FG, AFC seal $1.3bn alumina pact for mining growth, FX inflows

The Federal Government and Africa Finance Corporation (AFC) have signed a landmark $1.3 billion Memorandum of Understanding (MoU) to develop an integrated alumina project, deepen geoscience mapping and establish a joint strategic investment vehicle.

This is all in a move expected to significantly boost Nigeria’s mining output, foreign direct investment, and foreign exchange earnings.

The agreement, executed through the Solid Minerals Development Fund (SMDF) and Africa Finance Corporation (AFC) centres on the construction of a $1.3 billion alumina refinery designed to process up to one million tonnes of bauxite ore annually.

The facility will deploy a modern Bayer-process flowsheet and an on-site gas-fired cogeneration plant for steam and power generation.

Dele Alake, Minister of Solid Minerals Development, described the deal as transformative, saying it would reposition the mining sector as a key contributor to gross domestic product and accelerate Nigeria’s industrialisation drive.

He said the project aligns with Bola Tinubu’s Administration’s reform agenda, which had modernised regulation, secured the investment environment, and strengthened the mineral licensing framework to attract long-term private capital.

The plant is projected to operate for 20 years at 95% capacity utilisation, producing a total of 19 million tonnes of alumina across its lifecycle. The project is expected to contribute $1.2 billion to GDP annually, generate over $25 billion in cumulative economic value, and deliver $8 billion in foreign exchange earnings.

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Fatima Shinkafi, Executive Secretary, Solid Minerals Development Fund (SMDF), said the project represents the Agency’s largest funding initiative since inception and signals its growing capacity to drive large-scale investments.

She said the $1.3 billion capital expenditure underlines the maturity of the fund and its commitment to the Ministry’s value addition policy, stressing that the partnership would strengthen Nigeria’s position as a competitive minerals destination.

Initial feasibility studies jointly conducted by AFC and SMDF confirmed the project’s commercial viability and global competitiveness, reinforcing investor confidence in Nigeria’s mining sector.

Beyond the alumina refinery, the agreement also covers a comprehensive national geoscience mapping programme and the establishment of a joint strategic investment vehicle.

The platform will accelerate exploration, development, and production of priority mineral assets across the country, reducing exploration risk and unlocking new investment opportunities.

Farouk Yabo, Permanent Secretary, Ministry of Solid Minerals Development, described the deal as evidence of the sector’s transformation under the current leadership, noting its potential to elevate Nigeria’s profile in the global mining industry.

Franklin Edochie, Deputy-Director and Head, Metals and Mining, AFC, signed on behalf of AFC, while Fatima Shinkafi signed for the Federal Government.

Samaila Zubairu, President and Chief Executive Officer, AFC, and the minister witnessed the signing.

Alake said all regulatory approvals had been granted to fast-track implementation, directing agencies under the Ministry to ensure seamless processing of permits and clearances to support timely execution.

He added that the partnership reflects the Government’s resolve to drive rapid sectoral growth, deepen value addition, and position mining as a major pillar of economic diversification.