Honorable Minister of Solid Minerals Development Dele Arake (centre, standing) and other officials attending the FCT signing ceremony in Abuja
*The Federal Government has entered into a mining investment agreement with Africa Finance Corporation for a $1.3 billion alumina smelter project, designed to operate at 95 per cent capacity utilization for approximately 20 years, with total alumina production in Nigeria expected to be 19 million tonnes over its lifetime.
Gbenga Kayode | Consumer Connect
In line with the country’s efforts to promote exploration and development across the solid minerals sector, the Federal Government has entered into a mining investment agreement with the African Finance Corporation (AFC).
ConsumerConnect reports that the co-investment agreement is aimed at funding three major mining projects in Nigeria, including a $1.3 billion alumina refining project.
Alumina is a compound extracted from bauxite. It is made up of two elements: oxygen and aluminum.
The agreement between AFC and the Nigeria Solid Minerals Development Fund (SMDF), which represents the Nigerian government, includes a comprehensive geoscience mapping exercise and the establishment of a joint strategic investment vehicle to drive exploration and development across the sector.
Segun Tomori, Special Assistant to the Minister of Solid Minerals Development on Media, confirmed in a statement over the weekend that the refinery will utilize the latest Bayer Process flowsheet and install a gas-fired cogeneration plant on site for steam and power generation.
The statement said the agreement is the result of discussions between the two organizations to co-finance the construction of a $1.3 billion alumina refinery that is expected to process approximately 1 million tons of bauxite ore per year.
“The facility is designed to operate at 95 percent utilization for approximately 20 years, and total alumina production over its lifetime is projected to be 19 million tons,” the statement said.
In his remarks at the MoU signing ceremony, the Honorable Minister of Solid Minerals Development (MSMD), Dr. Dele Arake, said the deal was a landmark deal that would transform the mining sector of the economy.
The statement further noted that output from the refinery project is expected to increase its contribution to the West African country’s gross domestic product (GDP).
Mr. Arak also asserted that the transaction is in line with the Ministry of Solid Minerals’ reform agenda.
The Minister also revealed that efforts to modernize the necessary regulatory framework and strengthen the mineral licensing system are beginning to attract significant private capital into the industry.
Underscoring the federal government’s commitment to expediting the investment, Mr. Arak said all necessary approvals have been obtained to accelerate implementation of the agreement.
He therefore directed relevant agencies under the ministry to ensure seamless processing of permits, titles and regulatory approvals.
SMDF Director-General Fatima Shinkafi also spoke at the event, calling the deal the agency’s largest fundraising project since its inception.
Shinkafi said: “We are extremely proud and honored to facilitate this incredible milestone, which is unprecedented since SMDF’s inception.
“This is a $1.3 billion capital investment. SMDF is old enough to sit here and sign this contract with AFC.
“I would like to thank the AFC for working with me to advance my boss, Mr. Dele Arake’s value-added policy.”
Commenting on the development, the Permanent Secretary in the Ministry of Solid Minerals Development, Mr. Farouk Yabo, said the refinery project has the potential to place Nigeria more prominently on the world mining map.
MSMD: Project contributing $1.2 billion to Nigeria’s GDP
Regarding the project’s contribution to the economy, the Ministry of Solid Minerals said the project is expected to be the country’s largest private investment in the mining sector.
“It will contribute approximately $1.2 billion annually to the GDP, inject more than $25 billion over the lifecycle of the national economy and generate $8 billion in foreign exchange revenue,” the ministry said.
The ministry said the initial feasibility study conducted by AFC and SMDF confirmed the competitiveness and commercial viability of the project, reinforcing efforts to position Nigeria as a globally competitive mineral destination.
“As part of the agreement, both parties will undertake comprehensive geoscience mapping work aimed at generating mineral data, reducing exploration risks for investors, and maximizing the potential of the field,” the statement said.
“AFC and SMDF have also agreed to establish a joint strategic investment vehicle to accelerate the development of identified exploration assets across Nigeria and drive rapid exploration, development and production of selected exploration leases following successful exploration campaigns.”
Tomori said Shinkafi signed the contract on behalf of the federal government, while AFC Deputy Director-General and Head of Metals and Mining, Franklin Edochie, signed on behalf of the companies.
According to the ministry, AFC President and CEO Samaira Zubair witnessed the ceremony along with the minister.
