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

The Federal Government, through the Solid Minerals Development Fund (SMDF), has signed a Memorandum of Understanding (MoU) with the Africa Finance Corporation (AFC) to jointly fund three major projects, including a $1.3 billion alumina refinery. The agreement covers the development of the refinery, a nationwide geoscience mapping exercise, and the establishment of a joint strategic […]

The Federal Government, through the Solid Minerals Development Fund (SMDF), has signed a Memorandum of Understanding (MoU) with the Africa Finance Corporation (AFC) to jointly fund three major projects, including a $1.3 billion alumina refinery.

The agreement covers the development of the refinery, a nationwide geoscience mapping exercise, and the establishment of a joint strategic investment vehicle to drive exploration and production across the country.

The Minister of Solid Minerals Development, Dele Alake, described the deal as a landmark step capable of transforming the mining sector and increasing its contribution to Nigeria’s Gross Domestic Product (GDP).

He said the refinery project, valued at $1.3 billion in capital expenditure, is designed to produce one million tonnes of bauxite ore per annum using a modern Bayer-process flowsheet with an on-site gas-fired cogeneration plant for steam and power.

Alake added that the facility is expected to operate for about 20 years at 95 per cent utilisation, with total alumina output projected at 19 million tonnes over its lifespan.

He noted that the project is expected to contribute about $1.2 billion annually to GDP, generate over $25 billion for the national economy across its lifecycle, and bring in about $8 billion in foreign exchange earnings.

According to him, the initiative aligns with the ministry’s priority of generating big data on specific minerals, de-risking exploration for investors and unlocking the full potential of Nigeria’s mineral resources.

The minister added that the ministry’s reform programme has secured the investment environment, modernised the regulatory framework and established a world-class mineral licensing regime that is attracting private sector capital.

He explained that he had granted all necessary approvals to fast-track the AFC–SMDF investments and directed relevant agencies to ensure seamless processing of permits, titles and regulatory clearances.

In her remarks, the Executive Secretary of SMDF, Fatima Shinkafi, said the agreement represents the largest funding project undertaken by the agency since its inception.

“We are very proud and honoured to facilitate this milestone, which is unprecedented since the inception of SMDF,” she said.

“It is a $1.3 billion CAPEX. SMDF has come of age to sit here and sign this deal with AFC. I thank the AFC for collaborating with us to boost the value addition policy of my boss, Dele Alake,” she added.

Shinkafi noted that initial feasibility studies conducted by AFC and SMDF confirmed the project’s competitiveness and commercial viability.

She explained that the joint strategic investment vehicle would accelerate the development of identified exploration assets and drive rapid exploration, development and production of selected leases.

The Permanent Secretary of the ministry, Farouk Yabo, said the initiative is a testament to the minister’s leadership and reform agenda.

He noted that the project has the potential to place Nigeria on the global mining map and pledged the ministry’s support for its implementation.