Mining intervention fund: Miners urge BoI to relax conditions
Miners say they will not be able to access the N5 billion Artisanal and Small Scale (ASM) Mining intervention fund from the Bank of Industry (BoI) unless its terms and conditions are relaxed.
The miners told the News Agency of Nigeria in Abuja on Sunday that the terms and conditions attached to the intervention fund were too stringent for ASM to fulfil in order for them to access the fund.
Ministry of Mines and steel Development had signed a Memorandum of Understanding (MoU) with BoI to give N5 billion intervention fund to Artisanal and Small-Scale Miners across the country.
The intervention fund is a joint venture whereby, the bank provides N2.5 billion while the Federal Government provides the balance of N2.5 billion making a total of N5 billion.
This effort is a plan by the Federal Government through the ministry to rejuvenate the mining sector as a means of economic diversification.
Under the scheme, the artisanal miners could access from N100,000 to N10 million, while small scale miners could access from N10 million to N100 million.
The loans are to be made available to certified industry participants at a single digit interest rate of 5 percent per annum.
The aim of the intervention fund was to address insufficient funding and access to capital, which is a major factor militating against artisanal and small-scale miners operations.
The fund would also help to integrate the artisanal and small scale miners into formal sector, enhance their growth and development in a structured manner, and spur productivity and job creation in the mining sector.
The fund would be available in form of loans or working capital to be utilised for the purchase of requisite items of plant and machinery.
It would also be used for payment of drilling, geological and other services related to mining business as required, among others.
The small-scale miners are companies that hold a small-scale mining licence/leases while the artisanal miners are defined as mining labourers.
The artisanal miners work for legal titleholders just in a similar way the building engineer needs building labourers.
However, as a result of lack of organised system in the industry, they involved illegal mining.
Presently, these target groups are facing a lot of difficulties ranging from lack of capacity both in terms of equipment and working capital as well as organisation.
These groups of miners have been yearning and calling on the government to make the intervention fund available, as no miner has been able to access a dime since the scheme was initiated in 2017.
Lawal Mayere, chairman, Miners Association of Nigeria Kaduna State chapter, said the document required by BoI from these groups were too cumbersome for them to provide.
The pre-documents that should be provided by ASM include, application letters, completed BoI questionnaire business Plan/Feasibility study.
Others are certificate of Incorporation, certified true copy of form CAC 2.5, 2.3 and 2.1, quotation for supply of items of plants and machinery, quotation for Raw Materials such as explosives, and consumables among others.
According to part of the bank’s condition, loans below N10 million requires no collateral but two guarantors, while N10 million to N100 million requires collateral in terms of fixed assets.
Mayere said that the repayment of the loan was another condition that would be difficult for this group of people to meet.
“The repayment for N10 million and below is one year and the repayment for N10 million and above is five years with moratorium period of six months.
“Considering these target groups, some of these requirements may become a bottle neck for them to access the fund. The fixed asset such as property required for the collateral for N10 million to N100 million must be valued at two and half times of the above amount mentioned,’’ he said.
He said that incidentally, Section 91 of the Nigeria Mining Act (2007), clearly provides solutions to some of these BoI requirements under extension services free of charge for ASM.
Mayere said the government through the ministry shall provide extension services to duly registered and performing mining cooperatives of artisanal and small scale miners.
He said in as much as the bank planned to purchase equipment for individuals that want to buy from their loans, it should consider fairly used equipment to enable them have enough balance as working capital.
He urged the bank to select ASM state by state for the take-off of the intervention fund, as this would go a long way in providing the desired mining activities in the country.
Edward Danlandi, the First National Vice President, Miners Association of Nigeria, also a beneficiary of the scheme said none of the association members had been able to access the fund.
Danlandi said that the criteria attached to the loan was too stringent, adding that it would be difficult for any miner to provide all the requirements needed by the bank.
According to Danlandi, the association is making effort through several meetings to prevail on BoI to relax its conditions to enable miners to access the fund in order for them to commence full operations.
Abdulkadir Muazu, the Permanent Secretary of the ministry had in February said that the committee saddled with disbursement of the fund was at the verge of disbursing the loans, and that only the group of miners that met the criteria would be given.