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Scraping, abandoning Ajaokuta steel coy will be a waste — D-G

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Prof. Linus Asuquo, the Director-General, National Metallurgical Development Centre (NMDC), says scraping or abandoning Ajaokuta Steel Company will be a great waste.

Asuquo made the observation while addressing newsmen on Monday in Abuja.

He said that reviving the steel company would be the best option for the country rather than neglecting the project to waste year on year.

He said that lots of money had been spent on the construction of the magnificent Complex,  while  abandoning it would be suicidal.

“We should not play with Ajaokuta Steel Company; I think a lot of politics has been played on it over the years, the amount spent on importation of metals on yearly basis by Nigeria is huge.

“We are spending billions of naira to import metals being used for our railway construction, if we have Ajaokuta steel company working, there will be no need importing steel.

He said that the company could create massive jobs for the youth, generate power for the country, among others if revived.

He also said that materials such as iron ore for producing steel were available across the country in large quantum.

Asuquo said that coal and iron ore needed for iron making had been researched by NMDC, adding that only foreign coal would be needed to blend with Nigeria coal for steel making.

 “Coal is one of the materials needed for iron making and lots of research have been done on that by the centre.

“Unfortunately, even though we have coal in abundance such as Enugu coal, our coal are not prime for coking coal being used for steel making; what I mean is that we cannot have 100 per cent coke from our coal.

“From our research, we can blend Lafia Obi coal with imported coal for our coke for steel production.

“I will not agree with some Nigerians that said that our  blast furnace for steel production is now obsolete; it can still produce steel; Russia and India are still using blast furnace, we can modify it into sections to function adequately.

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Experts kick against plan to use British firm to revive Ajaokuta steel firm

Experts in the steel industry have kicked against the Federal Government’s option to engage a British firm to revive Ajaokuta Steel Company.

The stakeholders on Thursday in Abuja said using a British firm to revive Ajaokuta steel would cause more problems on the company.

They said TyazhpromExport (TPE), a Russian company started the foundation and construction of the steel company in 1978 to its current stage, adding that engaging a British company to complete the project was not the best option.

The experts were reacting to a recent announcement made by the Minister of Mines and Steel Development, Mr Olamilekan Adegbite, that a British company would be engaged to complete Ajaokuta steel company.

Adegbite had at a recent ministerial media briefing in the Villa said that the option to use British firm to revive the steel company “for free”, the decision came after the outbreak of war between Russia and Ukraine.

The minister also said that the arrangements with the Russian firm failed because the contract was awarded to a company with both Russian and Ukrainian interests.

The minister had in 2020 said that a 60-man team from Russia would arrive in Nigeria to start technical audit of Ajaokuta steel.

The agreement on how to revive the steel company was reached during a meeting between President Muhammadu Buhari and President Vladimir Putin in Russia in 2019 at the Russia-Africa Summit in Sochi.

The Russian government had nominated TPE, the original builder of Ajaokuta Steel Company, to conduct technical audit of the steel company to ascertain the level of work remaining to be completed on the steel company.

Prof. Benjamin Adewuyi, the former President, Nigeria Metallurgical Society (NMS) said engaging a British firm to revive the steel company “is as good as burying the company forever”.

Adewuyi said that every work done on the steel company were handled by the Russia engineers only and all core equipment used for the project were provided by the same Ressian company.

The Don said that Ajaoluta steel may end up being cannibalised the same way the National Iron Ore Mining Company (NIOMCO)  in Itakpe, kogi was cannibalised by the contractor that it was awarded to for services.

” We know what happened at NIOMCO, how it was cannibalised by the contractor that the project was awarded to, the contractor went away with valuable  equipment belonging to the company.

” Handing Ajaokuta steel company to a British firm is just like handing over our big asset to them to incur more problems on the company.

” A Russian company, the original builder of the Ajaokuta steel knows the nitty – gritty of the project and how to revive the steel company,

“Why engaging a British firm, did the Russian firm say it is not coming to revive Ajaokuta steel again?

