The African Finance Corporation and the Federal Government of Nigeria have signed agreements to invest in three major mining projects. One of those is $1.3 billion for an aluminum smelter project. The agreement was signed under the Solid Minerals Development Fund (SMDF), a sovereign wealth fund aimed at promoting private sector-based growth in the mining industry.
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Under the agreement, the parties will implement a geoscience mapping program to improve mineral data, reduce exploration risks, and encourage more investors to join the sector. The companies will also create a joint investment vehicle to accelerate exploration and mine development in Nigeria. The aim is to facilitate faster exploration, development and eventual production from approved mining leases, especially after successful exploration campaigns.
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Segun Tomori, media aide to the Minister of Solid Minerals Development, said the refinery will use the Bayer process, a widely applied method for refining alumina from bauxite. The plant will also include a gas combustion system to generate steam and electricity for operation. The proposed refinery would process approximately 1 million tonnes of bauxite each year.
“The facility is designed to operate at 95 percent capacity utilization for approximately 20 years, with total alumina production expected to be 19 million tons over its life,” he said.
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The Minister of Solid Minerals Development, Mr. Dele Arake, said the agreement is a landmark development for Nigeria’s mining industry and has the potential to contribute to Nigeria’s GDP. He said the project is in line with the ministry’s broader reform agenda aimed at modernizing regulations, increasing transparency and strengthening the mineral licensing framework. He says these reforms are starting to attract significant private sector investment in the sector. He also confirmed that all necessary government approvals have been granted to facilitate speedy implementation.
SMDF Executive Director Fatima Shinkafi said this is the largest capital investment project undertaken by the Fund since its establishment. He said the agreement is a major milestone that reflects the improvement of SMDF’s organizational capacity to support large-scale industrial projects.
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The project is expected to be the largest private investment project in Nigeria’s mining sector. The ministry estimates it will contribute $1.2 billion to the country’s GDP. Over the life of the project, it has the potential to add more than $25 billion to the national economy and more than $8 billion in foreign exchange earnings.
A pre-feasibility study for the agreement was conducted by AFC and SMDF and confirmed that the refinery is commercially viable and competitive. The findings support the broader objective of positioning Nigeria as an attractive and globally competitive mineral investment destination.
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The agreement was signed by SMDF’s Fatima Shinkafi and AFC’s Deputy Director General of Metals and Mining, Franklin Edoche, and the ceremony was also attended by AFC’s President and CEO Samaira Zubair.
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