The Federal Government of Nigeria (FGN) is working towards industrialising the country’s solid minerals sector by signing a $1.3 billion investment agreement with the Africa Finance Corporation (AFC).
Executed through the Solid Minerals Development Fund (SMDF), the deal focuses on the construction of a world-class alumina refinery in Nigeria.
The agreement prioritises value addition by processing minerals locally instead of exporting raw ores.
Speaking at the signing ceremony, Dele Alake, minister of Solid Minerals Development, described the pact as a solid development that will strengthen the sector’s contribution to Nigeria’s Gross Domestic Product (GDP).
$1.3 Billion Investment in Alumina Production
The refinery is designed to process one million tonnes of bauxite ore annually. Alumina, extracted from bauxite, is the main raw material for aluminium production.
The facility will employ the modern Bayer process and will include a gas-fired power plant to ensure energy self-sufficiency.
Segun Tomori, the minister’s special assistant on media, stated that the project is built for long-term sustainability.
“The facility is designed to operate for approximately 20 years at 95% utilisation, with total alumina output projected at 19 million tonnes over its lifespan,” he said.
Economic Impact: $25 Billion Injection to Nigeria’s Economy
The refinery is expected to become Nigeria’s largest-ever private investment in the mining sector. Beyond construction, it will generate significant foreign exchange earnings and contribute substantially to GDP.
The Ministry of Solid Minerals Development outlined the financial projections, “The project is expected to contribute about $1.2 billion to GDP annually, inject over $25 billion into the national economy across its lifecycle, and generate $8 billion in foreign exchange earnings.”
Addressing Exploration Risks
A challenge for mining investors in Nigeria has been the lack of reliable geoscience data. To tackle this, the FGN and AFC will fund a nationwide geoscience mapping exercise to provide high-quality mineral data.
“This initiative will de-risk exploration for investors and unlock the sector’s full potential,” the statement added.
A Milestone for the SMDF
For the Solid Minerals Development Fund, this marks its most significant achievement since inception. Executive Secretary Fatima Shinkafi hailed the deal as proof of SMDF’s maturity and capability.
“We are proud to facilitate this unprecedented milestone. This $1.3bn CAPEX project reflects SMDF’s growth and the government’s commitment to stopping the export of unprocessed minerals,” Shinkafi said.
Fast-Tracked Implementation and Strategic Partnerships
Minister Dele Alake confirmed that all necessary approvals have been fast-tracked to ensure immediate project commencement.
The deal also includes a joint strategic investment vehicle between AFC and SMDF to manage and develop exploration assets once mapping is complete.
“The vehicle will accelerate the development of identified exploration assets across Nigeria, driving rapid exploration, development, and production,” the Ministry said.
The $1.3 billion alumina refinery deal is expected to ensure Nigeria becomes a leading player in the global solid minerals market.
