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The Federal Government, through the Solid Minerals Development Fund (SMDF), has signed a landmark $1.3 billion Memorandum of Understanding with the African Finance Corporation (AFC) to jointly fund large-scale alumina refining projects, a national geoscience mapping program and establish a strategic investment vehicle to tap Nigeria’s mineral resources.
The agreement is the culmination of extensive negotiations between AFC and SMDF and focuses on the construction of a $1.3 billion alumina refinery that is expected to process 1 million tonnes of bauxite ore per year.
The facility implements the latest Bayer process flowsheet and features an on-site gas-fired cogeneration plant providing steam and electricity.
Speaking at the signing ceremony on Sunday, March 1, 2026, the Minister of Solid Minerals Development, Dr. Dele Arake, said the agreement is a transformational milestone set to reposition the mining sector and significantly increase its contribution to Nigeria’s gross domestic product.
The refinery is designed for a 20-year operating life at 95% utilization and is expected to produce approximately 19 million tonnes of alumina over its lifecycle.
SMDF Director-General Fatima Shinkafi hailed the agreement as the agency’s largest funding commitment since its inception.
He said the $1.3 billion capital expenditure is unprecedented and evidence of SMDF’s growing ability to drive large-scale investments in line with the Department’s value-add agenda.
The project is expected to be the largest private investment in Nigeria’s mining sector and a major influx of foreign direct investment, contributing $1.2 billion annually to GDP, injecting more than $25 billion into the economy over its lifecycle and generating an estimated $8 billion in foreign exchange earnings.
The initial feasibility study conducted by AFC and SMDF confirmed the commercial viability and global competitiveness of the project, reinforcing the Department’s strategy to position Nigeria as a leading destination for mineral investment.
Beyond refineries, the two agencies have agreed to establish a joint strategic investment vehicle aimed at accelerating the exploration and development of identified mineral assets across the country.
This initiative is expected to expedite exploration campaigns, de-risk investments and enable production across selected mining leases.
Undersecretary of the Ministry of Engineering. Farooq Yarbo praised the development, saying it was evidence of reform-driven leadership and reiterated the Ministry’s commitment to ensuring seamless regulatory support for the implementation of the project.
AFC President and CEO, Samaira Zubair, witnessed the signing along with AFC Deputy Director General and Head of Metals and Mining, Franklin Edochie, who signed on behalf of the corporation.
Mr. Arak reaffirmed the Federal Government’s determination to accelerate the growth of the mining sector and confirmed that all necessary approvals have been obtained to fast-track the partnership.
He directed relevant agencies under the ministry to process permits, titles and regulatory approvals in a timely manner and ensure smooth implementation.
The agreement underlines the Federal Government’s commitment to deepen reforms, strengthen the regulatory framework and attract sustainable private capital to Nigeria’s solid minerals sector.
