Case for Critical Minerals Legal and Policy Reform in Nigeria

As the global economy shifts to clean energy, Nigeria’s rich deposits of critical minerals like lithium and tantalite remain underutilised due to outdated legal frameworks. With the mining sector contributing under 1% to GDP, there’s an urgent need for legal reform to capture potential growth. This article discusses barriers and calls for a comprehensive reform agenda to better position Nigeria in the global mineral market.

As the world shifts towards clean energy, countries rich in critical minerals are at a pivotal point. A recent partnership between the U.S. and Ukraine, marked by a joint investment fund set to launch in April 2025, illustrates how nations can use their mineral resources, including titanium and lithium, to attract global investments. This highlights that in contemporary economics, minerals are far more than mere commodities—they’re tools of geopolitical and economic influence.

Nigeria, with its significant reserves of vital minerals like lithium and tantalite, has yet to fully exploit this advantage. Surprisingly, its mining sector contributes under 1% to GDP, starkly contrasting with nations that successfully transformed their mineral fortunes into broader economic wealth. This stagnation is largely due to Nigeria’s outdated legal framework, which lacks the clarity and incentives needed to draw serious investments and ensure sustainable resource management.

With the costs of inaction rising, Nigeria risks merely exporting raw minerals as other nations build value-added industries and solidify their positions in the global clean energy market. This article will explore Nigeria’s unrealised potential in critical minerals, pinpoint legal and policy hurdles impeding progress, and suggest reforms that could enhance Nigeria’s role in the global critical minerals landscape.

Critical minerals, which are crucial for various modern technologies, face supply risks tied to geopolitical dynamics and limited production sources. Their importance spans renewable energy, defence systems, electronics, and telecommunications, among others. Rare earth elements, lithium, cobalt, and more—these minerals are irreplaceable in applications from electric vehicle batteries to high-performance magnets for wind turbines.

Countries typically maintain updated listings of critical minerals based on their economic contexts and vulnerability, adjusting as technological needs and market trends evolve. Nigeria sits on considerable reserves of critical minerals that could cement its spot in the global energy supply chain. Key resources include lithium in Nasarawa, Kogi, and Kwara, essential for batteries and renewable energy, along with tantalum and niobium in columbite-tantalite deposits on the Jos Plateau, which are vital for electronics and advanced materials.

Despite this mineral wealth, Nigeria’s governance of these valuable resources lacks specialised provisions. The overarching mining framework is governed by the 1999 Constitution and the 2007 Minerals and Mining Act, which declare state ownership of all mineral resources. Essential guidance comes from the Nigerian Minerals and Mining Regulations and the National Minerals and Metals Policy, but these documents fail to offer clear paths for managing critical minerals.

While institutions like the Ministry of Mines and Steel Development and the Nigerian Geological Survey Agency provide some oversight, they don’t focus on critical minerals specifically. Recent policies acknowledge the importance of this sector, yet implementation has been slow. A major issue is the absence of a clear classification system for critical minerals, leading to a lack of focus and support compared to less critical resources.

Moreover, the existing legal framework struggles with enforcement and suffers from a lack of capacity to regulate effectively, leading to rampant illegal mining and smuggling, which undermines any efforts toward sustainable governance.

Nigeria stands at a crossroads regarding its critical minerals, facing significant legal and policy challenges that hinder its potential growth. The country must overhaul its outdated legal frameworks and improve governance focused on these valuable resources to avoid becoming just another raw material exporter. By recognising the importance of critical minerals, Nigeria could unlock opportunities to become a significant player in the global economic landscape, particularly as the world moves towards clean energy solutions.

Original Source: guardian.ng