The Federal Government’s plan to diversify the nation’s economy leveraging the solid minerals development cannot be funded by banks in the country, a former Managing Director of Nigerian Mining Corporation, Dr. Biodun Olorunfemi, has said.
Olorunfemi, who is currently the Vice-President, Mineral Watch Global Investment Company Limited, said in an interview with our correspondent that only the stock exchange had the capacity to provide the funding required for the development of the mining sector.
According to Olorunfemi, a former High Commissioner of Nigeria to Namibia, Nigeria is still far from being a mining nation as the best that can happen to the country now is to lay a solid foundation for mining development.
He said, “The private sector drive must go pari-passu with government activities. There are agencies and there are players that must come into this playing field. The playing field, which defines the value chain, starts from exploration; mine planning, mine development, exploitation, processing and marketing.
“It is a chain. And in this chain, unless all the activities are there, it will not work. The capital must be there. The banks in Nigeria cannot play a role because they have limited financial competence. Even if they have financial competence, they must be able to produce depositors’ money on demand. So the way to raise money for the sector is through the stock exchange.
“The stock exchange is where to raise money for the mining sector. So, the stock exchange must play its role by raising funds. That is the model in America, Canada and Australia. Everyday, millions of dollars are raised on the stock exchange for mining business. All major mining companies raise funds through the stock exchange. That allows them to go to other parts of the world in a proper manner; in a proper manner in the sense that it is planned.”
He also said, “You raise money based on the plans that you have to go into one clime or the other. The insurance industry also comes in. It is a total package and chain. The logistics and service companies must be up and doing. This government has taken the first fantastic step signalling to the world that this sector is a priority sector. This step has given confidence to the world that they must do a number of things that must make it happen.
“It has also given signal by providing an intervention fund. It is like when you provide a seed fund. Money can come from other sources when the seed fund is available. But the way to raise real money for the sector is through the stock exchange.”
Olorunfemi said the International Mining Investment Conference and Exhibition to hold in the country soon would address salient issues in the sector and present ideas from expertise perspective to move the country forward.