Nigeria has signed a $1.3 billion agreement with the Africa Finance Corporation (AFC) to support the construction of an alumina refinery aimed at processing bauxite locally. The announcement followed the signing of a memorandum of understanding between the AFC and the Solid Minerals Development Fund (SMDF), the government agency responsible for developing the country’s mining sector.
According to official statements, the planned refinery will have the capacity to process approximately one million tonnes of bauxite per year using the Bayer process, a widely adopted method in alumina production. By refining bauxite domestically rather than exporting it in raw form, the project seeks to increase value addition within the country and strengthen Nigeria’s position in the global aluminum value chain.
Government estimates indicate that once operational, the refinery could contribute around $1.2 billion annually to Nigeria’s gross domestic product. Over an expected project lifespan of about 20 years, authorities project significant cumulative economic value, along with foreign exchange earnings generated from alumina exports.
The investment forms part of a broader strategy to diversify Nigeria’s economy. Historically reliant on oil revenues, the country has been seeking to expand its solid minerals sector to reduce vulnerability to fluctuations in global energy markets. Officials have also highlighted the potential for job creation, skills development, and industrial capacity building associated with the project.
For its part, the AFC continues to position itself as a key financier of strategic infrastructure and industrial projects across Africa. The institution has supported initiatives in energy, transport, and extractive industries, with a stated objective of promoting industrialization and regional economic integration.
At this stage, specific details regarding the final project location, construction timeline, and full financing structure have not been fully disclosed. Further technical assessments and financial structuring are expected before the project moves into its implementation phase.
The agreement nonetheless signals Nigeria’s intention to deepen local processing of its mineral resources and expand its footprint in the aluminum production value chain.
