Nigeria signs $1.3bn alumina project pact with AFC
The Federal Government has signed a Memorandum of Understanding with the Africa Finance Corporation for a $1.3 billion alumina refinery project aimed at boosting value addition and increasing the mining sector’s contribution to the economy.
The agreement, executed through the Solid Minerals Development Fund, also covers a comprehensive geoscience mapping exercise and the establishment of a joint strategic investment vehicle to drive exploration and development of mineral assets across the country.
Speaking at the signing ceremony, the Minister of Solid Minerals Development, Dele Alake, described the deal as a landmark initiative poised to transform the mining sector and significantly raise its contribution to Nigeria’s Gross Domestic Product.
The proposed refinery is expected to process one million tonnes of bauxite ore annually using a modern Bayer-process flowsheet, supported by an on-site gas-fired cogeneration plant for steam and power. The facility is designed to operate for about 20 years at 95 per cent utilisation, with projected alumina output of 19 million tonnes over its lifespan.
Executive Secretary of the Solid Minerals Development Fund, Fatima Shinkafi, said the agreement represents the agency’s largest funding project since its inception. She described the $1.3 billion capital expenditure as an unprecedented milestone and commended AFC for partnering with the fund to advance the ministry’s value-addition policy.
According to projections released at the event, the project is expected to contribute $1.2 billion annually to GDP, generate more than $25 billion for the national economy over its lifecycle and earn about $8 billion in foreign exchange. It is also projected to rank as Nigeria’s largest private investment in the mining sector and a major foreign direct investment.
Permanent Secretary of the ministry, Farouk Yabo, said the initiative underscores ongoing reforms in the sector, including regulatory modernisation and improvements in the mineral licensing regime aimed at attracting private capital.
The minister said all necessary approvals had been granted to fast-track the investment and directed relevant agencies to ensure seamless processing of permits and regulatory clearances. The agreement was signed by Shinkafi on behalf of the Federal Government and Franklin Edochie, Deputy Director and Head of Metals and Mining at AFC, on behalf of the corporation, with AFC President and Chief Executive Officer Samaila Zubairu witnessing the ceremony.
