Africa Finance Corporation (AFC) and the federal government have signed a major Memorandum of Understanding (MoU) to jointly fund three strategic projects, led by a $1.3 billion alumina refinery. The agreement marks one of the most significant partnerships in Nigeria’s mining sector in recent years and signals a renewed push to industrialise the country’s vast mineral resources.
The deal is between Africa Finance Corporation and the federal government through the Solid Minerals Development Fund (SMDF). At the heart of the partnership is the construction of a large-scale alumina refinery designed to process bauxite into alumina, a key raw material used in aluminium production.
The proposed refinery is valued at $1.3 billion in capital expenditure and is expected to generate about one million tonnes of bauxite ore per year. It will operate using a modern Bayer-process flowsheet and will include an on-site gas-fired cogeneration plant to provide steam and power. This integrated approach is aimed at improving efficiency and ensuring stable operations.
The facility is projected to run for approximately 20 years at 95 per cent utilisation. Over its lifespan, total alumina output is estimated at 19 million tonnes. According to projections shared during the signing ceremony, the project is expected to contribute about $1.2 billion annually to Nigeria’s Gross Domestic Product (GDP). Across its lifecycle, it could inject more than $25 billion into the national economy and generate up to $8 billion in foreign exchange earnings.
Speaking at the event, the Minister of Solid Minerals Development, Dele Alake, described the agreement as a landmark step in transforming the mining sector. He noted that the ministry’s reform programme has strengthened the regulatory framework, improved licensing systems, and created a more secure investment climate capable of attracting serious private capital.
Alake confirmed that all necessary approvals to fast-track the AFC–SMDF investments have been granted. He also directed relevant agencies under the ministry to ensure seamless processing of permits, titles, and regulatory clearances to support timely execution of the projects.
Beyond the alumina refinery, the MoU also covers a comprehensive national geoscience mapping exercise. This initiative is designed to generate reliable mineral data across the country, helping to de-risk exploration activities for both local and international investors. By improving geological data availability, the government aims to position Nigeria as a globally competitive minerals destination.
In addition, AFC and SMDF agreed to establish a joint strategic investment vehicle. This vehicle will focus on accelerating the development of identified exploration assets across Nigeria. The goal is to drive rapid exploration, development, and eventual production of selected mineral leases once successful exploration campaigns are completed.
The Executive Secretary of SMDF, Fatima Shinkafi, described the agreement as the agency’s largest funding project since its inception. She noted that the $1.3 billion capital commitment demonstrates that SMDF has matured into a strong institution capable of partnering with major continental financiers like AFC to deliver large-scale value addition projects.
On the AFC side, the MoU was signed by Franklin Edochie, Deputy Director and Head of Metals & Mining, while the President and CEO of AFC, Samaila Zubairu, witnessed the ceremony. The partnership reflects AFC’s continued focus on supporting industrial projects that unlock Africa’s natural resource value chains.
Initial feasibility studies conducted by AFC and SMDF have reportedly confirmed the project’s competitiveness and commercial viability. This validation strengthens confidence that the refinery can operate sustainably while delivering long-term economic benefits.
The agreement aligns with the federal government’s broader strategy to shift Nigeria away from exporting raw minerals toward local processing and value addition. Instead of shipping out bauxite in its raw form, refining it domestically into alumina creates jobs, builds industrial capacity, and strengthens foreign exchange earnings.
If successfully executed, the AFC–federal government partnership could redefine Nigeria’s mining landscape. With a $1.3 billion alumina refinery at its core, supported by geoscience mapping and a dedicated investment vehicle, the MoU sets the stage for deeper private sector participation and a more industrialised minerals sector.
