FG, AFC Ink Landmark $1.3bn Deal for Alumina Refinery

Federal Government has sealed a $1.3 billion investment partnership with the Africa Finance Corporation (AFC) to develop a world-class alumina refinery and two other strategic mining projects that will accelerate Nigeria’s solid minerals revolution.

The historic agreement, signed through the Solid Minerals Development Fund (SMDF), was announced in Abuja on Sunday by the Minister of Solid Minerals Development, Dr Dele Alake, via his Special Assistant on Media, Segun Tomori.

Described by stakeholders as one of the largest single private-sector investments in Nigeria’s mining history, the deal is expected to dramatically increase the sector’s contribution to national GDP while advancing President Bola Tinubu’s agenda for economic diversification away from crude oil.

Under the Memorandum of Understanding, the Federal Government and AFC will jointly finance three flagship initiatives: the construction of a 1 million-tonne-per-annum alumina refinery, a comprehensive nationwide geoscience mapping programme, and a special purpose investment vehicle dedicated to unlocking mineral exploration and production across priority assets.

The refinery, which will utilise a modern Bayer-process flowsheet complete with an on-site gas-fired cogeneration plant for steam and power, is designed to process one million tonnes of bauxite annually. Operating at 95 per cent utilisation capacity for approximately 20 years, it is projected to deliver a total alumina output of 19 million tonnes over its lifecycle.

Speaking during the signing ceremony, Minister Alake declared the partnership a game-changer for Nigeria’s mining and industrialisation strategy.

“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 Minister disclosed that he has already granted all necessary approvals to fast-track the AFC-SMDF investments and has directed all relevant agencies to ensure seamless processing of permits and regulatory clearances.

He added that recent reforms under his ministry have modernised regulations, strengthened transparency, and created a world-class mineral licensing framework that is now successfully attracting serious private capital.

On the economic projections, the $1.3 billion alumina refinery project alone is expected to contribute approximately $1.2 billion annually to Nigeria’s GDP, generate over $25 billion in total economic value across its lifespan, and earn the country about $8 billion in foreign exchange.

Feasibility studies jointly conducted by AFC and the Solid Minerals Development Fund have already confirmed the project’s commercial viability and long-term global competitiveness.

NaijaChoice News understands that the partnership forms a critical part of the ministry’s seven-point reform agenda focused on improving geological data availability, enhancing transparency, and drawing large-scale investors into the sector.

This latest breakthrough builds on earlier achievements recorded by the ministry, including the successful commissioning of a high-purity gold refining plant in Lagos, ongoing development of additional gold refineries nationwide, and significant progress on the $600 million lithium processing facility in Nasarawa State.

With this AFC collaboration, Nigeria is firmly positioning itself as a major industrial minerals processing hub in Africa, creating thousands of direct and indirect jobs while ensuring greater local value addition in the solid minerals value chain.

The signing ceremony was witnessed by top officials of the SMDF, who described the deal as proof that the Fund has “come of age” and is ready to partner with credible institutions to deliver President Tinubu’s value-addition vision for the sector.