The African Finance Corporation and the Federal Government, acting through the Solid Minerals Development Fund, have signed an investment agreement to co-finance three key projects: a $1.3 billion alumina refinery, a nationwide geoscience mapping programme, and a dedicated investment vehicle aimed at unlocking Nigeria’s mineral resources.
The agreement, signed in Abuja, concludes months of negotiations between the parties and reflects rising investor confidence in reforms within Nigeria’s mining sector.
According to a statement issued on Sunday by the Special Assistant on Media to the Minister of Solid Minerals Development, Segun Tomori, the proposed alumina refinery will process about one million tonnes of bauxite annually using a modern Bayer process flowsheet, with an on-site gas-fired cogeneration plant providing steam and power.
The statement read, “The Africa Finance Corporation and the Federal Government, through the Solid Minerals Development Fund, have signed an investment agreement to jointly fund three projects: a $1.3bn alumina project, a comprehensive geoscience mapping exercise, and an investment vehicle to realise the goals.
“The MOU is the climax of talks between AFC and SMDF to jointly fund the construction of a $1.3bn 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, the Minister of Solid Minerals Development, Dele Alake, described the agreement as a landmark deal that will boost value addition, generate employment, and significantly expand the sector’s contribution to Nigeria’s Gross Domestic Product.
“This is a landmark deal, poised to transform the mining sector and increase its contribution to the nation’s Gross Domestic Product,” Alake said.
The facility is expected to operate for about 20 years at 95 per cent capacity utilisation, with total alumina production projected at 19 million tonnes over its lifespan.
Government estimates show the project could add about $1.2 billion annually to GDP, generate more than $25 billion in economic value over its lifecycle, and yield roughly $8 billion in foreign exchange earnings.
Officials said feasibility studies carried out by both AFC and SMDF affirmed the project’s commercial viability and its competitiveness in the global market.
“Expected to be Nigeria’s largest mining-sector private investment and a landmark foreign direct investment, the project will contribute $1.2bn to GDP annually, over $25bn to the national economy across its lifecycle, and generate $8bn in foreign exchange earnings. Initial feasibility studies conducted by AFC and SMDF have confirmed the project’s competitiveness and commercial viability, validating the Ministry’s efforts to position Nigeria as a globally competitive minerals destination.
“This initiative delivers on the Ministry’s priority of generating big data on specific minerals, de-risking exploration for international investors, and unlocking the full potential of Nigeria’s minerals.”
The Executive Secretary of SMDF, Hajia Fatima Shinkafi, described the agreement as the largest project the fund has embarked on since its establishment.
“We are very proud and honoured to facilitate this phenomenal milestone, which is quite unprecedented since the inception of SMDF. It is a $1.3bn capital expenditure project,” Shinkafi said. “SMDF has come of age to be able 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.”
