Nigeria's Mining Boom Challenges Oil's Economic Dominance

Nigeria has announced the discovery of a world-class polymetallic mineral deposit in Kaduna State, adding momentum to its strategy of developing mining into the country's second-largest economic pillar. The newly identified resources include nickel, copper, gold, platinum group metals and rare earth elements, while new lithium resource estimates further strengthen Nigeria's position in the global energy transition supply chain. At the same time, the government is accelerating mining reforms by promoting local mineral processing, revoking inactive mining licenses and attracting Chinese investment in large-scale lithium processing. Despite these developments, oil remains the backbone of the economy, with authorities targeting higher crude production while the Dangote Refinery continues to reshape the country's fuel market.

World-Class Critical Minerals Discovery Strengthens Resource Potential

The Nigerian Geological Survey Agency (NGSA) has confirmed the discovery of a major polymetallic deposit within the Gidan Waya pegmatite belt in the Jema'a Local Government Area of Kaduna State. The deposit contains nickel, copper, gold, platinum group metals and rare earth elements, making it one of Nigeria's most significant critical mineral discoveries in recent years.

The discovery was made by Steron Mining, with Kaduna State already recognized for the quality and grade of its platinum, lithium and associated rare earth mineral resources.

Separately, Steron Mining recently confirmed 3.3 million metric tons of lithium reserves at a project near Abuja, while total estimated mineral resources at the site reached 94.8 million metric tons, further reinforcing Nigeria's long-term potential as a supplier of energy transition minerals.

Government Accelerates Mining Reform to Build a Second Economic Pillar

Although oil remains Nigeria's primary source of foreign exchange, generating US$1.466 billion in crude export revenue during the first five months of the year, the government is intensifying efforts to transform mining into the country's second-largest revenue source.

Revenue from Nigeria's solid minerals sector reached US$46.3 million during the first 11 months of 2025, exceeding the US$38 million generated throughout 2024.

To support that goal, the federal government has introduced sweeping reforms requiring mining license applicants to submit plans for local mineral beneficiation and smelting, effectively discouraging direct exports of raw ore in an effort to retain investment, employment and value-added activities within the country.

Authorities have also revoked more than 1,600 inactive or improperly held mining licenses, while the Mining Cadastre Office has canceled over 4,700 dormant, expired or illegally acquired mining titles to curb speculative license holdings.

Chinese Investment Targets Nigeria's Lithium Processing Industry

Chinese companies have become some of the earliest major investors in Nigeria's emerging mining sector, with a particular focus on downstream lithium processing.

Jiuling Lithium has committed US$600 million to construct a lithium processing facility near the border of Kaduna and Niger states. Koma Technology is investing US$200 million in another lithium processing plant in Nasarawa State, with output intended for the global electric vehicle battery supply chain.

The investments align with Nigeria's policy of restricting raw mineral exports and encouraging domestic processing to capture greater economic value before exports.

China is already Nigeria's largest source of imports, supplying consumer goods, vehicles, electronics and construction materials while maintaining significant involvement in the country's power, oil and gas, telecommunications and infrastructure sectors. Chinese companies also participate in offshore oil projects, power grid construction, telecommunications backbone networks, e-government systems and security infrastructure.

Oil Remains Nigeria's Economic Backbone as Dangote Refinery Reshapes Fuel Trade

Despite the government's mining ambitions, oil continues to dominate Nigeria's economy.

The Nigerian National Petroleum Company (NNPC) has set a target of increasing crude oil production by around 100,000 barrels per day to reach 1.8 million barrels per day. Companies including Oando and Heirs Energies are raising capital to launch new drilling programs aimed at expanding both production and long-term reserves.

Meanwhile, the 650,000-barrel-per-day Dangote Refinery has fundamentally transformed Nigeria's petroleum industry by ending decades of dependence on imported fuel.

The refinery now enables Nigeria to meet domestic fuel demand while generating export surpluses, easing pressure on the country's foreign exchange market and establishing Nigeria as a net exporter of refined petroleum products to markets across Africa and the Americas. Its production capacity has also reduced the country's exposure to disruptions in global fuel supply chains by supplying refined products to West, Central and East Africa as well as overseas markets.

Outlook

Nigeria's latest world-class mineral discovery, expanding Chinese investment, comprehensive mining reforms and the rise of the Dangote Refinery together reflect the country's effort to diversify economic growth beyond oil. While mining is positioned to become a major new source of national revenue, oil is expected to remain the foundation of Nigeria's economy in the near term. Whether mining ultimately becomes the country's second economic pillar will depend on the successful implementation of reforms and the pace of the global energy transition.