Federal Govt, AFC Seal $1.3bn Alumina Refinery Deal

The federal government has taken a major step towards industrialising Nigeria’s mining sector by signing a landmark $1.3 billion alumina refinery agreement with the Africa Finance Corporation (AFC).

The agreement, executed through the Solid Minerals Development Fund (SMDF), provides for joint funding of three strategic initiatives: the development of a $1.3 billion alumina refinery, a comprehensive nationwide geoscience mapping programme, and the establishment of a joint strategic investment vehicle to accelerate exploration and production across selected mineral assets.

According to a statement issued on Sunday by the Minister’s Special Assistant on Media, Segun Tomori, the Memorandum of Understanding marks the culmination of extensive negotiations between AFC and SMDF. The refinery is projected to process one million tonnes of bauxite ore per annum using a modern Bayer-process flowsheet, supported by an on-site gas-fired cogeneration plant for steam and power generation.

Speaking at the signing ceremony, the Minister of Solid Minerals Development, Dele Alake, described the agreement as a transformative milestone that will significantly boost the sector’s contribution to Nigeria’s Gross Domestic Product (GDP).

The facility is designed for approximately 20 years of operation at 95 per cent utilisation, with total alumina output projected at 19 million tonnes over its lifespan.

SMDF executive secretary, Hajia Fatima Shinkafi, hailed the agreement as the agency’s largest funding commitment since its establishment.

“We are very proud and honoured to facilitate this phenomenal milestone, which is unprecedented since the inception of SMDF. It is a $1.3 billion CAPEX project. SMDF has come of age to be able to sit here and sign this deal with AFC.

I thank AFC for collaborating with us to boost the value-addition policy of my boss, Dele Alake,” she said.

The project is expected to become Nigeria’s largest private investment in the mining sector and a landmark foreign direct investment. It is projected to contribute $1.2 billion annually to GDP, over $25 billion to the national economy throughout its lifecycle, and generate $8 billion in foreign exchange earnings.

According to the statement, initial feasibility studies conducted by AFC and SMDF confirmed the project’s competitiveness and commercial viability, reinforcing the Ministry’s strategy to position Nigeria as a globally competitive minerals destination.

Beyond the refinery, both parties also agreed to establish a joint strategic investment vehicle to fast-track the development of identified exploration assets across the country.

The initiative is designed to de-risk exploration, generate critical geological data, and unlock the full potential of Nigeria’s mineral resources.

Permanent secretary of the ministry,  Farouk Yabo, described the initiative as evidence of transformative leadership within the sector.

He pledged the full support of the ministry’s bureaucracy in ensuring the success of the project and sustaining ongoing reforms.

Alake further noted that the agreement aligns with the Ministry’s reform agenda, which he said has strengthened the investment climate, modernised the regulatory framework, and established a world-class mineral licensing regime now attracting serious private sector capital.

Demonstrating the federal government’s commitment to accelerating mining development, the minister confirmed that all necessary approvals have been granted to fast-track the AFC–SMDF investments.

He directed relevant agencies under the Ministry to ensure seamless processing of permits, titles and regulatory clearances to support timely project execution.

While Hajia Fatima Shinkafi signed on behalf of the federal government, Franklin Edochie, deputy director and Head, Metals & Mining at AFC, signed on behalf of the Corporation.

The president and chief executive officer of AFC, Samaila Zubairu, and the minister witnessed the ceremony.