Nigerian Mining Minister Dele Alake announced on Monday that his government will commission two large lithium processing plants from Chinese firms this year, one of them valued at $600 million and the other at $200 million.
Alake said two more processing plants could also come online in the third quarter of this year in Nasarawa, a state next to the Nigerian capital of Abuja. Roughly 80 percent of the funding for all four plants will be provided by Chinese firms, while the remaining 20 percent of the projects will be owned by a Nigerian company called Three Crown Mines.
“We are now focused on turning our mineral wealth into domestic economic value — jobs, technology, and manufacturing,” the mining minister said.
Nigeria’s lithium “gold rush” began in 2022, when a national geological survey discovered large deposits of high-grade lithium in several different locations. Some of Nigeria’s lithium deposits are of much higher purity than the minimal level considered desirable for exploitation. Nigeria also has a high percentage of “hard rock” lithium, which is easier to mine and process than brine or clay deposits.
In another stroke of good fortune, significant deposits of lithium and other valuable minerals were discovered close to the capital of Abuja, making them easier to access than deposits in more remote quarters of the country — especially since those remote areas tend to be overrun with violent bandits and Islamist insurgents.
Electric vehicle (EV) construction and green energy projects have created tremendous demand for lithium. China quickly moved in, offering funding and technical expertise to help Nigeria develop its resources. The Chinese were so eager to get their hands on Nigeria’s mineral wealth that they allegedly paid hefty bribes to bandits and terrorists to secure access to land under their control.
The Nigerian government has long struggled with illegal “artisanal” miners — which mostly means people with hammers and buckets chiseling minerals out of holes in the ground — so it was eager to begin building major mining and processing facilities, consolidating the grip of the government and favored corporations over minerals that were suddenly more valuable than oil.
Another element of Nigeria’s strategy to capitalize on its mineral wealth is to “formalize” tens of thousands of artisanal miners, essentially herding them into tiny companies or “clusters” that can be licensed and monitored. In return, the artisanal miners will receive technical and logistical assistance from the government, making the often horrific business of low-tech mining safer and more productive.
The Nigerian government often rails against independent miners as thieves and vows to crack down on them, but it also recognizes that artisanal mining has created jobs and income streams for some of its most impoverished citizens — and in the current haste to cash in on the lithium gold rush, while global demand far outstrips supply, it makes sense to recruit thousands of people who know exactly where the mineral deposits are.
Nigeria wants to process its own lithium, as well as digging it out of the ground, which is where the massive Chinese-funded processing facilities announced on Monday will come in. Back in 2022, Nigeria rejected an offer by Elon Musk’s Tesla EV company to purchase large quantities of raw lithium because it wanted to establish its own refining industry.
Nigeria made it illegal to sell unprocessed minerals to foreign buyers in 2022, ostensibly to end the “plundering” of its resources by foreign powers in order to “bring industry to Africa so that our people can be employed.”
Despite this commitment to nurture African industry, Nigerian officials kept quiet in February when two gigantic Chinese companies took control of a Nigerian firm that was building a lithium processing plant in the state of Nasarawa.
The company in question was founded by a Chinese businessman in 2022 who confusingly christened his new enterprise “Ganfeng Lithium Industry Ltd.,” a name very similar to an existing Chinese firm. The Nigerian government apparently had little faith in the ersatz Ganfeng’s ability to build the $250 million plant, so it seemed happy to let two big Chinese corporations purchase 75 percent interest in the Nigerian company and take over.
