A global scramble for lithium, the mineral critical to electric vehicles or clean energy, is rapidly reshaping Nigeria’s mining sector as the country prepares to commission two major lithium processing plants this year.
The development signals a significant policy shift from raw mineral exports to value-added domestic production, potentially positioning Nigeria as a key player in the global energy supply chain.
Dele Alake, minister of solid minerals development, announced that a $600 million lithium processing plant, located near the border of Kaduna and Niger states, is slated for commissioning within this quarter.
Additionally, a $200 million lithium refinery on the outskirts of Abuja is nearing completion. These are just the beginning, as two more plants are expected to be operational in Nasarawa State before the third quarter (Q3) of 2025.
“One of the first things we did was tighten the licensing process. We made it clear that no one gets a mining license without showing a real plan for local processing,” Alake said on X, formally known as Twitter.
He added, “Exporting raw minerals without adding value here at home wasn’t helping our economy, and we had to stop that. Since then, we’ve seen real results of over $800 million in processing investments last year alone.”
Read also: China to establish electric vehicle factories in Nigeria, tapping lithium riches
A Reuters survey shows over 80 percent of the funding for the four plants has come from Chinese companies, notably Jiuling Lithium Mining Company and Canmax Technologies while the remaining stakes are held by Nigerian-owned Three Crown Mines.
Though Chinese partners have not yet issued public statements, the influx of foreign investment reflects a broader global interest in Nigeria’s high-grade lithium reserves.
Nigeria can get into an industry still considered mainly on the ground floor. Discoveries of lithium deposits in Plateau, Oyo and Kaduna states allow the country to craft better policies than it did with other minerals like gold.
“Exploration has also been a priority. When we took office, Nigeria had only spent $2 million on mineral exploration,” Alake said.
He added, “By comparison, Côte d’Ivoire had spent $148 million, and South Africa more than $300 million.”
“No investor takes you seriously without credible geological data. That’s why this year, we’ve secured N1 trillion specifically for mineral exploration to build the foundation for a globally competitive sector,” Alake said.
A booming global lithium market
The timing of Nigeria’s investment drive couldn’t be more strategic. Global demand for lithium is soaring, fuelled by the rise of electric vehicles (EVs) and the rapid growth of the energy storage sector.
Lithium iron phosphate (LFP) batteries, now widely seen as the future of large-scale energy storage, are more cost-effective and sustainable than traditional lithium-ion batteries, which rely heavily on cobalt and nickel.
According to Rho Motion, a leading energy transition consultancy, demand for energy storage batteries surged 51 percent last year and is projected to grow another 40 percent in 2025.
Though electric vehicles still account for the majority of lithium battery use, energy storage is catching up fast and is expected to comprise roughly 20 percent of total market demand within five years.
This spike in demand has led companies like Tesla to accelerate their transition away from cobalt-intensive batteries toward lithium-iron alternatives.
Notably, Chinese automaker BYD surpassed Tesla in 2024 to become the world’s largest EV manufacturer, primarily by embracing LFP battery technology.
