Nigeria signs $1.2 billion gas deal to revive aluminium smelter ALSCON

Nigeria has signed a $1.2 billion agreement with the Chinese state-owned China National Chemical Engineering Corporation (CNCEC) to revamp a gas processing facility critical restarting the inactive aluminium smelter, Aluminium Smelter Company of Nigeria (ALSCON), according to the Petroleum Ministry.

The contract, signed with CNCEC and the BFI Group—the primary investor in ALSCON, in Ikot Abasi, Akwa Ibom state —marks a significant step towards reactivating the dormant smelter, which has faced years of setbacks due to legal and financial challenges.

Under the agreement, CNCEC will work to restart the 135-million standard cubic feet per day gas processing plant, a critical component of ALSCON’s operations. Once fully functional, ALSCON has the capacity to produce 300,000 tons of aluminium annually.

Minister of State for Gas, Epkerikpe Ekpo, highlighted the project’s potential to advance Nigeria’s aluminium industry, positioning the country “as a major producer of aluminium in Africa and globally.” The facility is projected to produce up to one million tons of aluminium annually and generate 540 megawatts of electricity.

The agreement follows the government’s announcement in September of its intent to revive ALSCON. During a visit to CNCEC’s headquarters in Beijing, Nigerian officials, including members of BFI Group, discussed the revitalization of the smelter.

Learn More

In July 2023, Nigeria initiated talks with Russian aluminium giant Rusal to explore restarting ALSCON in Ikot Abasi, Akwa Ibom state.

Production at the smelter was halted over a decade ago due to economic losses and supply issues. In 2012, ALSCON produced 22,000 tons of aluminium, just 11% of its capacity, before operations were suspended.

Vice President Kashim Shettima has reaffirmed Nigeria’s commitment to ALSCON’s revival, emphasizing its economic significance.

Speaking at the Russia-Africa summit in St. Petersburg, Shettima underscored the government’s urgency, stating, “The sooner we get this plant back to production, the better for everyone. We need to walk the talk; the Nigerian people deserve better.”

Rusal, which holds an 85% stake in ALSCON, has engaged in discussions with Nigeria on the potential reopening of the plant, although specific details remain confidential. The Nigerian government retains the remaining 15% stake in ALSCON.

The smelter’s revival is expected to create jobs, stimulate the local economy, and enhance Nigeria’s export capacity and government revenue.