-
CENTRES
Progammes & Centres
Location
The Nigeria-South Africa minerals pact charts a new course for African-led industrialisation, regional integration, and strategic control over the continent’s natural resources
Image Source: Getty
In a landmark move poised to reshape the African mining landscape, Nigeria and South Africa have entered a mining cooperation agreement. The agreement, signed on April 17, 2025, in Abuja by Nigeria’s Minister of Solid Minerals Development, Dr Dele Alake, and South Africa’s Minister of Mineral Resources and Energy, Gwede Mantashe, aims to accelerate economic diversification and intra-African cooperation. This collaboration, which involves joint geological mapping using drones, mineral data sharing, and exploration of critical minerals like lithium and iron ore, may mark a significant departure from the continent’s traditional dependency on external actors and foreign investment as it prioritises the African labour force, markets, and technological development.
The agreement, signed on April 17, 2025, in Abuja by Nigeria’s Minister of Solid Minerals Development, Dr Dele Alake, and South Africa’s Minister of Mineral Resources and Energy, Gwede Mantashe, aims to accelerate economic diversification and intra-African cooperation.
Nigeria and South Africa represent Africa’s two largest economies. While South Africa has a long-standing reputation for employing advanced mining technologies and robust mineral policy frameworks, Nigeria possesses vast, underexplored mineral reserves scattered across its 36 states. However, Nigeria’s mining sector remains underdeveloped, contributing less than 1 percent to the country’s GDP一in stark contrast to South Africa, where the sector accounts for around 8 percent of GDP and sustains half a million livelihoods.
This disparity stems largely from decades of neglect, inadequate infrastructure, and over-reliance on petroleum. Despite being Africa’s largest oil producer, Nigeria remains economically vulnerable due to its dependence on crude oil. Oil revenues account for a staggering 90 percent of its export earnings and 70 percent of government revenue. Yet, the sector employs less than 1 percent of the national workforce.
Despite being Africa’s largest oil producer, Nigeria remains economically vulnerable due to its dependence on crude oil.
By entering this mineral partnership, Nigeria aims to reverse this imbalance, leveraging South Africa’s world-class mining expertise to unlock its dormant mineral wealth. The implications are profound一not only for Nigeria and South Africa, but for Africa’s broader pursuit of industrialisation, resource sovereignty, and sustainable development.
The partnership is conceptualised as a multi-phased strategy that includes geological mapping, joint exploration, and downstream value addition. With a deadline set for the end of 2026, geological agencies from both countries will collaborate on a comprehensive drone-based geological mapping project. This initiative aims to harmonise geological data, identify high-potential mining zones, and streamline exploration processes.
Initial exploration will commence in prioritised mineral-rich belts—beginning with pilot sites in Nassarawa (for lithium) and Kogi (for iron ore). Nigeria’s lithium reserves in Nassarawa, estimated at 150,000 tonnes, could supply up to 5 percent of global demand by 2030—a critical contribution to the burgeoning electric vehicle industry. In Kogi State, high-grade iron ore deposits, with iron content reaching 68 percent, are comparable to premium ores found in Brazil and Australia.
Following successful exploration, the partnership is expected to work on developing full-scale mining operations and localised processing facilities. Eventually, both countries aim to move up the value chain into refining and manufacturing, reducing dependence on raw exports and increasing domestic value addition.
Successful implementation of the accord has the potential to generate approximately 500,000 direct and indirect employment opportunities across the mining value chain, thereby contributing to an estimated 8 percent growth in Nigeria’s industrial and manufacturing sectors. Furthermore, it is projected to augment Nigeria’s GDP by an additional US$ 12 billion annually by 2030, representing a tenfold increase in the mining sector’s current contribution. Additionally, the establishment of domestic iron ore processing capabilities is expected to result in annual savings of approximately US$ 3 billion by significantly reducing the nation’s reliance on steel imports.
The partnership opens a strategic gateway into West Africa, providing South African firms with preferential access to Nigeria’s rich but largely untapped mineral reserves.
While Nigeria stands to gain much-needed technical expertise, investment, and infrastructure, South Africa also benefits in multiple ways. First, the partnership opens a strategic gateway into West Africa, providing South African firms with preferential access to Nigeria’s rich but largely untapped mineral reserves. Particularly valuable is Nigeria’s lithium, a mineral South Africa currently lacks.
Second, this collaboration creates export opportunities for South African mining equipment manufacturers and technology providers. By serving Nigeria’s growing mining sector, South African firms can expand their markets and build long-term trade relationships.
Beyond commercial gains, the partnership also allows South Africa to reinforce its leadership role in shaping Africa’s mineral development agenda—an increasingly critical issue as countries such as Burkina Faso, Mali, and Niger pivot away from former colonial powers in favour of more sovereign and nationally-controlled resource strategies.
The Nigeria–South Africa minerals pact reflects a broader transformation in how African countries approach resource management. In contrast to the traditional model where foreign corporations dominate extraction and profits flow out of the continent, this partnership emphasises African agency, mutual benefit, and regional integration.
Since they lack national or regional capacity, these countries are currently obliged to approach foreign companies一though they are doing so on renegotiated terms. If the Nigeria-South Africa partnership proves successful, it could set a new precedent for the continent.
This approach aligns with recent developments in West Africa, where countries such as Burkina Faso and Mali are asserting greater control over their natural resources. Burkina Faso, for example, has nationalised parts of its mining sector by expelling Western corporations, while Mali has entered a resource-for-security pact with Russia. Since they lack national or regional capacity, these countries are currently obliged to approach foreign companies一though they are doing so on renegotiated terms. If the Nigeria-South Africa partnership proves successful, it could set a new precedent for the continent.
By choosing regional collaboration over foreign dependence, Nigeria and South Africa are modelling a new path for Africa—one based on partnership, knowledge sharing, and continental self-reliance.
If successful, the Nigeria–South Africa partnership could also catalyse mineral-based industrialisation across the continent. Beyond extraction, the agreement strongly emphasises local processing and value addition. This focus is critical, as Africa has historically exported raw materials while importing refined goods, thus missing out on industrial and employment opportunities.
Processing raw minerals into usable industrial input could help African countries create jobs. Local beneficiation would also enhance their technological capabilities and enable countries to retain more economic value from their natural resources. Countries such as Namibia have developed a new ‘Minerals Policy’ prioritising local value addition and processing before export, particularly for strategic minerals like uranium.
It also aligns with the African Union’s Agenda 2063, which emphasises industrial development, infrastructure growth and economic integration as pillars of long-term prosperity.
By pooling strengths, sharing knowledge, and focusing on value creation, the partnership offers a powerful template for other African nations seeking to assert greater control over their mineral wealth.
The Nigeria–South Africa minerals pact is more than a bilateral agreement. It represents a strategic pivot toward African-led resource development. By pooling strengths, sharing knowledge, and focusing on value creation, the partnership offers a powerful template for other African nations seeking to assert greater control over their mineral wealth.
At a time when global demand for critical minerals is on the rise and geopolitical competition over resources intensifies, Africa’s ability to harness its wealth for its people is more important than ever. The Nigeria–South Africa alliance signals a step in the right direction that could redefine Africa’s economic trajectory for generations to come.
Samir Bhattacharya is an Associate Fellow at the Observer Research Foundation
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Samir Bhattacharya is an Associate Fellow at ORF where he works on geopolitics with particular reference to Africa in the changing global order. He has a ...
Read More +
PREV
