Lithium Deal: Nasarawa Nets $1.5m Signature Bonus, N2.6bn Fresh Consideration

Nasarawa State government has begun to earn direct financial returns from its entry into lithium mining in Endo.

Governor Abdullahi Sule yesterday opened up the books on signature bonuses and annual considerations accruing to the state.

Governor Sule, who spoke during an expanded State Executive Council (SEC) meeting held at the Government House, said he was making the figures public to demonstrate transparency and to forestall misinformation about the management of the state’s mineral resources.

According to the governor, the state government deliberately secured the mining licence in the name of the Nasarawa State Government through the Nasarawa Mining Company Limited, and not in the name of any individual, to guarantee long-term revenue for the state.

Governor Sule said the state received an initial $1.5 million signature bonus from its mining partner in Endo. He said that in line with his administration’s host community development principle, a third of the bonus was released to the community.

“We received an initial signature bonus of $1.5 million, a third of which, $500,000, amounting to about N800 million, was released to the Endo community for development projects executed with the input of the people themselves,” Governor Sule said.

Community leaders at the meeting, according to the governor, confirmed that the N800 million tranche funded a town hall, a clinic and water supply projects in Endo. The governor added that the mining licence is a state-owned asset valid until 2051. “Any governor that will come, we’ll go and leave it here also because the license is for 2051 and it belongs to Nasarawa State government,” he said.

Governor Sule further disclosed that following what he described as a renegotiation and signing of a supplementary agreement and deed of assignment with the state’s mining partner, the state has now earned more.

According to him, the state has now received N2.6 billion, representing the first year’s consideration under the new arrangement.

He stated that a portion of the fresh N2.6 billion payment would similarly be released to the Endo community, adding that further consultations would be held with the community to determine additional development projects to benefit from the funds. He reiterated, according to his address, that Nasarawa State’s mineral resources would continue to be managed openly and in the interest of the generality of the people. Providing further details on the transaction, the Managing Director of the Nasarawa State Investment and Development Agency (NASIDA), Ibrahim Abdullahi, said the financial structure was deliberately designed to protect state revenue.

Abdullahi explained that the Nasarawa Mining Company Limited was one of three thematic investment vehicles established by the Governor Sule administration and remains solely owned by the state government.

According to him, all proceeds from the venture accrue to state accounts. “The state’s inclusion in the mining venture, rather than allowing private operators exclusive benefit, was a deliberate decision led by the Governor,” Abdullahi said. He noted that the state’s model, under which the company earns both a signature bonus and a percentage for every ton of lithium mined, is now being replicated with other operators, including the Ganfeng Lithium Mining Company which is building a $250 million factory in Endo designed to process 18,000 metric tonnes per day.

Reacting to the financial disclosures, the Emir of Nasarawa, HRH Alhaji Usman Ibrahim Jibril, commended the administration’s openness in making the transactions public.

The Emir, however, called on the state government to ensure that mining operators in Endo and other host communities carry out proper Environmental Impact Assessments as required by federal law.

According to the Emir, such assessments should be displayed publicly for community input before approval, and should clearly spell out emergency action plans, compensation for damages, and land reclamation obligations once mining activities cease.

He urged the Ministry of Environment to engage directly with traditional institutions to ensure that operators fully comply with the requirement.

Traditional and community leaders at the meeting, including the Osu Ajiri, HRH Alhaji Suleiman Ahmed Eko, and the Administrator of Udege Development Area, also commended the Governor for what they described as transparency and for prioritising community welfare, while calling for greater local content in the workforce of mining operators.