The Federal Government has signed a landmark $1.3 billion foreign direct investment (FDI) agreement with the Africa Finance Corporation (AFC) to develop a major alumina refinery project aimed at transforming Nigeria’s mining sector.
The Memorandum of Understanding (MoU), executed in Abuja, will see the project implemented through the Solid Minerals Development Fund (SMDF). The initiative includes comprehensive geoscience mapping and the creation of a joint strategic investment vehicle to accelerate mineral exploration.
Minister of Solid Minerals Development, Dele Alake, described the agreement as a historic milestone poised to reposition the mining industry and boost its contribution to Nigeria’s Gross Domestic Product (GDP).
“This is a landmark deal,” Alake said, noting that the investment aligns with the reform priorities of President Bola Ahmed Tinubu’s administration.
He credited ongoing sector reforms for improving regulatory clarity, strengthening mineral licensing processes, and creating a secure investment climate that is attracting serious private capital.
To fast-track implementation, the minister announced that all necessary approvals have been granted and directed relevant agencies to expedite permits, titles, and regulatory clearances.
The $1.3 billion capital expenditure (CAPEX) project involves the construction of an alumina refinery expected to process approximately one million tonnes of bauxite ore annually using a modern Bayer-process flowsheet. The facility will include an on-site gas-fired cogeneration plant to provide steam and power.
Designed to operate for about 20 years at 95 per cent utilisation, the refinery is projected to produce 19 million tonnes of alumina over its lifecycle.
According to feasibility studies conducted by AFC and SMDF, the project is commercially viable and globally competitive. It is expected to contribute $1.2 billion annually to Nigeria’s GDP, generate more than $25 billion for the national economy over its lifespan, and deliver $8 billion in foreign exchange earnings.
Beyond the refinery, AFC and SMDF agreed to establish a joint investment vehicle to accelerate exploration and development of selected mineral assets across the country. The initiative aims to de-risk exploration, generate reliable geological data, and unlock Nigeria’s vast mineral potential.
SMDF Executive Secretary, Hajiya Fatima Shinkafi, described the deal as the agency’s largest funding project since inception.
“We are very proud and honoured to facilitate this phenomenal milestone. SMDF has come of age to sit here and sign this deal with AFC,” she said, thanking the corporation for supporting the ministry’s value-addition agenda.
AFC President and CEO, Samaila Zubairu, witnessed the signing alongside Alake and senior officials of the ministry.
Permanent Secretary Faruk Yusuf Yabo said the initiative underscores the ministry’s reform drive and has the potential to position Nigeria prominently on the global mining map.
The agreement is being hailed as Nigeria’s largest private-sector investment in the mining industry and a significant step toward diversifying the economy beyond oil.
