Nigeria targets $25bn from mining sector through $1.3bn AFC investment deal

Nigeria has strengthened its push to reposition the mining industry with the signing of a $1.3bn investment agreement between the African Finance Corporation and the Federal Government through the Solid Minerals Development Fund.

The deal, concluded in Abuja after extensive negotiations, will fund three major initiatives: the development of a $1.3bn alumina refinery, a nationwide geoscience data-mapping programme, and the creation of a special investment vehicle to accelerate exploration and mineral asset development.

At the heart of the agreement is the proposed alumina refinery, designed to process approximately one million tonnes of bauxite annually. The plant will utilise a modern Bayer-process flowsheet and be supported by an on-site gas-fired cogeneration facility to provide steam and power.

According to government projections, the refinery is expected to operate for about 20 years at 95 per cent capacity utilisation, producing an estimated 19 million tonnes of alumina over its lifecycle.

Minister of Solid Minerals Development, Dele Alake, described the agreement as a turning point for Nigeria’s mining sector, noting that it aligns with the Federal Government’s broader strategy to diversify the economy beyond crude oil.

He said the project is projected to contribute about $1.2bn annually to Nigeria’s Gross Domestic Product and generate over $25bn in economic value throughout its lifespan, alongside an estimated $8bn in foreign exchange earnings.

Officials stated that feasibility studies undertaken by AFC and SMDF confirmed the project’s commercial viability and global competitiveness, positioning it as one of the largest private-sector mining investments in Nigeria’s history.

Beyond refining capacity, the partnership also prioritises strengthening Nigeria’s geological data infrastructure. A comprehensive geoscience mapping exercise will be conducted to generate reliable, up-to-date data on the country’s mineral resources.

Industry stakeholders have consistently cited the lack of credible geological data as a key obstacle to attracting large-scale mining investment. The mapping initiative is expected to reduce exploration risks, improve transparency, and enhance Nigeria’s standing as an investment destination for global mining firms.

The agreement further provides for the establishment of a joint strategic investment vehicle that will finance high-potential mining projects from exploration through to development and production. The structure is intended to fast-track the commercialisation of viable mineral deposits across the country.

Executive Secretary of SMDF, Hajia Fatima Shinkafi, described the agreement as the most significant undertaking by the fund since its establishment, noting that it demonstrates growing investor confidence in Nigeria’s mining reforms.

The signing ceremony was attended by senior government officials and AFC executives, including AFC President and Chief Executive Officer, Samaila Zubairu. Franklin Edochie, Deputy Director and Head of Metals and Mining at AFC, signed on behalf of the corporation.

The initiative comes amid intensified efforts by the Federal Government to expand the contribution of solid minerals to the national economy. Nigeria is endowed with substantial deposits of bauxite, lithium, gold, iron ore and rare earth minerals. However, the sector currently accounts for less than one per cent of GDP, constrained by infrastructure gaps, illegal mining and limited access to capital.

Authorities say ongoing reforms – including improved licensing processes, tighter site monitoring and a stronger emphasis on value addition – are aimed at transforming the sector into a major pillar of economic growth.