Nigeria, AfDB seek end to raw mineral exports, as regulators tighten ESG expectations

Nigeria and the African Development Bank (AfDB) have intensified calls for local mineral processing and value addition as regulators tighten environmental, social, and governance (ESG) expectations for mining companies in a bid to reposition Africa’s mining sector for sustainable industrialisation.

The stakeholders made the call at the just-concluded fifth edition of the African Natural Resources and Energy Summit (AFNIS) in Abuja, where policymakers, regulators, and development finance institutions urged African countries to end the export of raw minerals, deepen regional value chains, and strengthen community participation in mining projects.

Speaking at the summit, Kevin Urama, vice president and chief economist of the African Development Bank (AfDB), urged African countries to abandon the long-standing model of exporting unprocessed minerals and instead build regional mineral value chains capable of driving industrialisation, job creation, and technological development.

According to him, infrastructure investments across the continent should be redesigned to support manufacturing and intra-African trade rather than facilitate the extraction and shipment of raw commodities.

“We need to link up corridors that connect markets within Africa instead of building infrastructure mainly for extraction,” Urama said.

He noted that many of Africa’s transport corridors still reflected colonial-era economic structures designed primarily for resource extraction instead of supporting industrial development.

Urama also advocated stronger local content policies and called for a shift from conventional mining concession agreements to mineral development agreements that require investors to process critical minerals within Africa.

According to AfDB studies, local processing of strategic minerals such as lithium could significantly reduce production costs while creating employment opportunities, encouraging technology transfer and lowering carbon emissions associated with overseas processing.

He added that Africa, which possesses roughly 60 per cent of the world’s technical solar energy potential alongside vast deposits of critical minerals, could transform its industrial landscape through greater regional collaboration and integrated energy infrastructure.

“Countries cannot achieve this alone. We need one Africa, one resource, working together,” he said.

The renewed emphasis on local beneficiation comes as Nigeria simultaneously tightens expectations around ESG compliance, with regulators insisting that mining companies can no longer rely solely on legal licences to operate.

Obadiah Nkom, director-general of the Mining Cadastre Office (MCO), said mining firms must obtain what he described as a “social licence to operate” by earning the trust and support of host communities.

Speaking during a masterclass at the summit, Nkom argued that sustainable mining now depends as much on community acceptance as regulatory approvals.

“Corporate trust and community programmes are critical. We cannot talk about sustainable mining when a company obtains a mineral title but lacks community trust. There is a need for a social licence to operate,” he said.

According to him, mining companies must move beyond resource extraction to creating shared value through transparency, accountability and inclusive development.

He said the global mining industry was increasingly shifting towards ESG-centred practices where environmental stewardship, stakeholder participation and community development had become fundamental requirements rather than optional corporate initiatives.

Nkom noted that Community Development Agreements should evolve beyond statutory obligations into practical mechanisms for improving local livelihoods and preventing conflicts that often disrupt mining operations.

“Communities today are more informed and organised. They can interrupt projects if they feel excluded or their interests are not protected,” he warned.

He added that while Nigeria’s Minerals and Mining Act 2007 already provides a legal framework for sustainable mining through royalty payments, environmental protection and benefit-sharing provisions, operators must demonstrate genuine commitment to host communities if projects are to remain commercially viable.

“Our goal is to ensure mining projects are not disrupted because communities feel neglected. When communities are carried along and benefit from mining, everyone wins, including investors, government and the people,” he said.

The summit also produced concrete investment outcomes aligned with the continent’s value-addition agenda.

The Africans for Africa (AFA) Initiative signed a Memorandum of Understanding with Steron International Resources Limited to accelerate the development of lithium and rare earth projects in Nigeria under internationally recognised ESG standards.

The agreement positions Steron’s lithium and rare earth project in Wasa as a potential pipeline project for the AFA Mining Fund, providing access to capital and technical support aimed at improving project bankability and sustainable mining practices.

Suleiman Zakari, co-founder of the initiative, said the partnership represented a transition from policy advocacy to implementation.

“today, with the AFA Mining Fund institutionalised and nearing its first close, this partnership with Steron demonstrates that our strategy is moving from vision to tangible, high-impact reality,” he said.

Abubakar Sadiq, managing director of Steron International Resources Limited, said the collaboration would help position Nigerian mining projects to meet global ESG standards while delivering economic benefits to host communities.

In another development, Nigeria’s Minister of Solid Minerals Development, Dele Alake, was formally invested as chairman of the African Minerals Strategy Group (AMSG), a continental platform established in 2024 to deepen cooperation among African mineral-producing countries and improve the continent’s returns from its natural resources.

Meanwhile, Nasarawa State Governor Abdullahi Sule said the state had adopted a tripartite mining framework designed to balance the interests of investors, government and host communities.

According to him, the framework combines regulatory oversight, environmental compliance, revenue transparency and infrastructure support to encourage responsible mining while strengthening investor confidence.

Sule disclosed that the state had committed five per cent of its internally generated revenue to an infrastructure fund used to provide access roads, electricity, security and other facilities required for mining and agricultural investments.

He said Africa’s long-term economic transformation would depend on stronger partnerships among governments, investors, development institutions and local communities, enabling the continent to move beyond exporting raw materials toward local processing and industrial development.

The summit, themed “One Africa, One Resource Vision,” concluded with renewed calls for African countries to leverage critical minerals not merely as export commodities but as catalysts for industrialisation, regional integration and sustainable economic growth.