FG, AFC seal $1.3bn deal to boost mining sector

The Federal Government has signed a $1.3 billion investment agreement with the African Finance Corporation (AFC) to finance three major projects aimed at transforming Nigeria’s mining industry.

The agreement, executed in Abuja between AFC and the Solid Minerals Development Fund (SMDF), covers the construction of a $1.3bn alumina refinery, a nationwide geoscience mapping programme, and the establishment of a strategic investment vehicle to accelerate mineral development.

According to a statement by the Special Assistant on Media to the Minister of Solid Minerals Development, Segun Tomori, the alumina refinery will process about one million tonnes of bauxite annually using a modern Bayer-process flowsheet. The facility will be supported by an on-site gas-fired cogeneration plant to generate steam and power.

The Minister of Solid Minerals Development, Dele Alake, described the agreement as a landmark step that would boost value addition, create jobs, and significantly increase the sector’s contribution to Gross Domestic Product.

“This is a landmark deal, poised to transform the mining sector and increase its contribution to the nation’s GDP,” Alake said at the signing ceremony.

Designed for a projected 20-year operational lifespan at 95 per cent capacity utilisation, the refinery is expected to produce about 19 million tonnes of alumina over its lifecycle. Government projections indicate the project could contribute $1.2bn annually to GDP, generate over $25bn in economic value, and deliver about $8bn in foreign exchange earnings.

Officials said feasibility studies conducted by AFC and SMDF confirmed the project’s commercial viability and global competitiveness, positioning it as potentially Nigeria’s largest private mining-sector investment and a significant foreign direct investment.

Beyond the refinery, the partnership includes a comprehensive geoscience mapping exercise to generate reliable geological data on Nigeria’s mineral resources. Experts have long identified the lack of credible data as a major barrier to large-scale investment in the sector.

The partners also agreed to establish a joint strategic investment vehicle to fast-track exploration, development, and production across selected mining leases once exploration campaigns are completed.

Executive Secretary of SMDF, Hajia Fatima Shinkafi, described the agreement as the biggest project undertaken by the fund since its inception.

“This is quite unprecedented since the inception of SMDF. It is a $1.3bn capital expenditure project, and we are proud to collaborate with AFC to boost value addition in the sector,” she said.

The Permanent Secretary in the ministry, Farouk Yabo, noted that the initiative reflects ongoing reforms aimed at attracting serious private capital and repositioning Nigeria on the global mining map.

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. The ceremony was witnessed by AFC President and CEO Samaila Zubairu and other senior officials.

The development comes as the government intensifies efforts to diversify the economy away from crude oil by unlocking the potential of the solid minerals sector, which currently contributes less than one per cent to GDP despite Nigeria’s vast deposits of bauxite, lithium, gold, iron ore, and rare earth minerals.