AFC, FG sign $1.3bn alumina refinery MoU, target $25bn economic impact

The Africa Finance Corporation and the Federal Government, through the Solid Minerals Development Fund, have signed a Memorandum of Understanding to jointly fund a $1.3bn alumina refinery project and other strategic mining initiatives.

The agreement also covers a comprehensive geoscience mapping exercise and the establishment of a joint strategic investment vehicle aimed at accelerating mineral exploration and development across the country.

A statement by the Special Assistant on Media to the Minister of Solid Minerals Development, Segun Tomori, said the MoU marked the culmination of months of discussions between both institutions to deepen value addition in the mining sector.

Citizen FM learnt that under the arrangement, the partners will fund the construction of a $1.3bn alumina refinery designed to process one million tonnes of bauxite ore per annum using a modern Bayer-process flowsheet.

The facility will be supported by an on-site gas-fired cogeneration plant to generate steam and power.

Alumina, a white solid and a major constituent of many rocks, especially clays, is a critical raw material in aluminium production and is also found crystallised as corundum and sapphire.

The refinery is projected to operate for about 20 years at 95 per cent utilisation rate, with total alumina output estimated at 19 million tonnes over the project’s lifespan.

Speaking at the signing ceremony, the Minister of Solid Minerals Development, Dele Alake, described the deal as a landmark in the ongoing efforts to reposition the mining sector.

He said the initiative would significantly increase the sector’s contribution to the Gross Domestic Product and strengthen Nigeria’s standing as a globally competitive minerals destination.

The statement noted that the project is expected to contribute $1.2bn annually to GDP, generate over $25bn for the national economy across its lifecycle, and earn about $8bn in foreign exchange.

The Executive Secretary of the SMDF, Fatima Shinkafi, described the agreement as the largest funding project undertaken by the agency since its establishment.

“We are very proud and honoured to facilitate this phenomenal milestone, which is unprecedented since the inception of SMDF. It is a $1.3bn CAPEX. SMDF has come of age to sit here and sign this deal with AFC. I thank AFC for collaborating with us to boost the value addition policy of the minister,” she said.

According to the statement, initial feasibility studies conducted by AFC and SMDF confirmed the project’s competitiveness and commercial viability.

The ministry said the geoscience mapping component of the MoU would generate reliable data on specific minerals, de-risk exploration for international investors and unlock the country’s mineral potential.

Both parties also agreed to set up a joint strategic investment vehicle to drive rapid exploration, development and production of selected mining leases upon successful exploration campaigns.

The Permanent Secretary of the ministry, Farouk Yabo, commended the initiative, describing it as a testament to the minister’s reform agenda.

Alake, while commending AFC and SMDF for aligning with the ministry’s seven-point agenda, said reforms had secured the investment environment, modernised the regulatory framework and established a mineral licensing regime that is attracting private sector capital.

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

At the ceremony, Shinkafi signed on behalf of the Federal Government, while Franklin Edochie, Deputy Director and Head, Metals and Mining at AFC, signed for the corporation.

The President/Chief Executive Officer of AFC, Samaila Zubairu, witnessed the signing alongside the minister.