By Obinna Uballa
Nigeria has taken a major step toward revitalising its solid minerals industry following the signing of a $1.3bn investment agreement between the African Finance Corporation (AFC) and the Federal Government through the Solid Minerals Development Fund.
The agreement, executed in Abuja after months of negotiations, will see both parties jointly finance three strategic initiatives: the construction of a $1.3bn alumina refinery, a nationwide geoscience mapping programme, and the establishment of a dedicated investment vehicle to accelerate mineral asset development across the country.
According to a statement issued by the Special Assistant on Media to the Minister of Solid Minerals Development, Segun Tomori, the alumina refinery project forms the centrepiece of the partnership. The facility is designed to process about one million tonnes of bauxite annually using a modern Bayer-process flowsheet, supported by an on-site gas-fired cogeneration plant to generate steam and power.
The refinery is projected to operate for approximately 20 years at 95 per cent capacity utilisation, with total alumina output estimated at 19 million tonnes over its lifespan.
Speaking at the signing ceremony, Minister of Solid Minerals Development, Dele Alake, described the agreement as transformative for the mining sector and critical to the Federal Government’s economic diversification agenda.
“This is a landmark deal poised to transform the mining sector and significantly increase its contribution to the nation’s Gross Domestic Product,” Alake said.
Government projections indicate that the project could contribute about $1.2bn annually to GDP, generate over $25bn in economic value across its lifecycle, and earn approximately $8bn in foreign exchange.
Officials said feasibility studies conducted by AFC and SMDF confirmed the commercial viability and global competitiveness of the refinery investment, positioning it as potentially the largest private-sector mining investment in Nigeria to date.
Beyond the refinery, the partnership also includes a comprehensive geoscience mapping initiative aimed at generating reliable geological data on Nigeria’s mineral resources. Industry experts have long identified the absence of credible and up-to-date geological data as a major barrier to attracting large-scale investment into the sector.
The mapping exercise is expected to de-risk exploration activities, improve transparency, and strengthen Nigeria’s appeal as a competitive global mining destination.
In addition, both parties agreed to establish a joint strategic investment vehicle to fast-track the exploration and development of selected mining assets nationwide. The vehicle will provide structured financing to move projects from exploration to production, ensuring quicker commercialisation of viable mineral deposits.
The Executive Secretary of SMDF, Hajia Fatima Shinkafi, described the deal as the largest project undertaken by the fund since its inception. She said the agreement signalled that the fund had matured into a credible platform capable of partnering with international financial institutions to deliver large-scale investments.
Also speaking at the event, the Permanent Secretary in the ministry, Farouk Yabo, said the agreement reflected the impact of ongoing reforms aimed at repositioning the sector and attracting serious private capital.
The AFC delegation was led by its President and Chief Executive Officer, Samaila Zubairu, while Franklin Edochie, Deputy Director and Head of Metals and Mining at AFC, signed on behalf of the corporation.
The development comes as Nigeria intensifies efforts to diversify its economy away from crude oil by harnessing its vast solid minerals deposits, including bauxite, lithium, gold, iron ore and rare earth elements. Despite its resource endowment, the sector currently contributes less than one per cent to GDP due to infrastructure deficits, illegal mining and limited investment.
