The Federal Government has signed a landmark $1.3 billion Memorandum of Understanding (MoU) with the Africa Finance Corporation (AFC) to develop a major alumina refinery and accelerate reforms in Nigeria’s solid minerals sector.
The agreement, executed through the Solid Minerals Development Fund (SMDF), covers three key initiatives: construction of a $1.3 billion alumina refinery, a nationwide geoscience mapping programme, and the establishment of a joint strategic investment vehicle to fast-track mineral exploration and development.
Speaking at the signing ceremony, the Minister of Solid Minerals Development, Dele Alake, described the deal as a transformative intervention that would reposition mining as a significant contributor to Nigeria’s Gross Domestic Product (GDP).
Alake said the refinery is designed to operate for about 20 years at 95 per cent capacity utilisation and is projected to produce approximately 19 million tonnes of alumina over its lifespan.
According to him, the project will generate about one million tonnes of bauxite ore annually using a modern Bayer-process flowsheet, supported by an on-site gas-fired cogeneration plant for steam and power generation.
He disclosed that the investment could contribute about $1.2 billion annually to GDP, inject over $25 billion into the national economy throughout its lifecycle, and generate an estimated $8 billion in foreign exchange earnings.
The minister noted that the initiative aligns with the Federal Government’s policy of promoting value addition in the mining sector, attracting foreign direct investment, and strengthening Nigeria’s competitiveness in the global minerals market.
He directed relevant agencies to expedite the processing of all necessary permits and regulatory approvals to ensure timely execution of the projects.
In his remarks, the Permanent Secretary in the ministry, Farouk Yabo, said the project reflects ongoing reforms aimed at modernising the regulatory framework and creating a secure investment climate for private sector participation.
Also speaking, the Executive Secretary of SMDF, Fatima Shinkafi, described the agreement as the agency’s largest funding project since its establishment, noting that it represents a significant milestone in advancing the ministry’s value-addition agenda.
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Under the agreement, AFC and SMDF will establish a joint investment vehicle to accelerate exploration, development, and production across selected mineral assets nationwide.
Feasibility studies conducted by AFC and SMDF confirmed the project’s commercial viability, with officials expressing confidence that it will position Nigeria as a leading global destination for mineral investment.
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