Lithium Ore (Spodumene) Mining and Export from Nigeria; A Comprehensive Feasibility Report

Lithium, an essential mineral for battery production, plays a pivotal role in the development of electric vehicles (EVs), renewable energy storage, and a range of consumer electronics. As the global shift towards sustainable energy and electric mobility accelerates, the demand for lithium is surging.

In fact, the global lithium market was valued at USD 38.2 billion in 2022 and is projected to grow to USD 230.4 billion by 2031, registering a compound annual growth rate (CAGR) of 22.1% from 2023 to 2031. With this rapid growth, emerging markets like Nigeria, with abundant yet largely untapped lithium resources, are becoming key players in the global lithium supply chain.

The global lithium market is experiencing exponential growth, primarily driven by the increasing demand for lithium-ion batteries used in electric vehicles, renewable energy storage, and electronics. As industries pivot towards electric mobility and green energy, lithium has become a critical raw material in enabling this transition.

The automotive sector, in particular, is a major driver of demand. Electric vehicle sales have soared globally, with major automakers transitioning towards electric fleets. Additionally, lithium is integral to the production of energy storage solutions for renewable sources like solar and wind. This expansion of electric mobility and green technologies is set to keep driving demand for lithium well into the coming decades.

Historically, the top producers of lithium have been countries like Australia, Chile, and China, which dominate the mining and refining sectors. However, with the rise in demand and the increasing exploration of lithium reserves across the globe, more countries, including Nigeria, are positioning themselves as key players in the lithium market.

Nigeria, traditionally known for its oil and gas resources, is emerging as a potential key source of lithium. The country has vast mineral deposits, including significant reserves of lithium-bearing minerals, and several regions are gaining attention as prime locations for lithium exploration and mining. States such as Kaduna, Nasarawa, and Kogi are identified as having promising lithium deposits.

Kaduna State: Home to various mineral deposits, including lithium, Kaduna is a key region for mining exploration. Recent surveys have confirmed the presence of lithium ore, attracting attention from both local and international mining companies.

Nasarawa State: Nasarawa has become one of Nigeria’s most notable states for lithium exploration, with significant deposits identified. The state’s mineral-rich landscape and strategic location make it an ideal area for large-scale lithium mining operations.

Kogi State: Known for its potential in various mineral resources, Kogi is also being explored for its lithium reserves. As exploration continues, Kogi’s contribution to Nigeria’s lithium mining efforts could be substantial.

While mining operations are still in their infancy, the presence of lithium ore in these states presents significant opportunities for the country to tap into the growing global lithium market. As exploration efforts intensify, Nigeria is poised to become a key player in the supply of lithium for battery production, EVs, and renewable energy storage.

In 2022, Nigeria exported lithium worth $82.2 million, with the majority of its shipments going to China ($81.2 million), followed by Indonesia and Turkey. This growing export market signals Nigeria’s rising role in the global lithium supply chain. Although the export figure remains modest in comparison to other leading producers, it highlights the increasing recognition of Nigeria’s lithium potential.

Several mining companies, both local and international, are already active in exploring and developing Nigeria’s lithium reserves. Chinese firms, in particular, have taken a keen interest in Nigeria’s lithium sector.

Notable ventures include Avatar New Energy Materials, which operates the largest lithium processing plant in Africa, located in Nasarawa State. This plant, with a daily production capacity of four thousand ( 4,000) tons, underscores the scale at which lithium mining and processing are set to grow in Nigeria.

Another Chinese company, Canmax Technology, has announced a $200 million investment in a lithium processing plant in Nasarawa State, which is expected to boost the country’s position as a key player in the global lithium market. These investments reflect a broader trend of international companies tapping into Nigeria’s mineral potential.

Ming Xin Mineral Separation, based in Kaduna, is also building a lithium processing plant that will focus on producing materials for electric vehicle batteries. This investment highlights the significant role that Nigeria could play in supplying raw materials to the rapidly growing electric vehicle industry, which is one of the largest drivers of global lithium demand.

Despite the nascent stage of the industry, Nigeria’s lithium export potential is set to increase as demand continues to rise globally. Nigeria’s strategic position as a key exporter of lithium is evident from the increasing export figures.

In addition to China, other emerging markets, particularly in Europe and North America, are likely to show heightened demand for lithium as they transition to electric vehicles and renewable energy solutions. Expanding Nigeria’s export base to these regions could further strengthen its position in the global lithium market.

Furthermore, as Nigeria’s mining infrastructure develops, particularly in states like Nasarawa, Kaduna, and Kogi, the country’s logistical capacity to transport and export lithium will improve, further facilitating international trade.

While Nigeria’s lithium mining industry holds significant promise, several challenges must be addressed for the sector to realize its full potential.

