FG, Africa Finance Corporation Seal $1.3 Billion Alumina Refinery Deal to Boost Nigeria’s Mining Sector
The Federal Government, through the Solid Minerals Development Fund (SMDF), signs a landmark $1.3 billion Memorandum of Understanding with the Africa Finance Corporation (AFC) to finance a major alumina refinery project, nationwide geoscience mapping, and a strategic mining investment vehicle aimed at accelerating sector growth.
Mediaplusng.com reports that the agreement represents the climax of high-level discussions between AFC and SMDF to jointly fund the construction of a world-class alumina refinery expected to process approximately one million tonnes of bauxite ore annually. The refinery is designed to operate using a modern Bayer-process flowsheet supported by an on-site gas-fired cogeneration plant for steam and power generation.
Speaking at the signing ceremony, the Minister of Solid Minerals Development, Dele Alake, describes the agreement as a transformative milestone for Nigeria’s mining industry. He states that the deal aligns with the Federal Government’s agenda to diversify the economy, increase mining’s contribution to Gross Domestic Product (GDP), and attract significant Foreign Direct Investment (FDI).
Mediaplusng.com gathers that the facility is projected to operate for approximately 20 years at about 95 percent utilisation, with an estimated total alumina output of 19 million tonnes over the project lifecycle. The initiative is expected to become Nigeria’s largest mining-sector private investment and a flagship industrial project in West Africa.
According to projections shared at the ceremony, the project could contribute an estimated $1.2 billion annually to Nigeria’s GDP and generate over $25 billion in economic value throughout its lifespan. In addition, it is expected to deliver approximately $8 billion in foreign exchange earnings, strengthening Nigeria’s external reserves and industrial capacity.
Mediaplusng.com understands that the Executive Secretary of SMDF, Hajiya Fatima Shinkafi, describes the agreement as the agency’s largest funding milestone since inception. She notes that the $1.3 billion capital expenditure underscores SMDF’s institutional maturity and its ability to partner with global financiers to implement large-scale value-addition projects in the mining sector.
Initial feasibility studies conducted by AFC and SMDF confirm the commercial viability and competitiveness of the alumina refinery project. Officials explain that the initiative supports the Ministry’s broader strategy of generating reliable geological data, de-risking exploration, and positioning Nigeria as a globally competitive minerals destination.
As part of the agreement, AFC and SMDF also commit to establishing a joint strategic investment vehicle to fast-track the exploration and development of identified mineral assets nationwide. The vehicle is expected to drive rapid exploration campaigns and facilitate production from selected exploration leases once viability is established.
The Permanent Secretary of the Ministry, Engr Farouk Yabo, commends the initiative, stating that it reflects reform-driven leadership within the sector. He emphasizes the commitment of the ministry’s bureaucracy to ensure seamless implementation and regulatory support for the project and other reform initiatives aimed at modernizing Nigeria’s mining ecosystem.
Minister Alake reiterates that the Federal Government has granted all necessary approvals to fast-track the AFC–SMDF partnership. He directs relevant agencies under the ministry to expedite the processing of permits, titles, and regulatory clearances to guarantee timely execution.
The signing ceremony is witnessed by senior officials, including AFC President and CEO Samaila Zubairu. Hajiya Fatima Shinkafi signs on behalf of the Federal Government, while Franklin Edochie, Deputy Director and Head of Metals & Mining at AFC, signs on behalf of the corporation.
The landmark agreement signals renewed investor confidence in Nigeria’s solid minerals sector and underscores the government’s determination to unlock the country’s vast mineral resources. With structured financing, regulatory reforms, and strategic partnerships, Nigeria positions itself for a new era of industrial-scale mining and sustainable economic growth.
