Nigeria’s 7 Strategic Minerals: Our Alternative to Clean Energy?

Taking a ‘peek’ into the history of Nigeria, one can be overcome with acute nostalgia for a country which had been largely sustained by agricultural and solid mineral extraction prior to the oil boom. Though richly bestowed with a minimum of 44 different types of mineral resources, predominantly untapped, Nigeria is yet to gain value from many of its mineral resources which have been identified in more than 500 locations.

While the country depends on oil as a major source of revenue, the current global shift from crude oil to renewable and other forms of clean energy has triggered the fall of oil price, with attention shifting to the mining sector as a sector with enormous potential for clean energy – whilst throwing up the challenges of utilising certain minerals, such as coal for energy, as a direct result of it been a top source of carbon dioxide (CO2) emissions.

Certain minerals have inadvertently positioned some developing countries on a national path for sustainable development. For instance, the Democratic Republic of Congo has experienced 100% annual increase in revenue generated from cobalt - a mineral resource which is largely demanded for the production of lithium-ion batteries used in electric cars today.

The Federal Government, through the Ministry of Mines and Steel Development, had early in 2015 identified ‘Seven Strategic Minerals’ – coal, bitumen, limestone, iron ore, barites, gold and lead – for priority development; in a drive to diversify the flailing oil-dependent Nigerian economy. Attendant to that focus to increase the GDP contribution of mining from 0.33% to 7%, there is urgent need to mobilise resources to bridge the infrastructural and knowledge gaps in the country, in order to find alternative clean energy sources for economic diversification through the minerals and other renewable sources which the country has in abundance.

This is especially more urgent now that the revenue generated from liquid gold continues to decline due to the global shift to cleaner energy sources.

The Current Status of Nigeria Minerals
Neglected, due to the singular focus on crude oil, the mining sector is today in dire need of revamping. The sector is marginally regulated and over 90 per cent of mining activities in the country are within the cadre of Artisanal and Small-Scale Mining (ASM), out of which 75 percent is carried out illegally and to which there is minimal application of technology.

Limestone is the major source of income from the industry, and it allegedly forms about 80% of indigenous entrepreneur, Aliko Dangote’s hugely successful conglomerate, the Dangote Group; with other major players including Lafarge Africa Plc – part of an international conglomerate - and BUA Group.

The national reserves of the Seven Strategic Minerals are estimated at 3 billion tonnes of coal, 42 billion tonnes of bitumen (also known as asphalt), limestone (undisclosed), 3 billion tonnes of iron ore, 7.5 million tonnes of barite, 5 million tonnes of lead zinc and gold in small scale.

Analysis and projections by experts indicate that Nigeria has the capacity to generate at least N5 trillion yearly from mining and export of its vast solid minerals deposits. Ironically, while the nation earns over 80 percent of her revenue from the petroleum industry, the mining sector’s growth and contributions to GDP have remained less than ideal with only about N400 billion (or about 0.33%) contribution to the GDP in 2015.

Clean Alternatives
Research on available innovations for the use of mineral resources in achieving clean energy reveals that cobalt and natural gas are some identified resources available to trigger a low-carbon future. Unfortunately, unlike the Democratic Republic of Congo which supplies 60% of the world’s cobalt, Nigeria is not endowed with cobalt which is today a critical element in lithium-ion batteries used in electric cars. Amongst Nigeria minerals, however, it was found that coal and bitumen can be refined into high-quality oil called ‘synthetic crude’. But, the synthetic crude is not a source of clean energy to substitute fossil fuel.

All hope is not lost. More opportunities lie on natural gas deposits in Nigeria, which is currently used by Russia as an alternative to crude oil energy. Natural gas is billed by its supporters, including former President Barack Obama, as a clean fuel that could play a big role in a low-carbon future by edging out, for example, coal as an electricity source and diesel as truck fuel. Natural gas emits 50 percent less carbon dioxide than coal and crude oil when you burn it, and can be used in heating and cooking, electricity generation, transportation fuel, and other industrial uses.

Natural gas is primarily methane - a product of decomposition of organic matter and of the carbonisation of coal. The natural gas produced as a byproduct of crude oil is classified as associated gas, and generally regarded as an undesirable byproduct, which is either reinjected or flared. To reduce carbon emission, some countries have increased their use of “non-associated” natural gas – a form of natural gas that is produced from a predominantly natural gas pool and is not associated with crude oil or bitumen. For example, in 2009, 89% of the United State’s wellhead production of natural gas was non-associated.

Nigeria’s Opportunity
The International Energy Agency (IEA) has stated that the growth of natural gas demand is relatively strong in the industry as the region’s economies grow and diversify, as well as in the power sector, where there are opportunities to substitute gas for oil.

According to ExxonMobil’s global view of energy demand and supply report, “as global economies grow…, the energy mix will continue to diversify. Nuclear and renewables will grow strongly with natural gas growing the most”. A new analysis and forecast to 2022 by IEA also indicates that gas production will grow faster than oil and coal over the next five years due to low prices, ample supply, and its role in reducing air pollution and other emissions. The forecast indicates that gas demand is expected to grow at 1.6 percent yearly, a slight upward revision from last year’s forecast of 1.5 percent. According to IEA, this means that yearly gas consumption will almost reach 4,000 billion cubic metres (bcm) by 2022, from around 3,630 bcm in 2016.

Diversification of power sources from coal firing is today leading to an increase in demand for natural gas-fired power generation, especially among the emerging countries. This implies that, as a developing nation with enormous need for stable power supply, strong investment into natural gas power is also vital to leapfrog Nigeria’s economy to industrialised heights.

The Resolution
What the country needs urgently is investment in research and innovation that would enhance the exploration and beneficiation of mineral resources, the production of natural gas and the harnessing of renewable energy, as it is unprogressive to wait for other countries to develop such technologies.  With such determination, Nigeria can leverage on its enormous gas resource – expanding on its Nigerian Liquefied Natural Gas (NLNG) project - and position itself as a global hub for natural gas. This is a move that can be replicated in a mining sector with a circular chain of dependencies; one which incentivizes exploration, local manufacturing and utilization of technologies, beneficiation and internal consumption as well as exportation of resources, all done using sustainability strategies.

 

Bekeme Masade, Chief Executive, CSR-in-Action 

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