The Nigerian oil market faces a significant threat as the world increasingly shifts towards the battery and renewable energy markets.
The electrification efforts being undertaken by wealthy nations, such as the United Kingdom, France, and Norway, include plans to ban the sale of new internal-combustion cars in the next decade. This transition, coupled with the rapid growth of electric vehicle sales and the displacement of fossil-fuel power plants by wind turbines and solar panels, necessitates a surge in battery production and the minerals required for their manufacturing.
The International Energy Agency (IEA) projects that the world will need to produce 48 million metric tons of nickel annually by 2040 to meet decarbonization goals, almost 19 times the current output. Nickel is a crucial component of high-performance electric vehicle batteries, but its demand is already outstripping supply. Indonesia, which has been deforesting rainforests for nickel mining, currently accounts for 54% of global nickel production, and this figure is expected to rise to 85% by 2027. However, even with increased Indonesian production, it is unlikely to satisfy the growing global demand.
An alternative lies in the Clarion-Clipperton Zone (CCZ), an area of the Pacific Ocean seabed abundant in minerals like nickel, cobalt, manganese, and copper. Trillions of nodules, holding an estimated 340 million metric tons of nickel alone, are present in the CCZ. Companies have shown interest in mining these resources, and with an impending deadline, The Metals Company (TMC), sponsored by Nauru, plans to exploit a portion of the CCZ called NORI-D. TMC aims to use underwater robots to collect the nodules from the seabed and transport them to support ships on the surface.
As the world embraces battery and renewable energy markets, the demand for minerals like nickel will continue to rise. Nigeria’s reliance on oil may become increasingly precarious as the global focus shifts towards cleaner and more sustainable energy sources.