Chinese Companies Grab Stake in Nigeria’s Lithium and EV Future
- Chinese companies are investing heavily in Nigeria’s lithium processing.
- Two major lithium facilities are under construction with Chinese backing.
- Nigeria’s lithium has high-grade deposits and significant potential.
- Government incentives include tax holidays for investors in lithium.
- President Tinubu’s administration emphasizes local value addition.
Chinese firms establish strong foothold in Nigeria’s EV sector
Chinese businesses are strategically placing themselves throughout Nigeria’s clean energy ecosystem as they aim to capitalize on the electric vehicle industry in Africa’s most populous nation. This year marks an ambitious move with plans for two significant lithium processing facilities in Nigeria, both featuring substantial backing from Chinese investors. Jiuling Lithium Mining Company is constructing a $600 million facility along the boundary between Kaduna and Niger states, with operations set to commence this quarter. Additionally, Canmax Technologies is establishing a $200 million plant in Nasarawa state, just a stone’s throw from the capital, Abuja, projected to begin operations in the third quarter of this year.
Investment surge highlights Nigeria’s lithium potential
The Chinese firms in the mix, holding majority stakes in these projects, account for over 80 percent of investment while local investors own the remainder. Jiuling has emerged as a leading global supplier of lithium salts since its inception in 2011, securing contracts with major players including the American automaker Tesla and China’s own BYD, which is recognized as the global leader in EVs. On the other hand, Canmax—which was originally a supplier of battery materials starting in 1997—has in recent years focused heavily on lithium processing. Recent estimates from the Ministry of Solid Minerals suggest that total Chinese investments in Nigeria’s lithium sector could reach around $1.3 billion, highlighting the country’s growing importance in this critical area of clean energy production.
Government incentives drive exploration and production in Nigeria
Despite current challenges, Nigeria is poised to become a more significant player in the global lithium market. Recent explorations have unveiled promising resources, with the country not yet a prominent producer like Australia or Chile. However, efforts by the Nigerian Geophysical Survey Agency have revealed a lithium belt that stretches from the northwest all the way to the southeastern border with Cameroon which has very high-grade lithium deposits. The government is also actively incentivizing exploration; initiatives include offering a five-year tax holiday, exemptions for machinery import duties, and substantial capital allowances. These incentives, coupled with President Bola Tinubu’s commitment to enhancing Nigeria’s mining sector, have positioned the country as an attractive destination for investors interested in local lithium processing and production.
In summary, Chinese companies are increasingly dominating Nigeria’s lithium landscape as they establish processing plants and secure investments in the growing electric vehicle sector. The Nigerian government, committed to promoting local resource processing and supporting investment, has rolled out various incentives. As the landscape evolves, Nigeria holds significant untapped potential that may reshape its role in the global lithium market and electric vehicle ecosystem.
