Despite accounting for a huge portion of global Lithium deposits, Nigerian investors may have been sidelined in the mining and processing of Lithium in Nigeria.

Lithium (Li) is a mineral resource considered fundamental in the renewable energy, electric vehicles (EVs) and energy storage industries.

As the world’s economy sustains rapid diversion to renewable energy and away from fossil fuel (crude oil based energy), Nigeria’s Li resources is now being classified as strategic mineral for driving modern and globally-focused economic development.

Annual global revenue of the industry is estimated at $92 billion.

Though listed production volume is still minimal, Nigeria’s Li deposit is estimated to be worth over $34 billion out of the global estimate of $500 billion proven reserves.

The deposits are located in several states, including Nasarawa, Kaduna, Niger, Kwara, Kogi, and Ekiti.

Sources close to the Solid Minerals Ministry told Financial Vanguard that China-led foreign interests have taken the lead position in the exploitation and trade in the strategic assets across North Central region of the country that holds over 70 per cent of the proven reserves.

Currently, no Nigerian investor is known to be a significant player in the sector except artisanal miners.

The Chinese investors that have taken the lead in plunging deep into the lithium business in the country includes Avatar, the first Chinese company, that has an installed capacity of 4, 000 metric tons per day facility.

Similarly, Ganfeng, the second Chinese firm, is now waiting for commissioning of its 6,000 MT facility.

Financial Vanguard learnt that the bulk of the extracted Li are shipped to EV battery manufacturers in Shenzhen and Guangdong in China, Tamil Nadu in India, Seoul in South Korea, Osaka in Japan, and other industrial centers in South East Asia.

Industry experts say the Nigerian economy could only benefit from the booming lithium business if local investors move into the sector and if the government implemented the Solid Minerals Value-chain regulations.

The regulations were put together to ensure the nation received full benefits of the solid minerals through value-addition, rather than the export of raw minerals from the mines.

Why domestic investors are not yet there —Muda Yusuf

Reacting to the development, the Executive Director, Centre for the Promotion of Private Enterprises, CPPE, Dr. Muda Yusuf, spoke extensively on how Nigeria’s lithium industry could be turned into a major foreign exchange earner for the economy.

He stated: “It’s all about investment, and it’s about the strategies we can put in place to attract investment into this lithium industry, and I think we need to create awareness because this is not a sector that Nigerians actually are aware of.

“We don’t have domestic investors in that space because we don’t have much capacity in terms of those who understand the industry and who are willing to take the risk to invest.

“We have to start from the primary production first because we have not really expanded the industry to the point where it would be easy to say that people should come in, and of course, that would be the ultimate.

“Let us expand lithium first at the primary level. If it goes to a level that is now very substantial, we can move through policies and all of that to say we are no longer exporting primary products. We now want to be processing but from the word go, we cannot start with saying that if you mine, you have to process that will constrain investment. This also requires a lot of government support because the risk in mining is also high.

“Some investment has to be up front, possibly even by government itself, in terms of the necessary geological information, you can’t expect an investor to come and be the one doing all the research.

If you already have something prepared, in terms of bankable geodata, it will guide investments, and they also reduce risks of investment. This is very critical.

“But then the country has the naughty issue about insecurity because doing a mapping of problem of insecurity and solid minerals it seems to be some strange coincidence when it comes to some of these precious minerals because in many places where you have these minerals there is also the problem of insecurity.

“So it seems as if there are some criminal elements who are also taking advantage of our minerals illegally, and those people create security challenges in the mineral producing areas. That needs to be addressed, in order to be able to elevate the confidence of investors in this sector”.

Yusuf also emphasized that Nigeria’s lithium potential is high and attractive to Foreign Direct Investments, FDIs, but there are more challenges in realizing the potentials.

He explained: “The world is moving to batteries now, and that’s a major transition. People are moving away from fossil fuels, even global financing – It’s easier to get global finance to support things like lithium than to support even fuel or oil exploration because of the shift and energy transition that is another decarbonization issue that is going all over the world.

“It’s an expanding and big market because most things are going electric – automobiles are going electric. There are countries now that within five years they will phase out all these combustion engine vehicles. Everything will go electric”.

Lithium business environment should be easy, attractive —Miners

Also speaking on the issue, the National President, Miners Association of Nigeria, MAN, ’Dele Ayanleke, said the emergence of Lithium in Nigeria’s economic environment was a welcomed development, but noted that the business environment should be made easy and attractive to local investors.

According to him, the dichotomy between the national and subnational governments is a big problem, as only the federal government issues licences at the expense of state and local governments.

He therefore stated: “We have to provide the enabling environment in terms of our regulatory frameworks to be sure that we streamline everything and it takes care of the concerns of all the stakeholders.

“Also, we should encourage state governments to partner with these foreign investors in lithium processing so that they will be able to monitor and ensure that the minerals coming out from their locality actually cascade into socio-economic development of their communities.”

On local investors’ participation, he said: “Government needs to involve local investors in lithium exploration by granting incentives. Government should provide an enabling environment and ensure that local capacity of the indigenous operators are well enhanced.

“We are the ones to provide the bedrock for these foreign partners coming into the country. They shouldn’t be allowed to come and own mining 100 per cent. What we cannot get in other climes, we should not offer it.

“You can’t go to China to own 100 per cent of their solid minerals as a foreign investor, they will not even give you access to go to their mining sites, no matter what kind of partnership you have with them.

“I pray we will not go back to what countries such as Congo are experiencing now in terms of foreign domination of their mining industry.

“The government should make sure we encourage our local investors to compete very well with any foreign investors that want to come into the sector.

“Give them incentives, and possibly de-risk some of the risk associated with the sector. Our financial institutions should try as much as possible to acquire knowledge about this industry because lack of knowledge is making them to run away from investing in the mining industry.

“They should copy what is being done in other climes, where the financial institutions are actually investing and supporting mining businesses to grow.”

In an interview, Samuel Agya, the Special Adviser to Governor Abdullahi Sule of Nasarawa State on Mining and Solid Mineral Development, explained what was going on in his state on Lithium mining.

He stated: “Nasarawa State currently hosts the country’s largest lithium processing plant.

‘’Lithium mining was in obscurity in Nasarawa till the advent of Governor Abdullahi Sule, with his years of experience in the sector, embarked on a wide tour to woo the world’s largest investors in lithium processing, considering the huge deposits of the mineral and the world’s demand for green energy.

“The first large lithium firm to carry out processing of the mineral to a finished product is Avatar, Chinese Lithium processing firm. The plant was recently commissioned by the Senate President, Senator Godswill Akpabio, in Nasarawa Local Government and currently mining and processing Lithium into a finished product.

“The second is Ganfeng, also a Chinese company, and one of the largest lithium factories in West Africa is 90 per cent completed.

“Ganfeng Lithium processing company is a Chinese investment worth $200 million lithium factory, which is almost set for commissioning in the state to process Lithium battery.

“The state government has continued to appeal to the federal government to deregulate the solid mineral sector to give the states the authority to regulate and sanitize the sector against illegalities that fuel insecurity.”

No special policy on Lithium — FG

However, a director in the Ministry of Solid Minerals Development who spoke with Vanguard on grounds of anonymity, said the federal government had no special policy on lithium, especially in terms of investments

He said: “There is no specific policy on any mineral, including lithium. Lithium is like any other mineral, so there is no government policy on it, so we just put all the minerals together.” (Vanguard)