In a significant move towards revitalizing the long-dormant Ajaokuta Steel Company, the Federal Government, led by the Ministry of Steel Development, is pushing forward with the concession process. The Minister of Steel Development, Shuaibu Audu, disclosed this during a recent interaction with journalists in Abuja, emphasizing a three-year ultimatum to kick-start operations in alignment with President Bola Tinubu’s directive.
This development follows a previous legal hurdle where a High Court in Kogi State restrained the government from the planned concession of Ajaokuta Steel Company Limited and the National Iron Ore Mining Company at Itakpe.
The Federal Executive Council’s 2022 approval of N853 million for the engagement of transaction advisors encountered staunch opposition, impeding efforts to revive the steel giant, dormant for 45 years.
Minister Audu conveyed that the three-year plan aims to initiate the production of steel within that timeframe, with a focus on getting the light steel mill and engineering workshop operational. Additionally, some production lines are targeted to operate at near full capacity or full capacity.
Addressing the concession aspect, Audu outlined, “Part of what we would also do within that three years is to concession it to a concessionaire that has the required skill set to be able to have liquid steel production coming out of blast points.” He further hinted at a concession agreement spanning a minimum of 10 to 30 years to ensure the concessionaire recoups their capital.
The minister highlighted that the comprehensive three-year road map, requiring a $5 billion investment, aims to generate 500,000 jobs and potentially accrue $10 billion in revenue. He assured stakeholders that measures are in place to avoid the pitfalls of previous administrations, with ongoing litigation being resolved.
Audu explained, “What we plan to do is to 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.” The ultimate goal is to reverse the current trend where 90% of the country’s steel demand is imported, costing over $4 billion annually.
Furthermore, the ministry is exploring collaborations with foreign investors, particularly from China, to construct new steel companies. Audu stated, “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.”
The minister envisions a future where Nigeria achieves 90% local steel production and reduces importation to 10%. This ambitious plan, backed by strategic investments and concessions, aims to bring Ajaokuta Steel Company back to life, creating economic opportunities and reducing the nation’s dependence on imported steel.