Nigeria is gaining momentum in its efforts to establish a value-added supply chain for essential minerals, especially lithium, thanks to a collaboration with Sabi, an informal economy-focused e-commerce startup based in Lagos. Two international businesses, US-based Transition Resources and Italy’s Snowball Holdings, who intend to build Lithium processing facilities in Nigeria, have agreements in place with Sabi. The business will oversee quality control and Export logistics, managing the supply of lithium from small-scale miners, with the US serving as the primary destination initially. It is anticipated that the factories will process up to 1,000 tonnes of lithium every day.
Due to its experience operating as a middleman in other industries like as consumer products and agriculture, Sabi plays a significant role in the supply chain Logistics for minerals. Using its own software, TRACE, it complies with European ethical sourcing regulations and gives exporters Sustainability statistics. Nigeria is concentrating on value addition, tripling the value of exports through domestic processing, in response to the lithium market’s explosive expansion, which is expected to increase thirteenfold by 2040 due to its application in sustainable energy.
lithium processing in Nig. must overcome several obstacles before expansion.
Also, two lithium processing facilities constructed by China were recently opened in the nation; this is interpreted as a sign of Nigeria’s increasing attraction to international investors. Other African countries, such as Tanzania and Zambia, are also progressing with their efforts to process minerals. Nigeria’s overarching objective is to guarantee that African nations advance up the value chain during the energy transition, as opposed to merely serving as raw material suppliers. Technology Rails for African Commodities Exchange (TRACE) software is a vital part of Sabi’s operations, assisting it in streamlining the compliance and logistics procedures related to the export of minerals like lithium.
With foreign markets, particularly in Europe, demanding rigorous adherence to ethical sourcing norms, the program tracks the movement of goods, assuring transparency and traceability—a feature that is becoming increasingly vital. With the ability to gather and handle sustainability data, TRACE enables exporters to comply with rules such as those imposed by the European Union, which demand evidence that raw materials are produced ethically and that social and environmental standards are respected. Nigerian lithium processing must overcome several obstacles before it can be expanded. Deficits in Infrastructure are a serious issue.
Bureaucratic obstacles and governance problems are challenging.
Mining operations in Nigeria use enormous amounts of energy, yet the country’s electrical grid is infamously unstable. Processing facilities will find it difficult to process 500–1,000 tonnes of lithium per day in the absence of steady energy. Furthermore, the infrastructure for transportation is insufficient. Bureaucratic obstacles and governance problems are also challenging. The Nigerian government has stated that it is dedicated to increasing the value of its Mineral exports, but the regulatory landscape in the nation is frequently unpredictably unstable. Permit approval procedures are drawn out and local content restrictions might make investments more challenging for foreign enterprises.
Investors remain cautious about Corruption and inefficiencies in governance, even though Nigeria has started creating a regulatory framework for the industry that emphasises environmental principles. The transition towards value addition and collaborations with global corporations presents a range of prospects and obstacles for indigenous miners. Small-scale miners are concerned about how the collaborations with huge international businesses can affect them, even while this opens up new markets and promises greater pricing for our minerals, Ibrahim Musa said on behalf of a local miners’ association. This emphasises how bigger companies entering the market may clash with small-scale miners.
Related Article: Tapping Lithium Market for Growth in Nigeria
As of 2022, the Mining industry in Nigeria made up only 0.3% of the GDP of the nation, but this percentage is anticipated to increase as lithium processing facilities come online. Experts predict that, if grown appropriately, Nigeria’s lithium exports might treble in value and bring in up to $500 million yearly by 2030. Furthermore, as value-added processing advances, the mining industry may generate over 50,000 direct and indirect jobs. With processing units in place, we are positioned to dramatically boost the value of these exports, which would assist the Nigerian Economy and create thousands of employment, according to Nigerian Mines Minister Dele Alake.