THE Group Executive Director of BUA Group, Kabiru Rabiu, says the firm is eyeing the production of lithium, a highly valuable commodity in the production of batteries.
Rabiu said this 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 pasta, flour and cement production, explained it was considering a move into crude oil refining and petrochemicals. He pointed out that several states were sitting on abandoned lithium deposits that can be converted into material gains.
He said, “We also want to go massively into mining. We acquired a company called PW Nigeria. PW Nigeria is a civil and mining company in which we are the majority owner and it does most of our mining. We will use that capacity to look at lithium. Lithium is something that is in huge demand because of electrical vehicle (EV) batteries.
“Some states in Nigeria are sitting on insanely abandoned deposits of lithium. We also plan to go into tin mining as well, in addition to phosphate. Nigeria’s fertiliser consumption is under 20 kilogramme per hectares, compared to China and India.”
Rabiu explained that Nigeria’s importation of fertiliser informed why the product was expensive. He stressed that in Sokoto, there are huge deposits of phosphate vital in fertilizer production. He also said that Nigeria was well-positioned to mine phosphate and process it into fertiliser that can be made affordable locally.
“We are also working on infrastructure. The presently signed executive order 007 allows companies to build for tax credit, and we are exploring that. We have 2,100 kilometres of road per hectare and we feel it should not be that way. We think it is very clever and it allows companies to build cheaper and faster,” he added.
He noted 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 what we do is import substitution, and we expand as we go along. Every day we roll out 200 trucks of cement but it takes days for people to get it. In Sokoto, we are sitting on 200 million tonnes of limestone that is easy to mine. Nigeria imports four billion worth of textile every year and we have five, six textile mills that serve 200m people. That is why we go into some of these areas,” he explained.
BUA disagrees, as Dangote eyes steel
In exploring the nature of steel, Rabiu stated that the reason why BUA was not interested in steel production was due to the capital intensive nature of the business. He acknowledged the importance of steel to any economy in the world, but noted that the project required huge infrastructure. He explained that for a 1.2m tonnes production capacity, a firm would need 250 megawatts of electricity, “which was a lot to demand.”
He said, “If you consider that Nigeria generates some 5,000 megawatts, you are looking at five per cent of your total national generation to operate just that plant. We don’t have a problem, putting a power plant to operate it, but power has to come from the grid due to the volatility in iron making. Even if we generate it, the distribution network would not be able to take it.”
He added that a lot of gas deposits and a good rail network would be needed to transport the steel infrastructure. He explained that the infrastructure for the gas did not exist, as he doubted the profitability of steel for the group.
Meanwhile, its close competitor, Dangote Group, has announced its plan to expand operations into the steel sector. It also announced it would soon stop going to the Central Bank of Nigeria to source foreign exchange for its operations. The firm recently complained that the imposition of sugar tax on companies could impact its production of sugar.
Meanwhile, the AFC, at the Summit, launched a $2 billion facility to aid bank-driven economic recovery in Nigeria and other African countries.