Nigeria, AFC sign $1.3bn for strategic mining investment, to contribute $1.2bn to GDP

*The Federal Government inks a mining investment agreement with the Africa Finance Corporation for a $1.3 billion alumina refinery project, designed to operate for approximately 20 years at 95 percent utilisation, with total alumina output projected at 19 million tonnes over its lifespan in Nigeria

Gbenga Kayode | ConsumerConnect

In line with the country’s efforts at driving exploration and development across the solid minerals sector, the Federal Government has signed a mining investment agreement with the Africa Finance Corporation (AFC).

ConsumerConnect reports the joint investment deal is designed to fund three major mining initiatives, including a $1.3 billion alumina refinery project in Nigeria.

Alumina is a chemical compound extracted from bauxite. It is composed of two elements: oxygen and aluminum.

The agreement between AFC and Nigeria’s Solid Minerals Development Fund (SMDF), representing the Nigerian Government, covers a comprehensive geoscience mapping exercise and the establishment of a joint strategic investment vehicle to drive exploration and development across the sector.

Segun Tomori, Special Assistant to the Minister for Solid Minerals Development on Media, in a statement at the weekend, affirmed the refinery would utilise a modern Bayer-process flowsheet, and feature an on-site gas-fired cogeneration plant for steam and power generation.

The statement noted the agreement is the product of discussions between the two organisations to co-finance the construction of a $1.3 billion alumina refinery expected to process about one million tonnes of bauxite ore per annum.

“The facility is designed to operate for approximately 20 years at 95 percent utilisation, with total alumina output projected at 19 million tonnes over its lifespan,” the statement reads.

In his remarks at the MoU signing ceremony, Dr. Dele Alake, Honourable Minister for Solid Minerals Development (MSMD), described the deal as a landmark transaction that would transform the mining sector of the economy.

The statement further noted the output from the refinery project is expected increase its contribution to the Gross Domestic Product (GDP) in the West African country.

Alake as well affirmed the deal aligns with the Solid Minerals Ministry’s reform agenda.

The Minister also disclosed that efforts at modernising the requisite regulatory framework, and strengthening the mineral licensing regime have begun to attract significant private capital to the industry.

Highlighting the Federal Government’s commitment to fast-tracking the investments, Alake said all necessary approvals had been granted to accelerate implementation of the agreement.

He, therefore, directed relevant agencies under the Ministry to ensure seamless processing of permits, titles, and regulatory clearances.

Speaking at the event also, Mrs. Fatima Shinkafi, Executive Secretary of SMDF, said the transaction represented the agency’s largest funding project since inception.

Shinkafi stated: “We are very proud and honored to facilitate this phenomenal milestone, which is quite unprecedented since the inception of SMDF.

“It is a $1.3bn CAPEX. SMDF has come of age to be able to sit here and sign this deal with AFC.

“I thank the AFC for collaborating with us to boost the value addition policy of my boss, Dele Alake.”

In his comment on the development, Farouk Yabo, Permanent Secretary, Ministry of Solid Minerals Development, said the refinery project could position Nigeria more prominently on the global mining map.

MSMD: Project to contribute $1.2bn to Nigeria’s GDP

As regards the contribution of the project to the economy, the  Ministry of Solid Minerals said the project was projected to be the country’s largest private investment in the mining sector.

The Ministry stated that it would contribute about “$1.2 billion to GDP annually, inject over $25 billion into the national economy across its lifecycle, and generate $8 billion in foreign exchange earnings.”

According to the Ministry, initial feasibility studies conducted by the AFC and SMDF confirmed the project’s competitiveness and commercial viability, reinforcing efforts at positioning Nigeria as a globally competitive minerals destination.

The statement noted: “As part of the agreement, both parties will undertake a comprehensive geoscience mapping exercise aimed at generating mineral data, de-risking exploration for investors, and unlocking the sector’s full potential.

“AFC and SMDF also agreed to set up a joint strategic investment vehicle to accelerate the development of identified exploration assets across Nigeria, to drive rapid exploration, development, and production of selected exploration leases upon the execution of a successful exploration campaign.”

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

Samaila Zubairu, President and Chief Executive Officer (CEO) of AFC, witnessed the ceremony alongside the Minister, the Ministry said.

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