Nigeria and South Africa have forged a landmark mining cooperation pact aiming to enhance regional integration and shift towards local resource management. Signed on April 17, 2025, the agreement involves joint exploration of minerals, particularly lithium and iron ore, and seeks to bolster jobs and economic diversification. This partnership could yield significant benefits for both nations and set a new precedent in African resource management.
In a pivotal agreement that could change the African mining sector, Nigeria and South Africa have signed a cooperation pact aimed at bolstering regional resource management and economic cooperation. Signed on April 17, 2025, the deal brings together Nigeria’s Minister of Solid Minerals Development, Dr Dele Alake, and South Africa’s Minister of Mineral Resources and Energy, Gwede Mantashe. This collaboration includes joint geological mapping and exploration of key minerals like lithium and iron ore, all while prioritising local labour and technology.
Nigeria and South Africa, as Africa’s top two economies, are on different paths regarding their mining industries. South Africa boasts advanced mining technologies and a strong mining policy framework while Nigeria has plenty of undeveloped mineral reserves across its 36 states. But, Nigeria’s mining sector contributes less than 1 percent of its GDP, which starkly contrasts with South Africa’s sector, which makes up about 8 percent. This disparity is due to decades of infrastructural neglect and over-reliance on oil.
Although Nigeria is Africa’s largest oil producer, its economy is precariously dependent on crude oil revenue, accounting for 90 percent of its export earnings and 70 percent of government funds. Alarmingly, less than 1 percent of Nigerians work in this sector. Through this minerals partnership, Nigeria is eager to harness South Africa’s mining expertise to fully tap into its mineral resources, enhancing both countries’ economic prospects and aiding in Africa’s broader aim for self-sufficiency.
The partnership outlines a phased strategy that includes comprehensive geological mapping and downstream activities. By the end of 2026, both countries plan to use drones to gather vital geological data and zero in on areas rich in minerals. Initial exploration is to kick off in mineral-heavy regions, starting with Nassarawa (lithium) and Kogi (iron ore). Nigeria’s lithium, estimated at 150,000 tonnes, could provide a sizeable share of the global demand needed for the electric vehicle market.
Should the exploration yield fruitful results, the focus will shift to establishing mining operations and processing facilities locally. This shift aims to move both countries up the economic value chain and lessen reliance on raw exports. With successful implementation, up to 500,000 jobs might be created across the mining value chain, potentially growing Nigeria’s industrial sector by 8 percent, while possibly boosting GDP by around $12 billion annually by 2030.
For South Africa, the partnership opens a strategic access point into West Africa’s untapped mineral reserves, particularly beneficial when it comes to lithium, a resource currently absent in South Africa. Moreover, South African mining equipment manufacturers will find new export opportunities as they support Nigeria’s burgeoning mining sector, facilitating long-term trade relationships.
As South Africa strengthens its leadership in Africa’s mineral development narrative, the agreement highlights a significant shift in how African nations manage resources—pivoting away from a model dominated by foreign players to one that emphasises regional cooperation and agency. Countries like Burkina Faso and Mali are also upping their game in terms of owning their resources, indicating a newfound trend on the continent.
The Nigeria-South Africa minerals pact isn’t just another deal; it could set a standard for African nations striving for greater control over their mineral wealth. The emphasis on local processing and value addition might be crucial, as Africa has historically exported raw materials while importing refined goods. Processing local minerals could create much-needed jobs and bolster countries’ abilities to derive economic value from their resources.
This pact aligns well with the African Union’s Agenda 2063, which champions industrial growth and economic integration as cornerstones for a prosperous future. By collaborating on mineral resources and focusing on added value, Nigeria and South Africa could pave the way for other African nations looking to navigate similar paths.
In a world where demand for critical minerals is rising and competition for resources is heating up, this alliance between Nigeria and South Africa signals a strategic move towards ensuring that Africa can better harness its wealth for the benefit of its own people. This partnership might well prove a crucial step towards reshaping Africa’s economic future for generations to come.
The Nigeria-South Africa minerals partnership signifies a crucial step in Africa’s quest for self-reliance in resource management. By emphasising local expertise, technological collaboration, and value addition, this agreement offers a template for other countries seeking to enhance their mineral wealth. As global demand for vital minerals escalates, this alliance not only positions the two nations favorably but also holds the potential to transform the broader African economic landscape for the better.
Original Source: www.orfonline.org