House Of Reps Probes Solid Minerals Development Fund

The House of Representatives has mandated its Committee on Solid Minerals Development to carry out an investigative audit of the Solid Minerals Development Fund (SMDF) from 2015 to date.

The resolution followed the adoption of a motion on the “Need to Upscale the Lithium Industry and Value Chain as a Catalyst to drive Energy for Sufficient and Economic Growth,” moved by Hon. Victor Obuzor (PDP, Rivers) at plenary on Wednesday.

Moving the motion, Obuzor noted that Nigeria’s vast mineral resources, including metallic ore, and gemstones, are deposited across various geological zones, yet the nation’s mining sector remains underdeveloped.

He said mining was a major contributor to the economy in the 1900s, reaching a peak in the 1950s at roughly 45%

of GDP but the industry declined as a result of the discovery of oil and gas, adding that currently, mining accounts for less than 0.8% of GDP, which is much less than the average of almost 5% for the continent.

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The lawmaker said Lithium, a reactive metal, is utilised in energy-dense rechargeable batteries which are crucial for the global clean energy transition, adding that the lightweight compact batteries store more energy per volume, making them ideal for portable devices and grid storage.

He expressed concern that; “there is no definitive estimate of the country’s lithium reserves, despite exploration surveys commissioned by the Ministry of Solid Minerals Development under the National Integrated Mineral Exploration Project (NIMEP). Significant lithium bearing minerals have, however, been discovered in Nasarawa, Kogi, Kwara, Ekiti, Cross River, Ogun, and Plateau states.

“The country is facing a pivotal moment in its mining history due to rising global demand for renewable energy but is repeating past mistakes in the oil and gas sector by focusing solely on the upstream value chain, losing the opportunities that come with operating in the downstream segments.

“The price of high-quality lithium carbonate increased from $5,180 in 2010 to $46,000 in 2023 (with a peak of $68,100 in 2022), making previously abandoned deposits economically viable. The IEA predicts global demand could rise 13 times by 2040.

“Despite an estimated $700 billion worth of mining potential, lithium exploration in Nigeria remains poorly funded, with only a fraction of projects reaching full potential due to challenges in project design, construction, and production.

“The Solid Minerals Development Fund (SMDF), a sovereign fund aimed at catalysing private sector investments in Nigeria’s mining sector, has not made any significant investments in lithium mining.”

Adopting the motion, the House urged the Ministry of Solid Minerals Development to cause the creation of the Nigerian Lithium Production Agency in line with Part II Section 4(P) of the Nigerian Minerals and Mining Act 2007 with the mandate to develop a vertically integrated lithium industry.

It also urged the Ministry of Solid Minerals Development to request increased funding for the Nigerian Geological Survey Agency (NGSA) to enable it to carry out mineral site mapping and high resolution airborne surveys, including radiometric and electromagnetic surveys, to accurately determine the quantity of lithium deposits in Nigeria.