Nasarawa’s $2m Lithium Deal Raises Fresh Questions Over Chinese Firm’s Access to State Mineral Wealth

The Nasarawa State Government’s **$2 million supplementary agreement with Chinese-backed Diamond New Energy** to secure lithium feedstock for its processing plant has triggered fresh questions over the value of the deal, revenue sharing and the long-term benefits accruing to the state.

The agreement, signed at the Nasarawa State Governor’s Lodge in Abuja, is intended to guarantee Diamond New Energy continued access to lithium raw materials from a mining block controlled by the state government.

Governor **Abdullahi Sule**, who presided over the signing, said the arrangement would protect the interests of both parties, keep the refinery operational and safeguard jobs created by the project.

However, the agreement has also brought renewed attention to how Nigeria’s emerging lithium resources are being allocated to foreign-backed investors.

### **HOW MUCH WILL NASARAWA REALLY EARN?**

The Nasarawa State Investment Development Agency (NASIDA) said the agreement provides an immediate **$2 million financial benefit** to the state, alongside future revenue from mining and processing activities.

But details of the agreement, including the volume of lithium covered, duration of the arrangement, royalty structure and projected annual revenue to the state, have not been fully disclosed in the information released about the signing.

That has raised questions over whether the immediate $2 million payment adequately reflects the potential value of the mineral resources involved.

Key questions include:

* How much lithium will Diamond New Energy receive under the agreement?
* What royalties will Nasarawa earn from production?
* How long will the agreement remain in force?
* Was the mining block independently valued?
* Were alternative investors considered before the supplementary agreement was reached?

### **CHINESE INVESTOR’S COMMITMENT UNDER SCRUTINY**

Diamond New Energy representative **David Siong** said the company was committed to deepening mineral processing, creating employment and supporting local economic development.

But the scale of those commitments remains an important issue for scrutiny.

Will the company employ Nasarawa residents in skilled and managerial positions?

What technology-transfer obligations are contained in the agreement?

Will local businesses benefit from procurement and supply contracts?

And what penalties would apply if the company’s commitments are not fulfilled?

These questions are particularly important as Nigeria seeks to ensure that foreign investment in critical minerals translates into substantial domestic economic value.

### **STATE GOVERNMENT DEFENDS AGREEMENT**

Governor Sule said securing feedstock for the refinery was essential to maintaining its operations and protecting employment.

He also stressed that Nasarawa, as a mining-licence holder, has an economic interest in the activities of the company.

> “More importantly, the people you have employed will remain employed,” the governor said.

The administration argues that maintaining the refinery will help the state move beyond the extraction of raw minerals and participate in the higher-value processing segment of the lithium industry.

### **LITHIUM BOOM BRINGS NEW CHALLENGE**

Nasarawa has emerged as one of Nigeria’s major destinations for lithium investment, with the state hosting a large processing facility reportedly capable of handling **6,000 metric tonnes of material daily**.

The development is part of a wider national push to discourage the export of raw minerals and encourage local processing.

Lithium is increasingly important to global industries, particularly electric vehicles, battery storage and renewable-energy technologies.

That rising demand makes the terms under which Nigerian deposits are developed increasingly significant.

### **ENVIRONMENTAL AND COMMUNITY QUESTIONS**

Beyond revenue, the agreement raises questions about environmental protection and host-community benefits.

What safeguards are in place to protect farmland and water resources around the mining operations?

Who will be responsible for environmental rehabilitation after mining activities end?

What direct benefits will communities hosting the mining operations receive?

These issues could become increasingly important as mining activities expand across the state.

### **A TEST FOR NASARAWA**

The latest agreement could ultimately become an important test of whether Nasarawa can turn its lithium deposits into sustainable economic wealth rather than simply facilitating extraction by foreign-backed companies.

The state government has presented the agreement as a way to protect its interests, secure jobs and guarantee industrial activity.

The next challenge is ensuring that those promises translate into **transparent revenue, local employment, technology transfer, community development and measurable economic returns**.

For now, the biggest unanswered question remains:

### **Is the $2 million agreement the beginning of a lucrative lithium partnership for Nasarawa — or merely a small payment for access to a potentially far more valuable mineral resource?**