The Federal Government says it has made significant progress in raising the more than N35 billion necessary to restart the Ajaokuta Steel Company’s Light Mill Section (LMS). Prince Shuaibu Audu, Minister of Steel Development, stated this during the Ministerial Sectoral Update on President Bola Tinubu’s administration’s performance in the previous year, held on Thursday in Abuja.
Audu stated that presidential clearance had been granted to raise the funds from a local financial institution as part of Tinubu’s administration’s commitment to enhance Nigeria’s economic stature.
“The local banking institution made us a final offer. I have completed a cover letter and provided the appropriate paperwork to the Minister of Finance to be able to take on the funding on behalf of the Federal Government,” he said.
He said that the LSM had the capacity to produce 400,000 metric tonnes of iron rods per year and was critical to shoring up industrialization in Nigeria. According to him, he is working closely with the minister of works to supply the iron rods needed for road construction projects in the country.
“There are so many roads being constructed in the country, about 30,000 km of roads across the six geopolitical zones.
“We understand that the ministry of works needs about seven million metric tonnes of iron rods over that four year period (first term) to construct these roads, Ajaokuta can produce 400,000 tonnes,” he said.
He said that advanced discussions were held with the Minister of Defence, who is in charge of Defence Industries Corporation of Nigeria (DICON), to revive its engineering workshop to produce military hardware to enhance security in Nigeria.
“So what is required is that we have a metallurgical development centre that has the ability to provide us with the lead and zinc required, to be able to provide and produce some of this military hardware,” he said.
Audu said that plans were ongoing to revive the Ajaokuta 110 megawatt power plant, which could supply power not only to the plant, but also to the national grid. According to the minister, due to the paucity of funds, it is engaging in a public private partnership where the asset will be used as the collateral vessel for providing financing.
He said talks were ongoing with three potential investors, which are: Transcorp Power, Niger Delta Power Holding Company, and Reticulated Global Engineering. The minister said the mandate of the ministry was to revive both the Ajaokuta Steel Company and the National Iron Ore Mining Company, and also to revive the steel industry, adding that it had engaged experts.
According to the minister, the vision is critical to the Renewed Hope agenda of the president, whose desire is to grow the economy of Nigeria to more than one trillion dollars by the end of the first term, thereby, making the country a G20 economy.
He said that a minimum of two million dollars was needed to revive Ajaokuta Steel, adding that the plan was to concession the company to people who had the competence to get the job done.
