Nigeria is gearing up efforts to diversify its economy away from crude oil. This is after the Federal Government signed a landmark Memorandum of Understanding with the African Finance Corporation (AFC) to jointly fund three strategic mining projects. These projects included a $1.3 billion alumina refinery. Nigeria’s Alumina Refinery Project will join others such as the $3.3 Billion Brass Industrial Park and Methanol Complex in elevating Nigeria’s status as a major industrial hub in West Africa.

The agreement was inked in Abuja. Furthermore, the agreement also covers a nationwide geoscience mapping initiative. Also, it involves the creation of a special investment vehicle to unlock the country’s mineral assets.

Capacity

According to a statement issued by Segun Tomori, Special Assistant on Media to the Minister of Solid Minerals Development, the refinery is designed to process about one million tonnes of bauxite annually. Additionally, the refinery will use a modern Bayer-process flowsheet, supported by an on-site gas-fired cogeneration plant for steam and electricity generation.

“The Africa Finance Corporation and the Federal Government through the Solid Minerals Development Fund (SMDF) have signed a Memorandum of Understanding to jointly fund three projects: a $1.3 billion alumina project, a comprehensive geoscience mapping exercise, and an investment vehicle to realise the goals,” the statement said.

For a very long time, Nigeria has relied on crude exports for the bulk of its foreign exchange earnings. However, policymakers have increasingly shifted to solid minerals as part of broader reforms and strategies aimed at expanding non-oil revenue streams.

Lastly, Minister of Solid Minerals Development, Dele Alake, described the deal as transformative. “This is a landmark deal, poised to transform the mining sector and increase its contribution to the nation’s GDP,” he said.

Lifespan of the Refinery

The facility is expected to operate for about 20 years at 95% utilisation, producing an estimated 19 million tonnes of alumina over its lifespan.

Projections show an annual GDP contribution of $1.2 billion, more than $25 billion in lifecycle economic value, and $8 billion in foreign exchange earnings.

Factsheet

Project Name: Nigeria Alumina Refinery Project

Total Investment: $1.3 Billion

Key Partners: Federal Government of Nigeria (via Solid Minerals Development Fund – SMDF) & Africa Finance Corporation (AFC)

Primary Technology: Modern Bayer-process flowsheet

Power Source: On-site gas-fired cogeneration plant (for steam and electricity)

Operational Lifespan: Projected 20 years at 95% utilization

Nigeria’s Alumina Refinery Project Team

Africa Finance Corporation (AFC): A multilateral financial institution that is co-funding the project. This represents the largest funding project for the AFC since its inception.

Solid Minerals Development Fund (SMDF): The Nigerian government’s investment arm for the mining sector, which signed the Memorandum of Understanding (MoU) to jointly fund the refinery.

Federal Government of Nigeria (Ministry of Solid Minerals Development): The project is a primary initiative under the Ministry’s “Seven Point Agenda” to transition Nigeria from exporting raw bauxite to domestic mineral processing.