Africa’s largest economy could tap into the global lithium market valued at over $37 billion as Thor Explorations Ltd has said initial drilling results from its search for lithium have returned “significant” intersections of mineralised pegmatites.
“We are extremely encouraged by the first set of results from our initial drilling campaign, which was designed to confirm the development of lithium-bearing minerals within pegmatite bodies that occur within our permit areas,” Segun Lawson, president and CEO, said.
“An initial drilling programme was being undertaken on one of the company’s prospects located in the West Oyo Project Area to confirm and delineate lithium-bearing mineralisation, such as spodumene and lepidolite, at depth.
“This is the first area of our portfolio we have drilled and we are looking forward to both continuing the drill program on this prospect and extending the drilling over the other lithium-bearing pegmatites within our portfolio in Oyo State,” said Lawson.
The company is a Canadian mineral exploration company engaged in the acquisition, exploration and development of mineral properties located in Nigeria, Senegal and Burkina Faso. It holds a 100 percent interest in the Segilola Gold Project located in Osun State.
It has secured over 600 square kilometres (km2) of granted tenure in Nigeria that form Oyo State, Kwara State and Ekiti State Lithium Project Areas. The Oyo State Project Area encompasses what Thor considers to be Nigeria’s most significant lithium pegmatite occurrence, which is currently being exploited by small-scale artisanal mining of lithium-bearing minerals.
The Oyo State Lithium Project comprises approximately 38km2 of exploration tenure that is located towards the westernmost border of Nigeria and within 200 kilometres of the commercial capital of Lagos.
The company has interests in gold mining operations in Nigeria.
According to research, the global lithium market was valued at USD 37.8 billion in 2022 and is expected to reach USD 89.9 billion by 2030 with a CAGR of 22.1 percent during the forecast period.
This growth is forecast to be driven by an increasing number of advancements in rechargeable batteries for electric vehicles, laptops, mobile phones, electric vehicles, and digital cameras.
“The surge in battery demand is due to the development of environmentally sustainable solutions and is set to drive market growth,” said analysts at BusinessFortune Insights, a global market research firm.
Based on end-user, the market is segmented into automotive, consumer electronics, industrial, energy storage, and others. The automobile industry is dominating as lithium-ion battery technology is being used as an alternative source of energy.
Demand for lithium-based power will rise rapidly with the growth of the electric-vehicle (EV) market. Forecasts by Tesla suggest the company will need approximately 1,000 kilotons of lithium carbonate equivalent per year by 2030, or 16 times its 2022 needs and 30 percent more than the world currently produces.
Overall, the global passenger EV market, which relies on lithium-based batteries, is expected to grow annually by 26 percent through 2030 and this will create an opportunity for countries like Nigeria with lithium deposits.
Forecast lithium market deficit is expected to grow out to 2040, driven by significant demand and tight supply.
“With the forecasted lithium market deficit expected to grow out by 2040, with an untapped lithium potential in West Africa, we believe it is a great opportunity to help diversify our existing gold production. In addition, we have continued to add further permits containing lithium-bearing pegmatites to our portfolio. And [we] look forward to updating the market with drill results and the progress of our exploration over the coming weeks and through to the end of the year,” said Lawson.
According to the study by Thor, Nigeria has favourable geological settings without advanced modern systematic exploration. Only small-scale spodumene and lepidolite mining are taking place but there are prospects for larger-scale mining in Kaduna after a Chinese firm secured drilling rights.
Nigeria also holds one of the largest economies in Africa and is capable of value-adding industries associated with the lithium supply chain. The government’s ambition is that battery minerals production will significantly reduce the current dependence on petroleum production.
“Experts say illegal mining, poor government policies, and insecurity all the sector; hence the government must formalise the sector.
“I recommend the need to have some sort of support or some formalisation programme, to promote legal and responsible mining practices. We need to create opportunities that allow illegal miners to operate legally; this development can also ensure that mining is done in a sustainable and responsible manner,” Osam Iyahen, senior director, natural resources at Africa Finance Corporation, told BusinessDay in an interview.
“Seizing the opportunity in the sector, other countries are reforming their rules to attract huge investments. Chile, for example, recently clarified mining rules with a new public-private partnership model, leading to more than 50 companies from around the world jostling to negotiate lithium deals in a country that represents 30 percent of global lithium production.