The Federal Government has entered into a $1.3bn investment agreement with the African Finance Corporation aimed at accelerating the development of Nigeria’s mining industry and expanding the sector’s contribution to economic growth.
The agreement, executed through the Solid Minerals Development Fund, covers three key initiatives, including the construction of an alumina refinery, a nationwide geoscience mapping programme, and the establishment of a strategic investment vehicle to drive mineral exploration across the country.
Signed in Abuja after months of negotiations, the partnership is seen as a major step toward attracting large-scale investments into Nigeria’s solid minerals sector and reducing reliance on crude oil revenues.
According to a statement issued by the Special Assistant on Media to the Minister of Solid Minerals Development, Segun Tomori, the proposed alumina refinery will process approximately one million tonnes of bauxite annually using a modern Bayer-process system supported by an on-site gas-fired cogeneration plant for power and steam generation.
Minister of Solid Minerals Development, Dele Alake, described the agreement as a landmark initiative capable of transforming the mining industry through value addition, employment generation, and increased contribution to the nation’s Gross Domestic Product.
He noted that the refinery is expected to operate for about 20 years at 95 per cent capacity utilisation, producing an estimated 19 million tonnes of alumina within its lifespan.
Government projections indicate that the project could contribute about $1.2bn annually to Nigeria’s GDP, generate over $25bn in economic value, and deliver roughly $8bn in foreign exchange earnings.
Officials added that feasibility studies carried out by both the African Finance Corporation and the Solid Minerals Development Fund confirmed the project’s commercial viability and global competitiveness.
Executive Secretary of the Solid Minerals Development Fund, Fatima Shinkafi, described the agreement as the largest project facilitated by the agency since its establishment, noting that it represents a significant milestone in advancing Nigeria’s value-addition policy in the mining sector.
Beyond the refinery project, both parties also agreed to undertake a comprehensive geoscience mapping exercise aimed at providing reliable data on Nigeria’s mineral resources — a longstanding challenge that has discouraged major investors.
The initiative is expected to improve transparency, support exploration activities, and position Nigeria as a competitive destination for global mining investments.
The partners further agreed to create a joint investment platform that will accelerate exploration, development, and production activities across selected mining assets once exploration campaigns are completed.
Alake affirmed that all necessary approvals had been granted to fast-track implementation, directing relevant agencies under the ministry to ensure prompt issuance of permits and regulatory clearances.
Permanent Secretary in the ministry, Farouk Yabo, said the partnership reflects ongoing reforms designed to reposition Nigeria’s mining industry and attract credible private capital.
The development aligns with the Federal Government’s broader strategy to diversify the economy by harnessing the country’s vast deposits of minerals such as bauxite, lithium, gold, iron ore, and rare earth elements.
Despite its resource potential, Nigeria’s mining sector currently contributes less than one per cent to GDP due to infrastructure gaps, illegal mining activities, and limited investment.
Industry stakeholders believe the AFC partnership could serve as a model for future large-scale investments capable of delivering sustainable economic diversification and long-term foreign investment inflows.
