Rich nations stockpiling critical minerals Nigeria has ignored
Rich countries are building strategic reserves of metals that will be critical as the world moves away from fossil fuels to a greener economy, but only one of four of such metals found in Nigeria is on the government’s priority list.
These countries including China, Japan, the United States, and some European countries,
are minerals that are important for the development of battery technologies will be winners tomorrow.
The International Energy Association (IEA), an energy think thank that advises governments of Western countries, is already urging them to begin a stockpile of these metals as supply is uncertain.
Some of the minerals that will dominate the future are those used in the production of battery, including nickel, aluminium, phosphorus, iron, copper, graphite, lithium, cobalt, manganese, among others.
Of these minerals, Nigeria has deposits of iron ore, copper, manganese, and graphite, but on the government’s priority list of minerals to develop, only iron ore features due to the industrialisation potential steel can offer Nigeria.
Nigeria also possesses bauxite (the main source of aluminium), cobalt (a 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 Nigeria’s Mining and
Minerals Investment brochure 2017 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 federation.
“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 noted.
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 has provided some incentives including a 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 kat sin a,k adun a,Niger,Kebbih old 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, jig aw a, an am bra, bauc hi, among others.
Already, countries like China and Japan have inventories of critical metals and this is boosting demand and prices of commodities like copper, nickel, and aluminium as governments vie with automakers for scarce metals.
Western countries do not hold stockpiles of these metals hence the IEA is urging them to start stocking up. While crude is relatively spread out across the globe, production and processing of minerals such as lithium, cobalt and some rare earth ele
ments are highly concentrated, with the top three producers accounting for more than 75 percent of global supply.
“Today, the data show a looming mismatch between the world’s strengthened climate ambitions and the availability of critical minerals that are essential to realising those ambitions,” said Fatih Birol, IEA executive director.
The agency says stockpiling programmes could 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 decarbonising world.