House Of Reps Probes Solid Minerals Development Fund

The House of Representatives has mandated its Committee on Solid Minerals Development to conduct an investigative audit of the Solid Minerals Development Fund (SMDF) from 2015 to the present. This move follows the adoption of a motion titled “Need to Upscale the Lithium Industry and Value Chain as a Catalyst to Drive Energy for Sufficient and Economic Growth”, which was introduced by Hon. Victor Obuzor (PDP, Rivers) during Wednesday’s plenary.

In presenting the motion, Hon. Obuzor highlighted Nigeria’s vast mineral resources, including metallic ores and gemstones, which are spread across various geological zones. Despite this, the mining sector remains underdeveloped. He pointed out that while mining was a major contributor to Nigeria’s economy in the 1900s, reaching its peak in the 1950s at roughly 45% of GDP, the sector’s contribution has dwindled significantly, particularly with the rise of oil and gas. Currently, mining contributes less than 0.8% of Nigeria’s GDP, far below the continental average of nearly 5%.

The lawmaker specifically raised concerns over the potential of Nigeria’s lithium deposits, a critical mineral used in energy-dense rechargeable batteries essential for the global clean energy transition. Lithium’s use in portable devices and grid storage is pivotal, and its global demand has surged in recent years. Obuzor noted that despite exploration surveys commissioned by the Ministry of Solid Minerals Development under the National Integrated Mineral Exploration Project (NIMEP), there is no definitive estimate of Nigeria’s lithium reserves. However, significant lithium-bearing minerals have been discovered in states such as Nasarawa, Kogi, Kwara, Ekiti, Cross River, Ogun, and Plateau.

Obuzor also pointed out that the price of high-quality lithium carbonate has soared from $5,180 in 2010 to $46,000 in 2023, with a peak of $68,100 in 2022, making previously abandoned lithium deposits economically viable. The International Energy Agency (IEA) predicts that global demand for lithium could rise 13-fold by 2040. Despite these opportunities, Obuzor lamented that lithium exploration in Nigeria remains poorly funded, with most projects failing to reach their full potential due to challenges in design, construction, and production.

One major issue he raised was that the Solid Minerals Development Fund (SMDF), which is intended to catalyze private sector investment in Nigeria’s mining sector, has not made significant investments in lithium mining.

In light of these concerns, the House of Representatives adopted the motion and urged the Ministry of Solid Minerals Development to create the Nigerian Lithium Production Agency, as mandated by the Nigerian Minerals and Mining Act 2007, to develop a vertically integrated lithium industry. Additionally, the House called for increased funding for the Nigerian Geological Survey Agency (NGSA) to carry out mineral site mapping and high-resolution airborne surveys, including radiometric and electromagnetic surveys, to accurately determine the extent of Nigeria’s lithium deposits.