ABUJA, Nigeria (VOICE OF NAIJA)-The African Finance Corporation and the Federal Government, through the Solid Minerals Development Fund, have executed an investment agreement to co-finance three priority initiatives: a $1.3bn alumina refinery, a nationwide geoscience mapping programme, and a dedicated investment vehicle aimed at unlocking Nigeria’s mineral resources.
The agreement, signed in Abuja, concludes months of negotiations and reflects rising investor confidence in reforms underway in Nigeria’s mining sector.
In a statement issued on Sunday by Segun Tomori, Special Assistant on Media to the Minister of Solid Minerals Development, the alumina refinery is projected to process about one million tonnes of bauxite annually using a modern Bayer-process flowsheet, supported by an on-site gas-fired cogeneration plant for steam and power.
The statement read, “The Africa Finance Corporation and the Federal Government, through the Solid Minerals Development Fund, have signed an investment agreement to jointly fund three projects: a $1.3bn alumina project, a comprehensive geoscience mapping exercise, and an investment vehicle to realise the goals.
READ ALSO:FG Signs Concession Deal For Enugu International Airport
“The MOU is the climax of talks between AFC and SMDF to jointly fund the construction of a $1.3bn alumina refinery, estimated to generate 1 million tonnes of bauxite ore per annum, utilising a modern Bayer-process flowsheet with an on-site gas-fired cogeneration plant for steam and power.”
Speaking at the signing ceremony, the Minister of Solid Minerals Development, Dele Alake, described the agreement as transformative, saying it would accelerate value addition, create jobs, and significantly boost the sector’s contribution to Nigeria’s economy.
“This is a landmark deal, poised to transform the mining sector and increase its contribution to the nation’s Gross Domestic Product,” Alake said.
The refinery is designed to operate for about 20 years at 95 per cent utilisation, with cumulative alumina output estimated at 19 million tonnes over the project’s lifespan.
Government projections indicate the project could add roughly $1.2bn annually to GDP, generate more than $25bn in economic value over its lifecycle, and deliver about $8bn in foreign exchange earnings.
Officials noted that feasibility studies carried out by AFC and SMDF confirmed the investment’s commercial viability and competitiveness.
“Expected to be Nigeria’s largest mining-sector private investment and a landmark foreign direct investment, the project will contribute $1.2bn to GDP annually, over $25bn to the national economy across its lifecycle, and generate $8bn in foreign exchange earnings.
Initial feasibility studies conducted by AFC and SMDF have confirmed the project’s competitiveness and commercial viability, validating the Ministry’s efforts to position Nigeria as a globally competitive minerals destination.
“This initiative delivers on the Ministry’s priority of generating big data on specific minerals, de-risking exploration for international investors, and unlocking the full potential of Nigeria’s minerals.”
The Executive Secretary of SMDF, Hajia Fatima Shinkafi, said the deal represents the largest project undertaken by the fund since its establishment.
“We are very proud and honoured to facilitate this phenomenal milestone, which is quite unprecedented since the inception of SMDF. It is a $1.3bn capital expenditure project,” Shinkafi said. “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.”
Beyond the refinery, the partners also agreed to carry out a comprehensive geoscience mapping exercise to produce credible data on Nigeria’s mineral endowment.
Industry experts say the lack of reliable geological data has long constrained large-scale investment in the sector.
The mapping initiative is expected to aid exploration, improve transparency, and enhance Nigeria’s global competitiveness as a mining destination.
“This initiative delivers on our priority of generating big data on specific minerals, de-risking exploration for international investors, and unlocking the full potential of Nigeria’s resources,” the minister noted.
In addition, both sides agreed to establish a joint strategic investment vehicle to fast-track the development of exploration assets nationwide.
The vehicle will support accelerated exploration, development, and production of selected mining leases once exploration campaigns are concluded.
Reaffirming the Federal Government’s commitment to speeding up mining development, Alake said all required approvals had been granted to expedite AFC–SMDF investments.
“I have directed all relevant agencies under the ministry to ensure seamless processing and grant of all required permits, titles, and regulatory clearances,” he said.
“We are determined to ensure that investors do not face unnecessary delays. The era of bottlenecks is over.”
The ministry’s Permanent Secretary, Farouk Yabo, described the agreement as evidence of sustained reforms in the sector.
“This initiative has the potential to put Nigeria on the global mining map. It reflects the transformative leadership that is repositioning the sector and attracting serious private capital,” Yabo said.
The agreement comes as the Federal Government intensifies efforts to diversify the economy away from crude oil by expanding the solid minerals sector.
Although Nigeria holds substantial deposits of bauxite, lithium, gold, iron ore, and rare earth minerals, the sector contributes less than one per cent to GDP due to infrastructure deficits, illegal mining, and weak investment.
Recent reforms include modernised licensing processes, enhanced security at mining sites, and a stronger push for value addition.
If successfully implemented, the AFC partnership could set a template for large-scale mining investments in Nigeria.
Shinkafi signed the agreement on behalf of the Federal Government, while Franklin Edochie, Deputy Director and Head of Metals and Mining at AFC, signed for the corporation.
The ceremony was witnessed by the AFC President and Chief Executive Officer, Samaila Zubairu, along with senior government officials.
Observers say the outcome of the project could be pivotal in determining whether Nigeria’s mining reforms translate into sustained foreign investment and long-term economic diversification.