FG, Africa Finance Corporation Seal $1.3bn Alumina Refinery Pact To Power Mining Revolution
•By Admin
ABUJA — THE Federal Government, through the Solid Minerals Development Fund (SMDF), has signed a landmark $1.3 billion Memorandum of Understanding with the Africa Finance Corporation (AFC) to jointly finance a major alumina refinery project, a nationwide geoscience mapping programme, and establish a strategic investment vehicle to unlock Nigeria’s mineral wealth.
The agreement marks the culmination of extensive negotiations between AFC and SMDF and centres on the construction of a $1.3 billion alumina refinery projected to process one million tonnes of bauxite ore annually.
The facility will deploy a modern Bayer-process flowsheet and feature an on-site gas-fired cogeneration plant to provide steam and power.
Speaking at the signing ceremony on Sunday the 1st of March, 2026, Minister of Solid Minerals Development, Dr. Dele Alake, described the pact as a transformative milestone set to reposition the mining sector and significantly boost its contribution to Nigeria’s Gross Domestic Product.
Designed for a 20-year operational lifespan at 95 per cent utilisation, the refinery is expected to produce approximately 19 million tonnes of alumina over its lifecycle.
Executive Secretary of SMDF, Fatima Shinkafi, hailed the agreement as the agency’s largest funding commitment since inception.
She described the $1.3 billion capital expenditure as unprecedented and a testament to SMDF’s growing capacity to drive large-scale investments aligned with the Ministry’s value-addition agenda.
Projected to be Nigeria’s largest private investment in the mining sector and a major foreign direct investment inflow, the project is expected to contribute $1.2 billion annually to GDP, inject over $25 billion into the economy across its lifecycle, and generate an estimated $8 billion in foreign exchange earnings.
Initial feasibility studies conducted by AFC and SMDF confirmed the project’s commercial viability and global competitiveness, reinforcing the Ministry’s strategy of positioning Nigeria as a prime destination for mineral investment.
Beyond the refinery, both institutions agreed to establish a joint strategic investment vehicle aimed at accelerating exploration and development of identified mineral assets nationwide.
The initiative is expected to fast-track exploration campaigns, de-risk investments, and unlock production across selected mining leases.
Permanent Secretary of the Ministry, Engr. Farouk Yabo, commended the development, describing it as evidence of reform-driven leadership and reiterating the Ministry’s commitment to ensuring seamless regulatory support for the project’s execution.
President and CEO of AFC, Samaila Zubairu, witnessed the signing alongside AFC’s Deputy Director and Head of Metals & Mining, Franklin Edochie, who signed on behalf of the corporation.
Alake reaffirmed the Federal Government’s resolve to accelerate mining sector growth, confirming that all necessary approvals have been granted to fast-track the partnership.
He directed relevant agencies under the Ministry to ensure timely processing of permits, titles and regulatory clearances to guarantee smooth implementation.
The agreement underscores the Federal Government’s push to deepen reforms, strengthen regulatory frameworks, and attract sustained private sector capital into Nigeria’s solid minerals sector.
•INDEPENDENTNG.