Infrastructure Deficiencies: One of the primary challenges faced by Nigeria’s mining industry is its inadequate infrastructure. The lack of reliable roads, electricity, and efficient transport networks complicates the extraction and export processes. Addressing these infrastructure gaps will be crucial for enhancing operational efficiency and supporting large-scale mining operations.

Regulatory and Legal Framework: The regulatory environment for mining in Nigeria is complex. Obtaining the necessary licenses from the Ministry of Mines and Steel Development and securing export permits from the Nigerian Export Promotion Council (NEPC) can be a cumbersome process. Simplifying and streamlining these procedures will be essential to attracting more investment and encouraging local and foreign mining operations.

Environmental Considerations: Mining activities, especially large-scale operations, can have significant environmental consequences, such as land degradation, water pollution, and habitat destruction. These issues can provoke opposition from local communities and environmental groups. To mitigate these risks, mining companies must adopt sustainable practices and conduct thorough environmental impact assessments.

Competition from Established Producers: Countries like Australia, Chile, and Argentina have long been dominant players in the global lithium market. Nigeria’s lithium industry will need to overcome challenges related to operational efficiency, technology, and scale to compete with these established producers. Investments in mining technologies, such as Direct Lithium Extraction (DLE), could help enhance Nigeria’s competitiveness.

Despite the challenges, there are several opportunities for growth in Nigeria’s lithium sector:

Government Support: The Nigerian government has recognized the value of the country’s mineral resources, and efforts are being made to attract foreign investments. Policy reforms, tax incentives, and infrastructure development could foster the growth of the lithium mining industry.

Rising Global Lithium Demand: The rapid rise in demand for lithium, driven by the global shift towards electric vehicles and renewable energy storage, presents a unique opportunity for Nigeria to become a significant supplier of lithium. By tapping into its untapped reserves, Nigeria can capitalize on this growing global demand.

Strategic Partnerships: International partnerships with companies from China, Europe, and North America can provide Nigeria with access to the capital, technology, and expertise needed to develop its lithium mining sector. These partnerships will help Nigeria develop more efficient mining and processing capabilities, enhancing its global competitiveness.

Expansion of Export Markets: As the demand for lithium continues to rise, Nigeria can diversify its export markets beyond China, Indonesia, and Turkey. Establishing trade relationships with other major markets, especially in Europe and North America, will open new avenues for growth in Nigeria’s lithium export sector.

Lithium ore mining and export from Nigeria holds significant promise for the country’s future. With vast untapped reserves, growing global demand, and international partnerships, Nigeria has the potential to become a leading player in the global lithium market. However, overcoming challenges related to infrastructure, regulatory frameworks, and environmental concerns will be critical to realizing the full potential of the sector.

As the global demand for lithium continues to soar, driven by the rapid growth of the electric vehicle market and the transition to renewable energy, Nigeria is well-positioned to capitalize on this trend.

By investing in infrastructure, fostering a business-friendly regulatory environment, and leveraging its strategic resources, Nigeria can unlock the full potential of its lithium ore industry and become a key supplier in the global lithium supply chain.

Table of Contents

1.0 Business Overview 1.1 Description of the Business 1.2 Vision and Mission Statement 1.3 Business Objective 1.4 Value Proposition 1.5 Obtaining a Mining Permit in Nigeria and Associated fees 1.6 Occurrence and Distribution of Lithium Ore Nigeria 1.7 Critical Success Factor of the Business 1.8 Current Status of Business 1.9 Description of the Business Industry 1.10 Contribution to Local and National Economy 2. Marketing Plan 2.1 Description of the Product 2.2 Product Packaging and Delivery 2.3 The Opportunity 2.4 Pricing Strategy 2.5 Target Market 2.6 Distribution and Delivery Strategy 2.7 Promotional Strategy 2.8 Competition 3. Technical Analysis 3.1 Description of the Location 3.2 Raw Materials 3.3 Mining Equipment 3.4 Mining and Export Process 3.4.1 Pre-Export Documentations in Nigeria 3.4.2 Post-Export Documentations (Exchange Control Documents) 3.5 Mining, Production and Direct Cost 3.6 Stock Control Process 3.7 Pre-Operating Activities and Expenses 3.7.1 Operating Activities and Expenses 3.8 Project Implementation Schedule 4.0 Organizational and Management Plan 4.1 Ownership of the Business 4.2 Profile of the Promoters 4.3 Management and Governance 4.3.2 Management Support Units 4.4 Details of Salary Schedule 5. Financial Plan 5.1 Financial Assumption 5.2 Start - Up Capital Estimation 5.3 Source of Capital 5.4 Profit and Loss Account 5.5 Cash Flow Analysis 5.6 Viability Analysis 6.0 Business Risks, Mitigation Factors and SWOT Analysis 6.1 Business Risks and Mitigation Factors 6.2 SWOT Analysis

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