Nigeria's lithium ambition is getting an unexpected boost

The News

LAGOS — Nigeria’s ambition to build a value-added supply chain for critical minerals including lithium is getting a significant boost from an unlikely source: an e-marketplace startup.

Sabi, the Lagos-headquartered business-to-business e-commerce company focused on the informal economy, has been quietly building expertise as a middle man for miners seeking to export. In recent weeks, it inked separate deals with two companies — Italy’s Snowball Holdings, and Transition Resources from the US — that plan to set up lithium processing plants in the country over the coming year.

Sabi will ensure both companies have regular supply from discrete small-scale lithium miners across Nigeria, chief executive officer Anu Adasolum told Semafor Africa. It will also manage the companies’ access to services like quality control and logistics needed to export the refined mineral abroad.

The expected daily processing capacity for each plant will be 500 tons per day “with scalable capacity of up to 1,000 tons per day,” Adasolum said. The US will be the primary export destination for now but Italy and Germany could be accessible in the future, she said.

Sabi is also exploring avenues to advance mineral processing in Zambia for copper and Tanzania for nickel. These moves reflect a broader regional wave to supply in-demand commodities to the world, especially in relation to the energy transition.

Step Back

There is a big push by African countries determined that the transition to clean energy does not leave them at the bottom of the chain as mere raw materials suppliers. In this case, that would be critical minerals including lithium, cobalt, and copper, all used for producing rechargeable batteries.

Lithium’s use in cleantech is expected to see demand rise 13-fold by 2040, according to the International Energy Agency. African governments see a move up the value chain as an important step in expanding their economies and creating much-needed employment. Basic processing of lithium in-country could double the value of exports, according to experts.

Dele Alake, Nigeria’s mines chief, said last year that Nigeria will “do everything possible to discourage the carting away of our solid minerals without value addition.” The country’s lithium sector has achieved a few milestones on the value addition front this year.

Two processing plants were opened in two separate northern states within two weeks of each other in May. Each was built by a different Chinese company with the respective state government as a part owner.

The take-off of these plants is “a clear indication” that Nigeria is “postured to encourage foreign investment in this sector,” Aderonke Alex-Adedipe, managing partner at Lagos-based tech-focused law firm Pavestones, told Semafor Africa. Foreign companies looking to set up lithium processing in Nigeria face “a comprehensive framework” of permits and rules, including those governing local content requirements and sustainability practices, Alex-Adedipe said.