AFC–FG Partnership Targets Refinery, Nationwide Mineral Mapping and New Investment Vehicle…
Nigeria has taken a major step toward repositioning its mining industry, signing a landmark investment agreement with the African Finance Corporation (AFC) to jointly fund three strategic projects including a $1.3 billion alumina refinery expected to become the largest private investment in the country’s mining sector.
The agreement, executed in Abuja between AFC and the Federal Government through the Solid Minerals Development Fund (SMDF), follows months of negotiations and signals growing investor confidence in ongoing reforms within Nigeria’s solid minerals space.
At the heart of the deal is the construction of a world-class alumina refinery designed to process roughly one million tonnes of bauxite annually. The plant will operate using a modern Bayer-process flowsheet and will be supported by an on-site gas-fired cogeneration facility to provide steam and electricity.
A 20-Year Industrial Bet
Officials say the refinery is structured for about 20 years of operations at 95 percent capacity utilisation, with total alumina output projected at 19 million tonnes over its lifespan.
Government projections estimate the project could contribute approximately $1.2 billion annually to Nigeria’s Gross Domestic Product, generate more than $25 billion in cumulative economic value, and deliver up to $8 billion in foreign exchange earnings over time.
Feasibility studies conducted by AFC and SMDF reportedly confirmed the commercial viability and global competitiveness of the investment, positioning it as a potential flagship foreign direct investment in the sector.
Speaking at the signing ceremony, the Minister of Solid Minerals Development, Dele Alake, described the agreement as a turning point for the industry.
“This is a landmark deal poised to transform the mining sector and significantly increase its contribution to the nation’s GDP,” he said, stressing that the project aligns with the government’s broader value-addition policy.
Beyond Refining: Mapping Nigeria’s Mineral Wealth
In addition to the refinery, the partnership includes a comprehensive nationwide geoscience mapping programme aimed at generating reliable, bankable data on Nigeria’s mineral deposits.
Industry experts have long cited the absence of credible geological data as one of the biggest obstacles to attracting large-scale mining investment. By creating detailed mineral datasets, the government hopes to de-risk exploration, improve transparency, and unlock untapped reserves.
Nigeria is known to hold substantial deposits of bauxite, lithium, gold, iron ore and rare earth minerals. Yet despite this resource base, the mining sector currently contributes less than one percent to GDP — weighed down by infrastructure deficits, illegal mining and weak historical investment.
Officials say the mapping initiative is intended to change that narrative by providing the data backbone required to draw serious international capital.
New Investment Vehicle to Fast-Track Exploration
The third component of the agreement establishes a joint strategic investment vehicle that will accelerate exploration and development of selected mining leases across the country. The vehicle is expected to finance exploration campaigns and transition viable assets quickly into production.
The Executive Secretary of SMDF, Fatima Shinkafi, described the agreement as the most significant undertaking since the fund’s creation.
“This is a $1.3 billion capital expenditure project unprecedented in the history of SMDF,” she said, noting that the fund has now reached a stage where it can structure and execute large-scale transactions alongside international partners.
On behalf of AFC, the agreement was signed by Franklin Edochie, Deputy Director and Head of Metals and Mining, in the presence of AFC President and CEO Samaila Zubairu and senior government officials.
Government Promises No Bottlenecks
To underscore the administration’s commitment, Alake confirmed that all necessary approvals had been granted to fast-track implementation.
He directed agencies under the ministry to ensure seamless processing of permits, mining titles and regulatory clearances, declaring that unnecessary bureaucratic delays would no longer be tolerated.
Permanent Secretary Farouk Yabo described the partnership as further evidence that reforms in the sector are gaining traction and beginning to attract serious private capital.
A Test of Nigeria’s Diversification Drive
The agreement comes as Nigeria intensifies efforts to reduce its dependence on crude oil revenues by expanding the solid minerals sector. Recent reforms have included tightening security at mining sites, modernising licensing processes and promoting domestic value addition instead of raw mineral exports.
If successfully implemented, the AFC–SMDF partnership could become a template for large-scale mining investments in Nigeria and a critical test of whether policy reforms can translate into sustained foreign direct investment.
For a country seeking new engines of growth, the refinery, mapping programme and investment vehicle together represent more than a deal on paper they may signal the beginning of a new chapter for Nigeria’s mineral economy.
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