Nigeria has struck a $1.3 billion investment agreement with the Africa Finance Corporation (AFC) to construct a major alumina refinery and accelerate nationwide mineral exploration, marking one of the country’s largest private-sector mining investments and a significant step in its push to diversify beyond oil.
The memorandum of understanding, signed through the government’s Solid Minerals Development Fund (SMDF) and announced over the weekend, encompasses three core initiatives: the development of the alumina refinery, a comprehensive national geoscience mapping programme, and the creation of a strategic investment vehicle to fast-track exploration and production of key mineral assets.
The flagship alumina refinery is designed to process approximately 1 million tonnes of bauxite ore per year using a modern Bayer-process flowsheet. It will include an on-site gas-fired cogeneration plant to supply steam and electricity, enhancing operational efficiency. Over an expected 20-year lifespan at 95% utilisation, the facility is projected to produce approximately 19 million tonnes of alumina.
Officials described the project as a catalyst for industrialising Nigeria’s mining sector. “This MOU is the climax of talks to jointly fund the construction of a $1.3 billion alumina refinery,” according to a statement from the Ministry of Solid Minerals Development. The initiative is expected to generate new jobs, attract further investment, and strengthen local value addition in the solid minerals sector.
Hajiya Fatima Shinkafi, Executive Secretary of the SMDF, hailed the partnership: “We are very proud and honoured to facilitate this phenomenal milestone. It is a $1.3 billion capital expenditure project, and SMDF has come of age to sign this deal with AFC.”
Strategic importance and global market positioning
The deal comes as Nigeria intensifies efforts to reduce its heavy reliance on crude oil exports. The mining sector has grown in strategic importance, with the government targeting bauxite and other critical minerals to drive downstream industries such as aluminium production.
Alumina, the refined output of the new refinery, serves as a key feedstock for aluminium smelters globally, positioning Nigeria to tap into rising demand from electric vehicles, renewable energy infrastructure, and construction.
The AFC, a leading pan-African multilateral development finance institution, brings both capital and expertise to the table. Franklin Edochie, AFC’s Deputy Director and Head of Metals and Mining, witnessed the signing alongside Minister of Solid Minerals Development Dele Alake.
Analysts view the project as a blueprint for public-private collaboration in African resource development. By combining government-backed exploration mapping with private investment vehicles, the partnership aims to de-risk future mining projects and unlock Nigeria’s untapped mineral potential across multiple states.
While full financial projections were not detailed in the announcement, government sources have indicated the refinery and related initiatives could deliver substantial economic returns through export revenues, local processing gains, and multiplier effects in employment and infrastructure. The agreement also aligns with broader continental goals under the African Continental Free Trade Area to build integrated value chains in critical minerals.
Construction timelines and exact locations for the refinery have yet to be publicly confirmed, but the SMDF is expected to provide further updates as the project advances from planning to implementation.
For Nigeria, the $1.3 billion commitment represents more than a single infrastructure win, it signals growing international confidence in the country’s mining reforms and its ambition to become a regional player in the global aluminium supply chain. As African nations compete to capture greater value from their natural resources, deals of this scale could set a precedent for similar partnerships across the continent.
