Nigeria will pay 70% of the drill bill to pull junior miners into its battery-mineral pitch

Nigeria's Solid Minerals Development Fund, a government agency, will issue grants covering up to 70% of the cost of exploration projects run by mining licence holders in the country ^[1]. That is a priceable subsidy rather than a memorandum: on the fund's terms, a junior explorer carries the remaining 30% of a drill programme ^[2].

The targeting is explicit. "We're looking for junior mining companies at this stage," Fatima Umaru Shinkafi, the fund's Executive Secretary and CEO, told Semafor. "We're not at the same place as the oil and gas sector where the Chevrons and Shells can come in." ^[3] Government officials describe the aim as identifying untapped reserves of more than 44 minerals across 500 locations, with emphasis on lithium, nickel, cobalt and rare earths used in batteries and digital infrastructure, plus funding research into processing technologies ^[4].

The baseline explains the urgency. Oil accounts for 95% of Nigeria's foreign exchange earnings while solid minerals have long accounted for barely 1% of the economy ^[5]. Mining revenues doubled last year, but the Tinubu administration remains short of a 3% target for minerals' contribution to GDP that was set six years ago ^[6], which implies roughly tripling the sector's share of output ^[7].

On terms, Shinkafi argues that tax holidays, full repatriation of earnings and no insistence on state part-ownership make Nigeria's mining law investor-friendly: "We're not nationalistic in the way of saying we must own part of what you're doing." ^[8] The grants are the exception. For ventures it funds, the government may take a stake, structured so other investors can buy it out later, she said ^[9]. The fund has received "hundreds of applications" since floating the grants in June and is appraising multiple projects, according to Shinkafi ^[10].

What is not reported is the size of the pot. Semafor's account gives no total budget for the grant programme and no per-project cap ^[11], so the 70% figure sets a ratio without setting a ceiling. The adjacent number that does exist is the alumina refinery planned with Africa Finance Corporation, the Lagos-headquartered multilateral lender working to de-risk mining projects and crowd in private capital, which Shinkafi says would add $1.2 billion a year to the economy once operating and is moving toward a final investment decision next year ^[12].

Measured against continental deal flow, Nigeria is starting from behind. Zimbabwe's lithium reserves have attracted more than $2 billion in Chinese investment since 2021 ^[13]. US-backed Orion CMC, which agreed to acquire Glencore's DR Congo assets worth $9 billion, plans a $940 million Tanzanian project producing nickel concentrate, copper and cobalt ^[14]. Zimbabwe's Mutapa Resources raised $300 million for a mine and processing facility, and Kenya recently found a rare earths stockpile ^[15]. Nigeria's own milestones this year are a $250 million Chinese-built lithium processing plant opened in Nasarawa state in July, a month after the government announced new copper, lithium and rare earths discoveries ^[16], against a claimed $700 billion-plus valuation of untapped deposits ^[17].

Watch three things: whether the appraisal pipeline converts into awarded grants and reported drill metres; whether the alumina refinery reaches a final investment decision next year as forecast ^[12]; and whether coordination holds, since the Brookings Institution has argued that without strong coordination across government agencies the full potential of African mining cannot be achieved ^[18].