such investor to make informed investment decisions.

 “Data is one of the critical factors of the mining sector. Without data, you cannot typically market any mineral resource to an investor. Right now, from the conversations which have been held, we are aware that a lot of data-gathering contracts have been signed with data gathering companies.

“We’re seeing that effort where government is investing into data-gathering. The government is working towards ensuring that we have data on several minerals so that investors can pay and access. So, the conversations are ongoing. We’re aware that the government is making efforts to ensure that there is bankable data for the mining sector,” he said.

Jaiyeola noted that the data conversation was one of the areas to de-risk the mining industry, adding that “any fund provider, when they see the gain to be gotten, will definitely put in funds there.”

“But you need to show them value first. Data is the first port of call. By the time we have more data-collection in-country, then the funding will follow.

“Without data, banks and the financiers will be a bit apprehensive about where they are putting their funds because they are not certain if there is commercial quantity available to whatever mineral they are going into.

“So, data will support that the minerals exist and exist in commercial quantity, and the returns will be profitable, hence the fund providers will certainly put in the funds.

“So, we expect that the time this data issue is solved, and several others like infrastructural issues are solved, we are able to create mining value chain up to sale, which can be easily done and profitable, then funding will certainly follow,” Jaiyeola added.

The PwC official also commented on the Solid Mineral Development Fund (SMDF), which he said the government was working to ensure that artisanal miners (small-scale miners) form cooperatives.

This fund, he stated, would help them develop their mining sites and move towards a better  mining and  more funds.

Also speaking on Nigeria’s mining sector, PwC’s Partner, Corporate Finance, Andrei Ugarov, observed that the Nigerian mining sector is not yet very developed, adding that  a large part of the work his firm was doing is to work with the government. to develop the sector.

“We have an involvement with some private sector companies who are setting up. We have memoranda of understanding (MoU) with the setting up. But I think our work with the government is developing the right concept, right strategy around the direction the mining sector is taking.”