Barring unforeseen circumstances, the Federal Government is hopeful that the Ajaokuta Steel Mill will become operational by 2022, after many decades of inactivity and over $6 billion in investment.
According to the Minister of Mines and Steel Development, Olamilekan Adegbite, a memorandum of understanding (MoU) between Russia and Nigeria is expected to be signed later this month to drive the resuscitation process.
He said: “in the next two to two and half years, Ajaokuta will kick-start. Everything to get it running is already in place, including all the raw materials required for its production process. The only thing that will be imported would be spares and tools.
Over 40 years after its establishment, Nigeria is leaning on a bilateral agreement with Russia to resuscitate the now derelict steel factory complex, which is said to be between 95 and 98 per cent completed.
Besides, to remove barriers to ease of doing business in the mining sector, especially in terms of mineral export, Adegbite, during an interaction with journalists in Lagos, yesterday, said the Ministry is in talk with the Central Bank of Nigeria (CBN), to buy up Gold produced in Nigeria off the miners.
Under the proposed policy, CBN would buy the product at prevailing international price to check the incidence of under-pricing being experienced by miners, with some quantities kept in the reserve.
Ahead of the policy take-off, he said the Ministry has issued two licences for Gold mining in Ogun and Abuja, to mitigate illegal trading of the product.
Furthermore, he said the Ministry was mulling the formation of a one-stop shop agency similar to the Department of Petroleum Resources (DPR) under the Ministry of Petroleum Resources, to address regulatory concerns and licensing issues in the minerals sector.
Adegbite explained that so much had been invested in the Ajaokuta Steel Mill for it to be neglected, adding that the Russian engineering and construction group, Metprom, will undertake the necessary work to bring the facility into operation.
He added that under the terms, the resuscitation will be financed by state-owned development institution, Russian Export Centre, to the tune of $460million, while Cairo-based, African Export-Import Bank (AfreximBank), is expected to commit about $1 billion.
When operational, he said Ajaokuta’s output would go some way to aid the realisation of Nigeria’s President Muhammadu Buhari’s plans to diversify the economy away from oil and gas, encourage local production, in addition to creating thousands of jobs.
The accord to revive the Ajaokuta project under a build-operate-and-transfer (BOT), was reached during a meeting between President Buhari and Russian President Vladimir Putin, in Sochi, Russia, last year.
Construction of the Ajaokuta Steel Complex, which was supposed to produce as much as five million metric tonnes of steel annually, began in 1979. Thousands of Russian engineers descended on Nigeria in the years that followed. However, work stalled due to government’s failure to pay the builders, Russia’s Tyazhpromexport, on schedule.
By 2004, when it was taken over by India’s Ispat Industries Ltd., the plant was yet to produce any steel. Ispat’s concession was revoked in 2008, and it took Nigeria eight years to come up with a renegotiated concession agreement. Vice President Yemi Osinbajo in 2016, called the saga “a tragedy of immense proportion.”
Adegbite said funds for the resuscitation of the steel mill are already in place, adding that a committee has been set up to kick-start the project.
He added that other measures to make the mining sector attractive to investors were also being put in place to ensure that the sector’s contribution to the Gross Domestic Product (GDP) increases.
These measures include identification of new mineral resources like Lithium, Cobalt, and others that would aid the growth and adoption of renewable in the Nigeria, as well as movement from artisanal mining to formal mining and refining of raw materials.
He also said government is increasing its expenditure on exploration for ease of access to repository where investors can identify the geo-location where certain mineral deposits can be found as well as other details about such resources.
Barring unforeseen circumstances, the Federal Government is hopeful that the Ajaokuta Steel Mill will become operational by 2022, after many decades of inactivity and over $6 billion in investment.
According to the Minister of Mines and Steel Development, Olamilekan Adegbite, a memorandum of understanding (MoU) between Russia and Nigeria is expected to be signed later this month to drive the resuscitation process.
He said: “in the next two to two and half years, Ajaokuta will kick-start. Everything to get it running is already in place, including all the raw materials required for its production process. The only thing that will be imported would be spares and tools.
Over 40 years after its establishment, Nigeria is leaning on a bilateral agreement with Russia to resuscitate the now derelict steel factory complex, which is said to be between 95 and 98 per cent completed.
Besides, to remove barriers to ease of doing business in the mining sector, especially in terms of mineral export, Adegbite, during an interaction with journalists in Lagos, yesterday, said the Ministry is in talk with the Central Bank of Nigeria (CBN), to buy up Gold produced in Nigeria off the miners.
Under the proposed policy, CBN would buy the product at prevailing international price to check the incidence of under-pricing being experienced by miners, with some quantities kept in the reserve.
Ahead of the policy take-off, he said the Ministry has issued two licences for Gold mining in Ogun and Abuja, to mitigate illegal trading of the product.
Furthermore, he said the Ministry was mulling the formation of a one-stop shop agency similar to the Department of Petroleum Resources (DPR) under the Ministry of Petroleum Resources, to address regulatory concerns and licensing issues in the minerals sector.
Adegbite explained that so much had been invested in the Ajaokuta Steel Mill for it to be neglected, adding that the Russian engineering and construction group, Metprom, will undertake the necessary work to bring the facility into operation.
He added that under the terms, the resuscitation will be financed by state-owned development institution, Russian Export Centre, to the tune of $460million, while Cairo-based, African Export-Import Bank (AfreximBank), is expected to commit about $1 billion.
When operational, he said Ajaokuta’s output would go some way to aid the realisation of Nigeria’s President Muhammadu Buhari’s plans to diversify the economy away from oil and gas, encourage local production, in addition to creating thousands of jobs.
The accord to revive the Ajaokuta project under a build-operate-and-transfer (BOT), was reached during a meeting between President Buhari and Russian President Vladimir Putin, in Sochi, Russia, last year.
