The Nigerian Government has signed a landmark $1.3 billion Memorandum of Understanding (MoU) with the Africa Finance Corporation (AFC) to jointly finance a major alumina refinery project, alongside a comprehensive national geoscience mapping programme and the establishment of a strategic investment vehicle to drive mining sector growth.
The agreement, executed through the Solid Minerals Development Fund (SMDF), marks the culmination of extensive discussions between AFC and SMDF to fund the construction of a $1.3 billion alumina refinery.
According to the Special Assistant on Media to the Minister of Solid Minerals Development, Mr. Segun Tomori, who disclosed this in a statement, the facility is expected to process up to one million tonnes of bauxite ore annually.
Mr. Tomori noted that the project will deploy a modern Bayer process flowsheet and be supported by an on-site gas-fired cogeneration plant to provide steam and power generation.
Speaking at the signing ceremony, Minister of Solid Minerals Development, Dele Alake, described the deal as a transformative milestone for Nigeria’s mining industry, noting that it would significantly boost the sector’s contribution to the nation’s Gross Domestic Product (GDP).
The Minister further emphasised that the deal aligns with the Ministry’s reform agenda, which he said has strengthened the investment climate, modernised regulatory processes, and established a transparent, world-class mineral licensing regime that is drawing credible private sector capital into the sector.
Reiterating the Federal Government’s resolve to accelerate mining sector development, the Minister confirmed that all necessary approvals have been granted to fast-track the AFC–SMDF investment programme. He directed relevant agencies under the Ministry to ensure timely processing of permits, titles, and regulatory clearances to guarantee smooth implementation.
Designed for an operational lifespan of approximately 20 years at 95 per cent utilisation, the refinery is expected to deliver a total alumina output of about 19 million tonnes over the project’s duration.
The Executive Secretary of SMDF, Fatima Shinkafi, hailed the agreement as the agency’s largest funding initiative since its inception.
She described the $1.3 billion capital expenditure (CAPEX) as an unprecedented achievement, underscoring SMDF’s growing capacity to facilitate large-scale investments in alignment with the Ministry’s value-addition policy.
According to the Special Assistant on Media to the Minister of Solid Minerals Development, Mr. Segun Tomori, the project is poised to become Nigeria’s largest private-sector mining investment and a landmark foreign direct investment.
“It is expected to contribute an estimated $1.2 billion annually to GDP, generate over $25 billion for the national economy across its lifecycle, and deliver approximately $8 billion in foreign exchange earnings.
“Initial feasibility studies conducted by AFC and SMDF have confirmed the project’s competitiveness and commercial viability, reinforcing the Ministry’s strategy to position Nigeria as a globally competitive minerals destination.
“Beyond the refinery, the partnership will support a nationwide geoscience mapping exercise aimed at generating critical mineral data, de-risking exploration activities, and attracting international investors. Both parties also agreed to establish a joint strategic investment vehicle to fast-track exploration, development, and production across selected mining assets in Nigeria.”
Permanent Secretary of the Ministry, Engr. Farouk Yabo, commended the initiative, describing it as evidence of the Ministry’s reform-driven transformation.
He reaffirmed the commitment of the Ministry’s bureaucracy to provide the necessary institutional support for the seamless execution of the project.
While Shinkafi signed on behalf of the Federal Government, Franklin Edochie, Deputy Director and Head of Metals & Mining at AFC, signed on behalf of the Corporation. The ceremony was witnessed by AFC President/CEO, Samaila Zubairu, alongside senior government officials.