FG partners AFC on $1.3bn alumina project to boost solid minerals 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 fund three major initiatives: a $1.3 billion alumina project, a comprehensive geoscience mapping exercise, and a strategic investment vehicle.

The alumina project, upon completion, is expected to produce at least 1 million tonnes of bauxite ore per annum, utilising a modern Bayer-process flowsheet with an on-site gas-fired cogeneration plant for steam and power.

Speaking at the signing ceremony, Dele Alake, Minister of Solid Minerals Development, described the MoU as a landmark deal poised to transform the mining sector and increase its contribution to the nation’s Gross Domestic Product (GDP).

He explained that the facility is designed for approximately 20 years of operation at 95 percent utilisation, with total alumina output projected at 19 million tonnes over the project’s horizon.

Commending the AFC and SMDF for their commitment to the seven point agenda, Alake noted the significant gains delivered by the Ministry’s reform programme.

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He stated that the reforms have secured the investment environment, modernised the regulatory framework, and established a world-class mineral licensing regime currently attracting serious private sector capital.

Demonstrating the Federal Government’s resolve to accelerate the sector’s development, the Minister confirmed he has granted all necessary approvals to fast-track the AFC–SMDF investments. He further directed relevant agencies under the Ministry to ensure the seamless processing of all requisite permits, titles, and regulatory clearances.

The project is expected to contribute $1.2 billion to GDP annually, over $25 billion to the national economy across its lifecycle, and generate $8 billion in foreign exchange earnings.

“Initial feasibility studies conducted by AFC and SMDF have confirmed the project’s competitiveness and commercial viability, validating the Ministry’s efforts to position Nigeria as a globally competitive minerals destination,” a statement signed by Segun Tomori, Special Assistant on Media to the Minister, noted.

In her remarks, Fatima Shinkafi, Executive Secretary of the SMDF, expressed delight at the feat, stating it represents the agency’s largest funding project since its inception.

“We are proud to facilitate this phenomenal milestone. With a $1.3 billion CAPEX, the SMDF has come of age to be able to sign this deal with the AFC. I thank the AFC for collaborating with us to boost the value-addition policy of the Minister,” Shinkafi added.

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Both parties also agreed to set up a joint strategic investment vehicle to accelerate the development of identified exploration assets across Nigeria, driving rapid production upon the execution of successful exploration campaigns.

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