The Federal Government, through the Ministry of Steel Development, is going ahead with the concession process for the moribund Ajaokuta Steel Company as part of efforts to hasten its revival.
It also hinted at a three-year ultimatum to kick-start operations and production of steel in line with President Bola Tinubu’s directive.
The Minister of Steel Development, Shuaibu Audu, disclosed this during an interaction with journalists on Friday in Abuja.
This comes barely a year after a High Court in Kogi State restrained the government from a planned concession of the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company at Itakpe.
In 2022, the Federal Executive Council, under former President Muhammadu Buhari, approved the engagement of transaction advisors for consultancy services in the sum of N853m for the concession of the steel company.
The move met with heavy opposition and stalled efforts to revive the steel company, which has been moribund for 45 years.
But Audu, speaking during the interview, said the planned concession is part of a three-year road map to revamp the steel company and reverse an ugly trend of 90 percent steel importation into the country.
He said, “About the three-year plan for Ajoakuta Steel and whether we should assume that it would start working, I think the short answer is yes.
“The three-year plan is to enable us to start production of some form of steel in the next three years, so we should be able to get the light steel mill working, the engineering workshop working, and some of the line plants working and operating at near full capacity or full capacity.
“Part of what we would also do within those three years is to concession it to a concessionaire that has the required skill set to be able to have liquid steel production come out of blast points. Ideally, in a perfect scenario, that’s what we would like.
“And I suspect that the concession agreement to be worthwhile for the concessionaire would have to be a minimum of, let’s say, a 10- or 30-year agreement where they would be able to recoup their capital.”
According to him, the implementation of the road map, which requires an investment of $5bn will create 500, 000 jobs and a possible revenue of $10bn.
Audu added that the ministry is considering all available options with stakeholders to avoid the misdeeds of previous administrations, adding that ongoing litigation has been resolved.
The minister added, “Based on the advice I’ve been provided with and based on some of the data that I’ve seen and the technical analyses that have been done, we would need between $2bn and $5bn to revive this entire Ajaokuta Steel Complex, but certain things can be done piecemeal before we resolve the entire issue with the plant.
“What we plan to do is restart the Light Steel Mill section, which will cost us about N35 billion for us to be able to produce 50,000 metric tonnes of iron rods. When we achieve all of these, we expect to bring $10bn into the economy and 500,000 direct and indirect jobs for Nigerians. Right now, 90 percent of our steel demand is imported, and we spend in excess of $4bn annually on the importation of steel. We are going to reverse that trend.”
The minister also stated plans to commence the construction of new steel companies through foreign investors from China in order to meet local production demands.
“We have also engaged with foreign investors to start new steel plants in the country. We have met with Chinese investors to look into how to set up a new steel plant in Nigeria, and I am sure all of these plans will come to fruition soon.
“Part of what we need to do for this is identify a new location. Would it be a green field location or a ground field location that has enough land mass with the needed infrastructure? Ideally, what we intend to get is 90 percent local production and 10 percent import,” he said.