Federal Government, Africa Finance Corporation sign $1.3bn alumina refinery deal
The Federal Government has signed a $1.3 billion Memorandum of Understanding with the Africa Finance Corporation to jointly develop an alumina refinery and related mining projects in Nigeria.
The agreement, executed through the Solid Minerals Development Fund, is described as one of the largest foreign direct investments in the country’s mining sector.
Minister of Solid Minerals Development, Dr. Dele Alake, said the deal marks a significant milestone in the Federal Government’s drive to reposition mining as a major contributor to the nation’s Gross Domestic Product.
According to a statement issued in Abuja, the project will involve the construction of a $1.3 billion alumina refinery designed to process about one million tonnes of bauxite ore annually using a modern Bayer-process flowsheet. The facility will include an on-site gas-fired cogeneration plant to generate steam and power.
Alake said the investment aligns with the administration’s economic reform agenda and reflects growing investor confidence in Nigeria’s solid minerals sector. He noted that the ministry’s reforms have strengthened the regulatory framework, enhanced security of mining assets and established a modern licensing regime aimed at attracting private capital.
The minister announced that all necessary approvals had been granted to fast-track the project and directed relevant agencies to ensure seamless processing of permits and regulatory clearances.
The refinery is projected to operate for approximately 20 years at 95 per cent capacity utilisation, with total alumina output estimated at 19 million tonnes over its lifespan.
Executive Secretary of the Solid Minerals Development Fund, Hajia Fatima Shinkafi, described the deal as the agency’s largest funding initiative since inception, noting that it underscores Nigeria’s commitment to value addition in the mining industry.
The project is expected to contribute about $1.2 billion annually to GDP, generate over $25 billion across its lifecycle and yield roughly $8 billion in foreign exchange earnings.
As part of the partnership, AFC and the Solid Minerals Development Fund will establish a joint strategic investment vehicle to accelerate exploration, development and production across selected mining assets nationwide.
Officials said feasibility studies conducted by both parties confirmed the project’s commercial viability, positioning Nigeria as a competitive destination for global mineral investment.
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