Nigeria is endowed with untapped solid minerals reserves. In 2007, the Nigerian government created the Solid Minerals Development Fund (SMDF) to develop a competitive mining industry. The fund is potentially tasked with attracting foreign direct investment (FDI) into the Nigerian mining sector. While a considerable share of investment in Nigeria has, since the early 2000s, originated from China, the previous 2019 Capstone team tangentially discovered that Nigeria’s mining sector has not seen meaningful investments from Chinese investors. Moreover, the obstacles to institutional Chinese investment in Nigeria’s solid minerals sector have not received academic scrutiny. To that end, the 2020 Capstone team conducted interviews remotely and marshaled primary as well as secondary sources to yield a comprehensive set of findings regarding the limitations Chinese individuals and businesses face when navigating Nigeria’s mining sector, which include the low awareness of SMDF, unnecessarily complex regulatory environment, stringent ownership requirements, inadequate or missing technical and physical infrastructure, and the absence of clear and enforceable ESG rules and regulations. The team’s overall recommendations include:

  • Raise awareness of the SMDF and its functions.
  • Provide a proof-of concept that investing in Nigeria’s mining industry represents a profitable and sustainable venture.
  • Publish and explain Nigeria’s ESG guidelines that industry participants can readily access and thus adhere to.
  • Revise Nigeria’s local ownership requirements.
  • Put forward initial funding for investors to cover up-front costs, such as gathering geoscientific data and other expenses in mining project’s exploration phase.