Partnership could boost local value creation in the African nation while strengthening Japan’s supply of critical raw materials.
Africa is rich in critical minerals essential for the global energy transition, digitalization, and even defense technology. Yet, experts say much of this resource wealth remains untapped or underutilized. Even where mining takes place, local value creation is usually limited, although processed products would generate significantly higher revenues. Instead, most raw materials are shipped abroad for processing, primarily to China. For decades, Beijing has secured access to Africa’s mineral wealth through trade agreements and infrastructure projects. Increasingly, however, Western countries are trying to position themselves as alternative partners to diversify their own raw material supply chains.
Last week, Nigeria and Japan reportedly agreed to closer cooperation in the field of critical minerals. The deal followed talks between Dr. Dele Alake, Nigeria’s Minister of Solid Minerals Development, and Michio Daito, President of JOGMEC, Japan’s state-owned organization for securing metal and energy supplies, which finances mineral exploration and extraction both domestically and abroad. The meeting took place during the ninth Tokyo International Conference on African Development (TICAD9) in Yokohama.
Nigeria’s Mining Sector: High Potential, Chronic Underinvestment
According to Alake, Nigeria is ready to help meet Japan’s demand for processed raw materials. He encouraged JOGMEC to invest in local extraction and processing, and hinted that Japanese companies could benefit from exemptions on import duties for mining equipment as well as tax incentives. The specific terms of cooperation are now to be reviewed by both governments.
Nigeria, once a major exporter of tin, lead, and coal, is believed to hold largely untapped reserves of lithium and rare earths. Today, however, its economy depends heavily on oil exports. Despite domestic mineral resources estimated at around $750 billion, mining contributes less than one percent to GDP, according to KPMG. Compared with other African nations, the sector remains chronically underfunded. Contributing factors include a lack of reliable geological data, regulatory uncertainty, and security challenges. To strengthen the industry, the government has introduced tax breaks and a dedicated investment fund worth roughly $39 million. In addition, mining licenses are to be granted only to companies that commit to local processing.
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