Why Nigeria rejected Telsa’s bid to mine raw lithium

Why Nigeria rejected Telsa’s bid to mine raw lithium

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By Grace Obike, Abuja On Aug 22, 2022
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The Federal Government rejected Tesla’s offer to purchase raw lithium from the country because it is no longer interested in allowing foreign companies to mine the nation’s mineral resources, ship them out without the addition of local value.

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The government also believes that instead of exporting these mineral resources, foreign investors should rather be encouraged to cite manufacturing plants in the country, use the resources as raw materials to produce within the country to create jobs and grow the nation’ gross domestic product (GDP).

The Minister of Mines and Steel Development, Olamilekan Adegbite, who spoke at a summit in Abuja tagged: “Leveraging Future Minerals for Sustainable Development, said Adegbite said global focus has shifted to developing a low-carbon economy that would utilise future minerals.

He said: “Luckily, Nigeria is richly endowed with critical minerals. Lithium and tantalite are found in parts of the extensive pegmatite belts of Nigeria. Lithium is mined by artisanal miners in Kogi, Kwara, Ekiti and Cross River states. Tantalite, tin and nickel are found in Jos, Nasarawa, Kogi, and several other states. A large amount of rare earth minerals ore was discovered in the pegmatite and granites of Nigeria. Graphite is found in Kaduna State.”

The minister recalled that during the summit in Dubai where several countries, investors and mining companies were represented, Tesla approached Nigeria with a proposal of investing in the mining sector to enable it export Nigeria’s lithium which is of high quality out of the country for the manufacturing of batteries for electric cars but the government rejected the offer. He said they’d rather come and build the industry in the country and produce the batteries.

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Adegbite said: “Anything that is mined in Nigeria must have value addition to the country; we must try to use them within Nigeria than exporting them. When I was in Saudi Arabia, we were approached by Tesla, a lot of its battery companies were there and they approached Nigeria, they were interested in our Lithium and I said no, we don’t want to export lithium from Nigeria, come to Nigeria, come and establish your factory plant. Mine the lithium, produce the batteries and then you can export that, gone are the days when we would export raw minerals.”

So, we are encouraging investors to come in to mine or process.”

He explained that electric vehicles and battery storage would account for about half of the energy minerals demand over the next two decades, spurred by the increasing demand for battery materials. Battery storage minerals primarily comprise copper, cobalt, lithium, nickel, platinum group minerals, and to a lesser extent, aluminium, chromium, graphite, manganese, rare earth elements and zinc. Mineral demand from electric vehicles and battery storage is predicted to grow between 10 and 30 times by 2040.

Adegbite also said: “We cannot be left out of the global rush to develop our vast deposits of these mineral resources. This administration has taken so many fundamental steps to explore our deposits of these minerals to salvage the low electricity generation by diversifying the country’s energy mix towards renewable alternatives. Nigeria has no choice but to join the global race in developing the critical minerals value chain.”

Chief Executive Officer (CEO) SoundCore Group, Tony Nwakalor said the time for the sector to blossom is now, taking into consideration recent happening in the oil sector with oil majors exiting Nigeria and opting for renewable energy projects rather than new crude oil exploration in the country.

He said the solid minerals sector is becoming the goose that lays the golden egg for the economy, replacing oil and gas as the main stay of our economy medium to long term.

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Nwakalor added that the challenges bedeviling the sector are myriad, ranging from poor understanding of the solid minerals and mining ecosystem by majority of the stakeholders to low technical competence across board and lack of harmonised fiscal regime allowing for issues like double taxation at the Federal Government and state government levels and a lot more.

The former Governor of Nasarawa State and Chairman Senate Committee on Solid Minerals, Mines, Steel and Metallurgy, Sen Tanko Al-Makura said in no time, the solid minerals sector would become the major avenue for revenue generation for the country and it would be achieved when the sector is unbundled.

“The Senate is very passionate about this sector. The bill has passed the first and second reading, it is already been processed through public hearing. As soon as we resume section, it is going to be presented for third reading and final legislative action. What that means it that the sector will be privately run with certain participation of government.

“With time we will discover the mining sector will be one of the most robust avenue for revenue generation for the country, especially now that the government is moving towards diversification of the economy. One of the sectors that this diversification could be fully rooted in is the solid minerals because there is no state in the federation that solid minerals do not abound.

“The summit is coming at the right time and I am calling on private miners to collaborate with the ministry because very soon we will have a legal frame work for effective participation of private sectors in the solid minerals.”

The United Arab Emirates (UAE) has been credited as being one of the largest oil producers in the world. It produced around 3.7 million barrels of oil daily last year with an estimated reserve of 66 billion barrels in mostly its Zakum field, which is the third largest in the Middle East.

Despite this, the UAE like most countries in the world is beginning to turn its attention to future minerals. It solidified this move in January this year when it invited over 200 professionals to Riyadh, where it held a ‘future minerals forum’ and fortunately, Nigeria was represented.

Adegbite explained that critical or future minerals are the metallic or non-metallic elements essential for the growth and functioning of modern technologies. These minerals include copper, lithium, nickel, cobalt, tin, tantalite and rare earth elements.

Already, many nations are aggressively initiating policies and strategic models to ensure accelerated development of these critical energy minerals.

The growing demand for critical minerals is propelled by the urgent need to secure a low-carbon future. Countries are increasingly relying on rare earth elements and critical minerals to support their climate commitments. The 2015 Paris Agreement on climate change emphasizes the need to decline the use of non-renewable components in energy generation. Renewable sources of energy provide an alternative to the energy transition economy.

The consequence of this major shift is a high demand for critical minerals for use in climate-friendly technologies. The World Bank has estimated the demand for these minerals to triple by 2040. Undoubtedly, the deployment of critical minerals for a clean energy transition will remain significantly intensive for a long time.

The post Why Nigeria rejected Telsa’s bid to mine raw lithium first appeared on SwordPress.NG !.

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