By Peter Yusuf
Many Nigerians may not know, but there is a silent revolution going on in the country’s energy sector. The federal government led by President Bola Tinubu stopped the payment of fuel subsidy, a scenario which brought the Compressed Natural Gas (CNG) into the consciousness of the average Nigerian as an alternative to fueling vehicles. But beyond CNG, there is a new energy source the country is about to start harnessing. Welcome lithium.
For those that may not know the importance of lithium, it is the mineral behind modern battery technology. It is the component deployed in making rechargeable batteries for mobile phones, laptops, digital cameras and electric vehicles. The metal also powers batteries for things like heart pacemakers, toys, clocks and a suite of modern gadgets.
The importance of lithium cannot be overstated, hence, the news that two firms – UK-based Jupiter Lithium Ltd and US-based ReElement Technologies Corporation – began to prospect for and process Lithium in Kaduna. The project which is named Jupiter Critical Minerals Project would empower the two companies to extract lithium in a 442 square kilometres in the state. Currently priced at $37, 000 (per ton) and with an estimated output of 167, 000 tons in the first two years, Nigeria stands to gain at least $6.2 billion in the first two years.
“The project is expected to contribute significantly to Nigeria’s economic diversification, foreign exchange generation, and local non-oil export sector,” said the Chairman of Jupiter Lithium Ltd, Mr. Stephen Davis. According to him, the Jupiter Critical Minerals Project is set to become Nigeria’s first large-scale lithium mine.
“The partnership aims to transform Nigeria into a regional hub for lithium mining and downstream battery and electric vehicle (EV) manufacturing; Jupiter Lithium plans to expand its operations, currently at contract mining, to include a spodumene concentrator facility that will produce 55,000 tons of 6% lithium spodumene concentrate annually by the first quarter of 2025,” said a joint statement issued by the two companies.
“Production is expected to ramp up to 167,000 tons within two years and ReElement Technologies will build a lithium and critical mineral refinery to convert spodumene concentrate into high-purity, battery-grade lithium carbonate. Mark Jensen, the CEO of ReElement has outlined the environmental and cost benefits of their technology and emphasised the project’s potential to advance local industrialization and job creation.”
With the world embracing a transition from fossil fuels, this deal is a game-changer towards the country’s drive to clean energy. And it is great that both the federal government and the Kaduna State government are totally supporting this project. It is also praiseworthy there is a value-adding in the production chain unlike what obtains with petroleum, the country’s economic mainstay. Thankfully, this stems from the inclusion of value-adding as a policy clause of the Tinubu administration. Speaking at a previous event, the minister of solid minerals, Dele Alake, had said: “Our new policy places emphasis on local value addition rather than export of raw minerals so that the value of our mineral products can increase.”
It should be noted that in the companies’ statement, they said that the Jupiter Critical Minerals Project which would be developed in phases will “also enhance local infrastructure, providing access to potable water, electrification, and education scholarships in host communities.”
What a win for Nigerians and especially for the average Kaduna indigenes. Her citizens are going to gain knowledge transfer and skills acquisition in the lithium ecosystem. These are unquantifiable gains which can be likened to how the Niger Deltans have benefitted from the oil industry. But unlike in the oil industry, lithium mining would not come with environmental degradation and its corresponding problems.
Perhaps the most important outcome is that this action would spur more foreign investment in the country’s solid minerals sector. In December 2023, it was reported that the Rural Electrification Agency (REA) and Nigeria and the National Agency for Science and Engineering Infrastructure (NASENI) sealed a $150 million lithium battery manufacturing deal with a Chinese investor, SHENZEN LEMI Technology Development Company during the COP 28 in Dubai. Also, speaking in London at another meeting hosted by British Deputy Prime Minister Oliver Dowden with Alake in November 2023, founder and partner of Carousel Bio-Energy, promoters of the project, Jafar Hilali, had promised to assemble a consortium of British companies in power supply, infrastructure and lithium battery production with a projection to produce lithium battery-powered energy buses for Nigeria’s domestic market. As the two companies begin operation in Kaduna, more deals are likely to follow.
However, as solid minerals are being posited as the new ‘crude oil’, the government has doubled up to secure that sector to arrest the alarming rate of illegal mining in the sector. In March, the Ministry of Solid Development Minerals has recruited 2,220 Mining Marshals, whose mandate is to repel illegal miners and arrest all who flout the country’s mining laws.
“Insecurity has bedevilled the mineral sector of this economy and it has combined with other variables to short-change revenue generation,” said Alake during the inauguration of the Mining Marshalls Corps in March 2024.
“So amongst others, the issue of combating insecurity in this sector is very crucial if we are going to record any success. Without the security of the operating environment in the mineral sector, you can’t even talk of increasing the revenue yield. We hope and believe that the minerals will become the revenue saver of the Nigerian economy and we are pursuing the goal of making the mineral sector contribute more than 50 per cent to the gross domestic product and that is our long-term objective.”
With the intervention of the special squad put in place by the ministry of mines and the seriousness the Kaduna State governor is ensuring the state is more secure by partnering with security operatives, I think there is little to fear as Nigeria opens a new chapter in her economic life by exploring lithium.
Globally, fossil fuels are losing their appeal as renewable energy is what is in vogue. While electric vehicles are yet to be a norm in the country, in a few decades, more vehicles around the world will be powered by electricity. According to Bloomberg NEF’s annual Long-Term Electric Vehicle Outlook, ‘there could be as many as 700 million Electric Vehicles on roads globally by 2040.’ And these vehicles, designed to be powered by batteries, would need a lithium input. It is quite visionary that the federal government has catalysed the Jupiter Critical Minerals Project from which it can earn foreign exchange and also create jobs.
While Nigeria’s gains on this lithium adventure are clearly defined, Kaduna also stands to enjoy ancillary gain as more investors troop into the state. For the state, whose governor, Senator Uba Sani, has taken upon himself the role of Chief Salesman, this is another major win towards regaining its pride of place as the cosmopolitan northern Nigeria city of commerce.