Electric cars and vehicles are making their way out of sci-fi movies and into the homes of many. The world is quickly shifting to renewable energy sources to reverse the effects of climate abandoning fossil fuels. Nigeria produces approximately 1.3–1.6 million barrels of crude oil per day (bpd), although this fluctuates due to security challenges, technical issues, and global market dynamic.
Nigeria holds an estimated 36.9 billion barrels of proven crude oil reserves, making it the largest producer in Africa. The oil and gas sector contributes approximately 7–10% to Nigeria’s GDP, although its significance in government revenue and foreign exchange earnings is far greater. Oil accounts for around 90% of Nigeria’s foreign exchange earnings and about 60–70% of government revenue. Key fields are located in the Niger Delta Basin, which hosts the majority of Nigeria’s onshore and offshore oil reserves. Nigeria needs to diversify its income now more than ever and a good source of this diversification is the mining and exportation of Rare earth elements (REEs) like lithium, cobalt, and tantalum.
These minerals lithium carbonate is approximately $13,850 per metric ton (USD) in Asia. Battery-grade lithium hydroxide ranges between $8,600 and $10,000 per ton (USD). Cobalt prices fluctuate depending on grade and form. As of now, cobalt hydroxide prices are around $23,250 per metric ton (USD). Tantalum pentoxide (99.95%) FOB is priced between $286 and $316 per kilogram (USD). This translates to roughly $301 per kilogram on average. Nigeria has untapped reserves of these critical minerals, which are in high demand globally, particularly for renewable energy technologies, electronics, and electric vehicle (EV) batteries. If Nigeria invests in the extraction, processing, and export of lithium, cobalt, and tantalum, the economic benefits could be substantial offering a new form of revenue for the country. Nigeria holds significant reserves of lithium and cobalt, primarily found in regions such as Kogi, Nasarawa, Ondo, Ekiti, and Kano states. Lithium in Nigeria is associated with rare metal-bearing pegmatites, alongside other minerals like cassiterite and columbite-tantalite (coltan). These deposits are essential for producing lithium-ion batteries, critical in electric vehicles (EVs), renewable energy systems, and electronics. Similarly, cobalt, found in Kano and other areas, is vital for stabilizing lithium-ion battery performance.
The economic potential of these minerals is immense. Lithium and cobalt are in high demand due to the global shift toward clean energy, with lithium commanding prices ranging from $30,000 to $60,000 per metric ton in recent years, depending on purity and market dynamics. Properly harnessing these resources could significantly boost Nigeria’s economy, especially in diversifying away from oil. This requires substantial investment in exploration, refining capacity, and infrastructure according to a report by LSE .
Domestically, these minerals could catalyse Nigeria’s transition into EV manufacturing and renewable energy solutions, aligning with global trends toward net-zero emissions. However, challenges such as illegal mining, environmental concerns, and resource-based conflicts need to be addressed through robust policies and stakeholder collaboration.
If sustainably developed, Nigeria could emerge as a key player in the global supply chain for critical energy transition materials. Despite this potential, the REE sector remains underdeveloped. Bureaucratic delays, illegal mining, and poor infrastructure hinder exploration and exploitation. However, global demand presents an opportunity for Nigeria to attract investors by improving its regulatory framework and emphasising sustainability.
