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The federal government and Africa Finance Corporation (AFC) have signed a key $1.3 billion agreement to develop an alumina refinery project expected to transform Nigeria’s mining landscape and deepen value addition in the sector. The deal was sealed through the Solid Minerals Development Fund (SMDF), alongside plans to advance geoscience mapping and establish a strategic investment vehicle to unlock exploration assets nationwide.
Speaking at the signing ceremony, Minister of Solid Minerals Development, Dele Alake, described the agreement as a major milestone for Nigeria’s industrial and economic diversification agenda, stating that it would strengthen the mining sector’s contribution to Gross Domestic Product. “This is a landmark deal that will transform the sector and increase its contribution to our national economy,” Alake said.
The refinery project is designed to process about 1 million tonnes of bauxite ore annually using a modern Bayer-process technology, supported by an on-site gas-fired cogeneration plant to supply steam and power. The facility is projected to operate for about 20 years at 95 percent capacity utilisation, producing an estimated 19 million tonnes of alumina over its lifespan. SMDF Executive Secretary, Hajiya Fatima Shinkafi, described the agreement as a historic achievement for the agency. “We are very proud and honoured to facilitate this phenomenal milestone. It is a $1.3 billion CAPEX project. SMDF has come of age to sit here and sign this deal with AFC. I thank AFC for collaborating with us to boost the value addition policy of my boss, Dele Alake,” she said.
The project is projected to become Nigeria’s largest mining-sector private investment, contributing about $1.2 billion annually to GDP and more than $25 billion to the economy over its lifecycle, while generating about $8 billion in foreign exchange earnings. Feasibility studies conducted by AFC and SMDF confirmed the project’s commercial viability and global competitiveness.
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Permanent Secretary of the Ministry, Farouk Yabo, said the initiative reflects the ministry’s reform-driven leadership, adding that it could place Nigeria prominently on the global minerals investment map. He pledged bureaucratic support to ensure smooth implementation of the project and other sectoral reforms.
Alake also highlighted that the investment aligns with the ministry’s reform agenda aimed at generating reliable mineral data, reducing exploration risks for foreign investors, and improving Nigeria’s global mining competitiveness. He said the government has granted all necessary approvals to fast-track the project, directing relevant agencies to expedite permits, titles, and regulatory clearances.
Under the agreement, AFC and SMDF will establish a joint investment vehicle to accelerate exploration, development, and production activities across selected mineral assets in Nigeria. The partnership is expected to deepen private sector participation in the mining sector while accelerating industrialisation and export earnings.
The signing ceremony was witnessed by senior government and AFC officials, with SMDF represented by Hajiya Fatima Shinkafi and AFC represented by Franklin Edochie, Deputy Director and Head of Metals and Mining, while AFC President and CEO Samaila Zubairu also attended.
