The Nigerian government has signed a landmark $1.3 billion Memorandum of Understanding (MoU) with the African Finance Corporation (AFC) to co-finance a major alumina refining project, alongside the establishment of a comprehensive national geoscience mapping program and a strategic investment vehicle to foster growth in the mining sector.
The agreement, signed through the Solid Minerals Development Fund (SMDF), is the culmination of extensive discussions between AFC and SMDF to finance the construction of a $1.3 billion alumina refinery.
The facility will process up to 1 million tonnes of bauxite ore per year, Segun Tomori, special media assistant to the Minister of Solid Minerals Development, said in a statement.
Tomori said the project will implement the latest Bayer process flowsheet and will be supported by an on-site gas-fired cogeneration plant that will provide steam and power generation.
Speaking at the signing ceremony, the Minister of Solid Minerals Development, Dele Arake, described the agreement as a transformational milestone for the Nigerian mining industry, noting that it would significantly increase the sector’s contribution to the gross domestic product (GDP).
The minister further emphasized that the agreement is in line with the ministry’s reform agenda, saying it strengthens the investment environment, modernizes regulatory processes and establishes a transparent, world-class mineral licensing system that draws reliable private capital into the sector.
The Minister reiterated the Federal Government’s determination to accelerate the development of the mining sector and confirmed that all necessary approvals have been granted to fast-track the AFC-SMDF investment program. He directed relevant agencies under the ministry to process permits, titles and regulatory approvals in a timely manner and ensure smooth implementation.
The refinery is designed to operate for approximately 20 years at 95% utilization, with total alumina production expected to be approximately 19 million tonnes over the life of the project.
SMDF Director-General Fatima Shinkafi hailed the agreement as the agency’s largest funding initiative since its inception.
He said the $1.3 billion capital expenditure (CAPEX) was an unprecedented achievement, highlighting SMDF’s growing ability to facilitate large-scale investments in line with the ministry’s value-added policy.
According to Segun Tomori, Special Assistant on Media to the Minister of Solid Minerals Development, the project is set to be Nigeria’s largest private mining investment and a landmark foreign direct investment.
“It is expected to contribute an estimated $1.2 billion annually to GDP, generate more than $25 billion to the national economy over its lifecycle, and generate foreign exchange earnings of approximately $8 billion.
“The initial feasibility study conducted by AFC and SMDF confirmed the competitiveness and commercial viability of the project, reinforcing the Department’s strategy to position Nigeria as a globally competitive mineral resource destination.
“Beyond the refinery, this partnership will support national geoscience mapping efforts aimed at generating critical mineral data, de-risking exploration activities and attracting foreign investors. The parties also agreed to establish a joint strategic investment vehicle to accelerate exploration, development and production across selected mining assets in Nigeria.”
Undersecretary of the Ministry of Engineering. Farooq Yarbo praised the initiative, saying it was evidence of the ministry’s reform-driven transformation.
He reaffirmed the commitment of the ministry’s bureaucracy to provide the necessary institutional support for the seamless implementation of the project.
Mr. Shinkafi signed on behalf of the Federal Government, while AFC Deputy Director-General and Head of Metals and Mining, Mr. Franklin Edochie, signed on behalf of the Corporation. AFC Chairman and CEO Samaira Zubair also attended the ceremony, along with government officials.
