Nigeria is stepping up efforts to reduce its reliance on crude oil after the Federal Government signed a landmark Memorandum of Understanding with the African Finance Corporation (AFC) to jointly fund three mining projects, including a $1.3 billion alumina refinery.
The deal, signed in Abuja, also covers a nationwide geoscience mapping initiative and the creation of a special investment vehicle to unlock the country’s mineral assets, according to Business Insider Africa.
Segun Tomori, Special Assistant on Media to the Minister of Solid Minerals Development, said the refinery will process about one million tonnes of bauxite each year using a modern Bayer-process flowsheet.
It will have an on-site gas-fired plant to produce steam and electricity.
“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,” Tomori said.
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Nigeria has long depended on crude exports for foreign exchange, but policymakers are now focusing on solid minerals to increase non-oil revenue.
Minister of Solid Minerals Development, Dele Alake, called the deal transformative:
“This is a landmark deal, poised to transform the mining sector and increase its contribution to the nation’s GDP,” he said.
The refinery is expected to operate for 20 years at 95% capacity, producing about 19 million tonnes of alumina over its lifespan.
It could contribute $1.2 billion annually to GDP, create over $25 billion in total economic value, and generate $8 billion in foreign exchange earnings.
Africa holds 29% of global bauxite reserves but less than 1% of refining capacity. Guinea, Cameroon, and Ghana are also advancing billion-dollar refinery projects.
Nigeria, which has large bauxite deposits but has historically exported mostly raw ore, could now strengthen its role in the continent’s alumina industry.
Executive Secretary of SMDF, Fatima Shinkafi, called the agreement the fund’s largest project to date, showing growing investor confidence in Nigeria’s mining sector.
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Image Credit: The Cable
