FG, African finance corporation seal $1.3bn alumina refinery deal

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 program, 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, March 1, 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.

SMDF Executive Secretary, Hajia 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 globally competitive minerals destination.

Beyond the refinery, both parties also agreed to establish a joint strategic investment vehicle aimed at fast-tracking the development of identified exploration assets across the country. The initiative is designed to de-risk exploration, generate critical geological data, and unlock the full potential of Nigeria’s mineral resources.

Alake noted that the gains delivered by the Ministry’s reform program, which has secured the investment environment, modernized the regulatory framework and established a world-class mineral licensing regime, is now attracting serious private sector capital.

Demonstrating the FG’s resolve to accelerate the development of the mining sector, Alake confirmed that he has granted all necessary approvals to fast-track the AFC–SMDF investments. The minister therefore directed the relevant agencies under the ministry to ensure the seamless processing and grant of all requisite permits, titles and regulatory clearances to support the timely execution of the partnership’s investment program.

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 as part of efforts to diversify the economy beyond oil dependency.