Nigeria bets on grants to unearth mineral riches

The Nigerian government is investing in grants to stimulate the discovery of new commercial mining and processing opportunities as part of its strategy to capture a larger share of African mining investment. The Solid Minerals Development Fund, a government agency, will provide up to 70% of the cost of exploration projects by mining license holders in Nigeria.

The aim is to identify untapped reserves of over 44 minerals, particularly those used in batteries and digital infrastructure, across 500 locations in the country. This initiative is in line with the broader African movement to reduce raw mineral exports and promote local value addition. While Nigeria's mining sector currently contributes barely 1% to the economy, President Bola Tinubu's administration is striving to diversify government revenues away from export receipts.

The government has formed a partnership with Africa Finance Corporation, a multilateral lender based in Lagos, to de-risk mining projects and attract private capital. A key project under this partnership is an alumina refinery that could add $1.2 billion annually to the economy. Nigeria estimates the value of its untapped mineral deposits at more than $700 billion.

The grants program has attracted hundreds of applications since its launch in June, with the fund currently appraising multiple projects for funding.