BUA Group Executive Director Kabiru Rabiu said the company is considering the production of lithium, a high-value commodity in battery production.
Rabiu said it in Abuja today May 12, 2022 on the sidelines of the African Finance Corporation (AFC) Live Infrastructure Solutions Summit.
The BUA boss, who acknowledged the company’s growth in the production of pasta, flour and cement, said it plans to move into crude oil refining and petrochemicals. He pointed out that several states are sitting on abandoned lithium deposits that can be turned into material gains.
Three dead in the explosion of a BUA cement factory in Sokoto
Dangote Cement Avoids Mining Law and Contaminates Water in Yewa Communities
Ajaokuta Steel is in a coma over international politics, says former presidential adviser
– Advertisement –
Investigation: How Illegal Gold Miners Make Billions in Revenue from FCT
He said: “We also want to get into mining massively. We acquired a company called PW Nigeria. PW Nigeria is a civil and mining company of which we are the majority owner and which carries out the majority of our mining. We will use this ability to examine lithium. Lithium is something that is in high demand due to electric vehicle (EV) batteries.
“Some states in Nigeria are sitting on incredibly abandoned lithium deposits. We also plan to get into tin mining, in addition to phosphate. Fertilizer consumption in Nigeria is less than 20 kilograms per hectare, compared to China and India.
Rabiu explained that Nigeria’s importation of fertilizer explains why the product is expensive. He pointed out that in Sokoto there are huge phosphate deposits vital for the production of fertilizers. He also said Nigeria is well positioned to mine phosphate and turn it into fertilizer that can be made affordable locally.
“We are also working on infrastructure. The currently signed Executive Order 007 allows businesses to build for the tax credit, and we are exploring that. We have 2,100 kilometers of road per hectare and we believe that should not be so. We think it’s very smart and it allows companies to build cheaper and faster,” he added.
He noted that BUA was diversifying because Nigeria produces so little for a population of 200 million people.
“We are an import-dependent country and it is very expensive to import products into Nigeria. Most of our business is import substitution, and we are growing as we go. Every day we deploy 200 cement trucks, but it takes days for people to get access. In Sokoto, we sit on 200 million tons of easily quarried limestone. Nigeria imports four billion dollars worth of textiles every year and we have five or six textile factories serving 200 million people. That’s why we go into some of these areas,” he explained.
– Advertisement –
BUA disagrees, as Dangote eyes steel
Exploring the nature of steel, Rabiu said the reason BUA was not interested in steel production was due to the capital intensive nature of the business. He recognized the importance of steel to any economy in the world, but noted that the project required huge infrastructure. He explained that for a production capacity of 1.2 million tons, a company would need 250 megawatts of electricity, “which was a lot to ask”.
He said: “If you consider that Nigeria generates some 5,000 megawatts, you are looking at 5% of your total national generation to operate this plant alone. We have no problem installing a power plant to operate it, but the electricity has to come from the grid due to the volatility of iron making. Even if we produced it, the distribution network couldn’t take it.
He added that many gas fields and a good railway network would be needed to transport the steel infrastructure. He explained that the infrastructure for gas did not exist, as he doubted the profitability of steel for the group.
Meanwhile, its close competitor, Dangote Group, has announced plans to extend its activities to the steel sector. He also announced that he would soon stop going to the Central Bank of Nigeria to source foreign currency for his operations. The company recently complained that imposing a corporate sugar tax could impact its sugar production.
Meanwhile, the AFC at the summit launched a $2 billion facility to help banks eeconomic recovery in nigeria and other African countries.