Africa's richest man signs massive equipment deal with China's XCMG to double his refinery's capacity by 2029

Aliko Dangote, Africa's richest man, has signed a major equipment procurement deal with XCMG, one of China's largest heavy machinery and construction equipment manufacturers, targeting the doubling of the Dangote Petroleum Refinery's current 650,000 barrel-per-day capacity to approximately 1.3 million barrels per day by 2029, a move that would make the Lekki facility the world's single largest crude oil refinery by processing capacity.

The deal, confirmed by Africa.com on June 27, 2026, represents a significant capital commitment to the second phase of the refinery's expansion, which Dangote Group had been signalling to investors and analysts for several months. The partnership with XCMG, whose full name is Xuzhou Construction Machinery Group and which is among the world's ten largest construction and heavy equipment manufacturers by revenue, gives Dangote access to Chinese manufacturing capacity and engineering expertise at a scale and speed that would be difficult to replicate through European or American suppliers at comparable cost.

The refinery, located in the Lekki Free Zone in Lagos and built over more than a decade at a total investment of approximately $25 billion, began operations in early 2024 and has already transformed Nigeria's energy landscape in ways that few industry observers expected to happen so quickly. The facility has pushed Nigeria from net petroleum importer to net petroleum exporter for the first time in decades, supplied more than 95 percent of the country's aviation fuel, exported refined petroleum products to multiple West and Central African markets and delivered jet fuel to European buyers during disruptions to Middle East shipping routes. Dangote has publicly stated that the refinery alone is worth more than $40 billion, a valuation significantly higher than the Bloomberg Billionaires Index's current mark for the asset.

The capacity expansion to 1.3 million barrels would not only reinforce the refinery's position as Nigeria's central petroleum processing infrastructure but also transform it into a genuinely global export facility capable of competing with refineries in Saudi Arabia, South Korea and the United States Gulf Coast as a supplier of refined petroleum products to markets across Africa, Europe and beyond. At that scale, the refinery's economics would benefit from operating leverage that further reduces the cost per barrel of output, strengthening both the commercial case for the expansion and the valuation argument Dangote has been making to investors considering participation in the planned initial public offering.

The IPO of the Dangote Petroleum Refinery, which Dangote has described as a landmark for the Nigerian Exchange and which could value the refinery at anywhere from $40 billion to significantly more depending on production ramp and market conditions, remains the single most anticipated capital markets event in Nigeria's history. Dangote told the American business publication Semafor this week that the IPO would be a landmark for the Nigerian Exchange, signalling that the listing remains on track and that investor interest in participating at a private placement level ahead of the public offering has been substantial, with demand already approaching $2 billion from institutional investors seeking pre-IPO exposure. The XCMG deal, by extending the refinery's growth runway to a 2029 expansion, adds a long-term capital appreciation argument to what is already a compelling cash flow story at current production levels.

XCMG is headquartered in Xuzhou in Jiangsu Province and is a state-controlled enterprise, which gives the Dangote-XCMG partnership a semi-sovereign dimension that may smooth the equipment financing and delivery logistics. Chinese state-linked manufacturers have become increasingly active in African infrastructure and industrial projects over the past decade, and the XCMG partnership extends a pattern of Chinese capital and technology partnership that has characterised several of Dangote Group's most significant infrastructure investments.