Africa Finance Corporation, the continent’s leading instrumental infrastructure solutions provider, has announced several strategic partnerships on the sidelines of the recently concluded 2024 Mining Indaba conference in Cape Town to boost Africa’s mining sector, ushering the continent into a new era of growth and prosperity.
Since 2014, AFC has invested over $1 billion in Africa’s mining of precious metals and critical minerals across several countries, and the latest partnerships will further strengthen the sector by driving significant capital flow into the continent.
Nigerian mining firm, Thor Explorations Limited, is one of the beneficiaries of AFC’s investments on the Continent.
AFC is the largest investor in Thor Explorations, investing $86 million towards the Segilola Gold Mine, Nigeria’s first commercial-scale gold mine.
Last year, Thor Explorations Ltd, through its fully owned subsidiary Newstar Minerals Ltd, obtained rights to explore over 600 square kilometres in Nigeria’s West Oyo, Kwara, and Ekiti lithium project areas, highlighting the West Oyo site as home to the nation’s most substantial lithium pegmatite occurrences.
AFC has signed an EOI with Thor Exploration for the development of this project, marking the Corporation’s commitment to supporting the establishment of Nigeria’s first large-scale lithium mine. This initiative plays a pivotal role in advancing global energy transition objectives, solidifying Nigeria’s position as a key enabler of renewable energy.
In October 2023, AFC and Solid Mineral Development Fund commissioned Wood Mackenzie to conduct a comprehensive study to assess the feasibility of establishing a midstream processing plant in Nigeria.
Wood Mackenzie’s study focused on the viability of processing a number of critical minerals including lithium, cobalt, and manganese.
The insight and outcome of the study revealed at the Mining Indaba in Cape Town showed that establishing a processing plant in Nigeria will significantly bolster the country’s FX generation capacity through significant annual trade volumes and create thousands of local jobs.
“Since 2014, AFC has invested over $1 billion in Africa’s mining of precious metals and critical minerals across several countries.”
Speaking at the signing, AFC’s Chief Investment Officer, Sameh Shenouda said, “While over 30% of the world’s minerals are in Africa, less than 5% of global development funding is invested in African mining projects. Recognizing the significant funding gap in the African mining sector, AFC is committed to pragmatic solutions and supporting the sector’s growth, having invested about $1 billion across metals and critical minerals in several African countries. Through these strong partnerships with like-minded stakeholders, our goal is to open up new markets, promote a greener economy, and contribute to the overall development of African countries.”
Besides Nigeria, AFC signed an expression of interest (EOI) with Gécamines, the largest mining company in the Democratic Republic of Congo, to develop certain assets in the mining sector in DRC, including critical minerals.
The collaboration will also focus on several initiatives for near-term co-financing of mining and infrastructure-related projects for execution by the end of Q2 2024.
Also, AFC announced the successful closure of a $55 million mezzanine debt facility for FG Gold Limited, facilitating the commencement of construction for the Baomahun Gold Project in Sierra Leone.
The project represents a significant milestone as it is poised to become Sierra Leone’s inaugural large-scale commercial gold mine. Upon completion, it is projected to contribute approximately 10 percent to Sierra Leone’s GDP and generate 900 direct and indirect job opportunities within the country.
This financing builds upon AFC’s previous investment of $45 million in 2022, which played a pivotal role in the extensive development of the project, culminating in the completion of its definitive feasibility study.
AFC announced the launch of the syndication process and executed the senior debt term sheet for Nyanza’s 80,000 tonnes per annum (TPA) TiO2 pigment plant in Richards Bay Industrial Development Zone. Valued at $780 million, this sulphate-based TiO2 pigment plant will stand as the first and only one of its kind in Africa. The launching of the syndication process follows the successful completion of the project development stage, which AFC co-financed with a $3 million Project Development Facility.
The plant is strategically positioned to add value to the region’s abundant titanium ore, historically exported without any value addition.
AFC serves as a co-developer and co-mandated Lead Arranger (MLA) alongside Afreximbank, underlining the Corporation’s commitment to advance transformative projects in the region.
