The Federal Government of Nigeria has signed a landmark $1.3 billion investment agreement with the Africa Finance Corporation (AFC) to develop a major alumina refinery and advance the country’s solid minerals sector, in what officials are calling a transformative milestone for industrialisation and economic diversification.
The pact was formalised through the Solid Minerals Development Fund (SMDF) and was disclosed in a statement by the Minister of Solid Minerals Development, Dr. Dele Alake, who highlighted that the partnership will significantly boost the contribution of mining to Nigeria’s Gross Domestic Product (GDP) while attracting large-scale private capital into the sector.
Under the agreement, the government and AFC will jointly fund the construction of a 1 million-tonne-per-annum alumina refinery, which will process bauxite ore into alumina using a modern Bayer-process flowsheet supported by an on-site gas-fired power and steam cogeneration plant. The facility, designed to operate for around 20 years at 95 per cent capacity utilisation, is expected to produce about 19 million tonnes of alumina over its lifespan.
Officials say the project is set to become one of the largest private investments in Nigeria’s mining industry, driving substantial value addition within the minerals value chain. It is projected to contribute approximately $1.2 billion annually to GDP, inject more than $25 billion into the economy over its lifecycle, and generate an estimated $8 billion in foreign exchange earnings figures officials describe as major boosts to the national economy.
Beyond the refinery itself, the pact includes plans for a nationwide geoscience mapping programme, aimed at generating reliable geological data to de-risk investments and strengthen Nigeria’s mining investment climate. Both partners also agreed to set up a joint strategic investment vehicle to drive rapid exploration, development and production activities across identified mineral assets nationwide once exploration campaigns are completed.
At the signing ceremony, SMDF Executive Secretary Hajiya Fatima Shinkafi described the accord as the agency’s “biggest funding milestone since inception”, noting that the $1.3 billion capital expenditure reflects growing confidence in the SMDF’s capacity to facilitate large-scale, value-added investments. Government representatives echoed the sentiment, saying all necessary approvals have been granted to fast-track project execution and that relevant agencies have been directed to expedite permits, licences and regulatory clearances for seamless implementation. The agreement underscores the Federal Government’s ongoing commitment to mineral sector reforms, improved regulatory frameworks and enhanced transparency measures aimed at positioning Nigeria as a competitive destination for global mining investors. The refinery project is expected to anchor broader industrial activity, stimulate export earnings, and generate jobs across the value chain as Nigeria transitions toward a more diversified economy.
