The Federal Government and the African Finance Corporation have signed a landmark Memorandum of Understanding to jointly fund three strategic projects in Nigeria’s mining sector.
These projects include a $1.3 billion alumina refinery, a nationwide geoscience mapping initiative, and a special investment vehicle designed to unlock the country’s mineral potential.
The agreement was signed in Abuja and marks the culmination of months of negotiations, reflecting increasing investor confidence in the sector’s ongoing reforms.
According to a statement from Segun Tomori, Special Assistant on Media to the Minister of Solid Minerals Development, the alumina refinery is designed to process approximately one million tonnes of bauxite annually using a modern Bayer-process flowsheet, supported by an on-site gas-fired cogeneration plant to generate steam and electricity.
“The Africa Finance Corporation and the Federal Government through the Solid Minerals Development Fund (SMDF) have signed a Memorandum of Understanding to jointly fund three projects: a $1.3 billion alumina project, a comprehensive geoscience mapping exercise, and an investment vehicle to realise the goals,” the statement read. “This MOU is the climax of talks to jointly fund the construction of a $1.3 billion alumina refinery, estimated to generate 1 million tonnes of bauxite ore per annum, utilising a modern Bayer-process flowsheet with an on-site gas-fired cogeneration plant for steam and power.”
Speaking at the signing ceremony, Minister of Solid Minerals Development, Dele Alake, described the deal as a transformative milestone for the sector, poised to create jobs, increase local value addition, and boost Nigeria’s Gross Domestic Product.
“This is a landmark deal, poised to transform the mining sector and increase its contribution to the nation’s GDP,” he said.
The refinery is expected to operate for about 20 years at 95 per cent utilisation, producing a projected total of 19 million tonnes of alumina over its lifespan.
Projections indicate an annual GDP contribution of $1.2 billion, over $25 billion in economic value across the project lifecycle, and $8 billion in foreign exchange earnings.
Executive Secretary of SMDF, Fatima Shinkafi, described the agreement as the largest project the fund has undertaken since its establishment.
“We are very proud and honoured to facilitate this phenomenal milestone. It is a $1.3 billion capital expenditure project, and SMDF has come of age to sign this deal with AFC,” she said.
Beyond the refinery, the partners agreed to conduct a nationwide geoscience mapping exercise to provide reliable data on Nigeria’s mineral resources, addressing a key barrier where lack of credible geological information has hindered large-scale investments.
A joint strategic investment vehicle was also established to accelerate exploration and development of mining assets once exploration campaigns are complete.
Alake emphasised the government’s commitment to fast-tracking all necessary approvals for the investments, directing relevant agencies to ensure seamless permit and regulatory processes.
“We are determined to ensure that investors do not face unnecessary delays. The era of bottlenecks is over,” he said.
Permanent Secretary of the ministry, Farouk Yabo, described the agreement as a reflection of the sector’s ongoing reforms and its potential to place Nigeria prominently on the global mining map.
The signing ceremony was witnessed by AFC President and CEO, Samaila Zubairu, alongside senior government officials, while Franklin Edochie, Deputy Director and Head of Metals and Mining at AFC, signed on behalf of the corporation.
The partnership represents a critical step toward diversifying Nigeria’s economy away from crude oil, harnessing the country’s rich deposits of bauxite, lithium, gold, iron ore, and rare earth minerals, and demonstrating the potential of private-sector collaboration to transform the mining landscape.
