Banks cautious over investing in solid minerals —NGSA

solid-minerals01 July 2014, Abuja – Following poor interests expressed by investors to invest in the solid minerals sector, banks in Nigeria have been cautious over funding investments in the sector.

This was revealed by the Director-General, Nigeria Geological Survey Agency, NGSA, Mr. Alex Nwegbu, while speaking with Sweetcrude on the slow pace of investment and development in the solid minerals sector.

Nwegbu said: “It is not that banks don’t want to fund the sector because we have had interactions with the banks, and they have said specifically that one, the money in their custody is people’s money. Before they can commit people’s money into investment, they would be absolutely sure about the investment.

“One of the major challenges in the sector is that investors don’t have enough geo-sciences information to make investment decisions. The banks are saying, ‘if we don’t have enough geo-sciences information, how can we invest other people’s money? So we are not comfortable and not sure how we can make returns on investment.’

“I am not comfortable with the emphasis laid on the solid minerals sector. I think the basic problem is lack of understanding of the sector by both the policymakers and executors. People easily get discouraged when they invest huge amounts of money on a particular solid mineral and nothing comes out of it, and they decide not to continue.

“Somebody might invest $50 million and finds nothing, and even though he does not get up to a commercial quantity or quality he wants. So people need education about investment in the solid minerals sector, unlike the investment made in real estate, where in a short-while you see structures springing up.”

Nwegbu who was recently appointed the NGSA’s DG, said the huge potential in the sector has largely remained untapped as a result of poor orientation about the sector, which had made it unattractive over the years.

“People are well informed about the oil industry, which is mainly run by expatriates, who understand the sector even though they find nothing after investing millions of dollars. So, people need enlightenment on the peculiar nature of the solid minerals sector,” he stated.

According to the NGSA boss, government still has a lot to do, even though it was working to provide the enabling environment for private practitioners to come into the business.

“This is where the government in Nigeria should come in at the level of geosciences information and it will do us a lot of good,” he stated.

However, Nwegbu expressed optimism that the sector is capable of attracting direct foreign invest, particularly after the recently held World Economic Forum in Abuja, which further revealed huge investment opportunities in the nation’s solid minerals sector.

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