At 61, with oil uncertain, minerals of the future offer Nigeria hope
The minerals of the future will be used to produce car batteries and other clean energy technologies including Nickel, Aluminum, Phosphorus, Iron, Copper, Graphite, Lithium, Cobalt, and Manganese and are present in Nigeria offering respite as climate concerns erodes oil’s future.
Nigeria has vast deposits of some of these minerals such as Iron ore, Copper, Manganese, and Graphite but they are not on the government’s priority lists of minerals to develop. Only Iron ore features due to the industrialization potential steel can offer the country.
After 60 years of oil exploration, experts say it has become for Nigeria to evaluate the consequences of overreliance on crude oil which has crippled other sectors of the economy.
“Nigeria is left with very little option but to diversify its economy by focusing on other mineral resources which can only be achieved through the revival of the mining industry,” said Ola Alokolaro, partner energy, and infrastructure at Advocaat Law Practice.
Nigeria also possesses bauxite (the main source of aluminum), cobalt (by-product of nickel and copper ores), and manganese, though there has not been extensive research to determine the economic viability of these resources, said Habeeb Jaiyeola, associate director at PwC Nigeria.
In 2017 Nigeria’s mining and minerals investment brochure developed when Kayode Fayemi, now governor of Ekiti State was the minister of mines and steel development, which is also being implemented by the current minister, the Federal Government committed to developing seven out of the dozens of minerals found in virtually all the states in the country.
“As part of the strategies to reform the sector, the ministry has identified seven strategic minerals, namely, Coal, Bitumen, Limestone, Iron Ore, Barites, Gold and Lead/ Zinc for priority development,” the document said.
Olamilekan Adegbite, minister of mines and steel development is initiating reforms to encourage local development of mineral resources the country has in abundance but is either ignored or mostly exploited by artisanal miners.
To encourage private sector participation, the ministry h m©as provided some incentives including waiver on Customs and import duties for the plant, machinery, and equipment imported for mining operations and tax holidays of between three to five years for businesses as applicable.
Other incentives include free transferability of funds and permission to retain and use earned foreign exchange, capital allowances of up to 95 percent of qualifying capital expenditure, deductibility of Environmental Costs (money meant for environmental remediation now tax-free) and 100 percent ownership of mineral properties.
But without applying these incentives to minerals that will be in high demand in the future, the country could miss out on the next big thing after the burning of fossil fuels.
“The strategic nature of the identified seven strategic minerals needs to be reassessed in light of current realities,” said Jaiyeola.
Jaiyeola said the road map, which is expected to be in force till 2025, may require a holistic review around its content, especially when considering future trends.
“This will prevent the country from investing in a resource, and at the point of harnessing the investment, the value of the resource becomes low due to diminished global relevance,” Jaiyeola said.
Nigerian states of Katsina, Kaduna, Niger, Kebbi hold deposits of manganese. Graphite exists in Kaduna, Bauchi, Gombe and Adamawa. Bauxite is found in Benue, Delta and Ekiti. Iron ore is found in many states including Enugu, Jigawa, Anambra, Bauchi among others.
Wealthy countries like China, Japan and the United States without these resources have been stockpiling these critical minerals that are not renewable and found in troubled countries like Congo.
The International Energy Association, (IEA) and energy think tank that advises governments of Western countries has counseled them to begin a stockpile of these metals as supply is uncertain.
The agency says this will provide a valuable buffer as leading industrial nations look to develop reliable supplies of metals and minerals that will play a critical role in a decarbonizing world.
Supplies of critical minerals essential for key clean energy technologies like electric vehicles and wind turbines need to pick up sharply over the coming decades to meet the world’s climate goals, creating potential energy security hazards that governments must act now to address, the IEA said in a new report.