Abuja, May 23, 2024 – The federal government has secured the agreement of the original builders of Ajaokuta Steel Mill to return to site and complete the project.
Shaibu Audu, the Minister of Steel Development, disclosed this on Thursday at the Ministerial Briefing on one year anniversary of President Bola Tinubu.
He said the contractors were ready to put down $2 billion needed to fund the project which has been in comatose in the last 40 years.
“We have initiated a discussion with the original builders of the steel plant to come back to complete the job.
“The original builder has shown willingness and desire to help us complete the project bringing in the funding and using a structure that will be acceptable,” he said.
The minister also said that there were many reserve bidders waiting in the wings, including Chinese, Arab and Indian companies. He said some Nigerian-owned companies were also interested.
He said the consortium that the Russian company was leading also included Nigerian companies and so we were factoring in local content in the entire conversation.
Audu said the revival of the moribund steel company had been a major priority of the president on assumption of office.
“This is very critical for the Renewed Hope Agenda of Mr President whose desire is to grow the economy of the Federal Republic of Nigeria over one trillion by the end of the first term of this administration, thereby making us a G20 economy.”
“The steel sector will play an important role in ensuring that this administration achieved that.
“So, we have started to put very concrete and immense measures in place to achieve that.
“The first thing that we have done to achieve this is to obtain presidential approval to raise private capital to restart the line section of the Ajaokuta steel company.
“We are at the final stages of raising over N35 billion from local financial institutions, which is around $25 million dollars to be able to restart the line section of the complex so that we can produce the iron ore.
“The line section has the capacity to produce 400,000 metric tonnes of iron rods
“I have been discussing closely with the Minister of Works, David Umahi so that we can provide iron rods.
“Part of what we are doing, we know that the Ministry of Works needs about 7 million metric tonnes of iron over that four-year period.
“Ajaokuta can produce 400,000 tonnes of rods, which is a drop in the ocean of what is required.
“Because it is an important asset, the President is keen on us getting Ajaokuta to work and getting some of these iron rods that are required by the federal government.
“So, this N35 billion we are raising will help us revive the light steel and up to 50,000 of iron rods.
“A financial institution has given us an offer, in which I have done a cover letter and forwarded the relevant documents to the Ministry of Finance to be able to take the financing on behalf of the Federal government using a promissory note so that it can get back to iron rod production. “
He said his ministry was in talks with the military and the Minister of Defence on leasing one of the engineering workshops in Ajaokuta for the production of military hardware for the military to enhance our security situation. (GBN)