“Agreement is agreement, has Russia cancelled the agreement it signed with the Nigeria government in 2019 to take the audit report of the company and complete the steel plant?

“The fact is that there are some “so called Nigerians” that are not in line with the agreement, the ongoing war between Russia and Ukraine should not be used as an excuse on Ajaoluta revival,” he said.

The  British firm turn around maintenance and installations done by the Russians from the onset with all units and component up till manual written in Russian language?

Russian firm took pre-emptive measures to ensure everything around the steel company is through them and them only; the entire schematics have Russian inscriptions and manuals and operators needed to be solely trained by Russians to operate them.

The core operational resources used in the production chain line could only be supplied by the Russian; no other nation on earth has these highly specialised resources and components.

Mr Ocheri Cyril, the Publicity Secretary of NMS, said engaging a British firm to revive the company might compound more problems on the moribund Industry.

“I was not surprised to hear that Ajaokuta steel will not be completed as promised by the Federal government.

“It is a pity that a gigantic investment such as Ajaokuta steel company that the foundation was laid in 1978 on 24,000 hectares has gone through several set back under past administrations.

” The company suffered under Obasanjo  administrations when it was concessioned to Global Infrastructure Nigeria Limited (GINL), an India company.

“The concession generated lots of problem whereby the company sued Nigeria government in court of abitration in London, I guess the case is still pending.”

He advised the Federal government to leave the steel company in it current form, instead of using British company to distabilised it in the name of reviving it.

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Neglect of Ajaokuta steel company worries Senate

The Senate Committee on Solid Minerals, Mine, Steel Development and Metallurgy has decried the neglect of Ajaokuta Iron and Steel Project by non-provision of required budgetary votes on yearly basis.

Chairman of the committee,  Sen. Tanko Al- Makura, made this known during the budget defence for Ministries Departments and Agencies (MDAs) on Monday in Abuja.

He said that the yearly ritual called budget is garbage in and garbage out, which according to him would not take the country to anywhere on true economic diversification.

“The type of budgeting process being carried out in this country over the years is stereotypical one . It is wrong for budget to be conceptualised in the ministry, enveloped and forwarded to the National Assembly for approval , ” he said.

In his contribution, Sen. Smart Adeyemi ( APC Kogi West ) said that “how on earth would a minister propose N82 billion for procurement of mosquitoes net and a sector as important as the solid minerals get N10 billion?”

Adeyemi lamented that Ajaokuta Iron and Steel Complex that could give jobs to about 50, 000 Nigerians is lying fallow in a country with army of unemployed youths.

“Nigeria is bleeding from this envelope form of budgeting riddled with repetition of line items and allocations on yearly basis.

” Government may be building infrastructure but building infrastructure is not as good as creating wealth through diversification of the economy.

“The best way of doing this is to remove whatever bottleneck hindering continuation of work on the complex and get it completed, ” he said.

The Minister of Mines and Steel Development, Mr Olamilekan Adegbite, was represented by his Minister of State, Dr Uchechukwu Ogah.

In his presentation, he said that, out of the N23.4 billion budget profile for the ministry in 2022, N10 billion was for personnel cost , N1.47 billion for overhead cost and N11 billion for capital projects.

The minister said that the envelope budgeting was not the creation of the ministry as it affected other government agencies.

“My appeal to you distinguished senators on the current model of budgeting is for the National Assembly to seek the attention of the President.

“Operating with envelope as far as yearly budget is concerned doesn’t make one think out of the box,” he said.

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Equity partnership, game-changer for Ajaokuta

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Tanko Mohammed

 The Minister of Mines and Steel Development, Mr Olamilekan Adegbite, has recommended equity partnership as a way of optimising the economic potential of the Ajaokuta Steel Rolling Plant when it becomes operational.

Adegbite gave the recommendation in in Abuja and revealed that an investment group had already indicated interest to go into equity with the Federal Government to provide necessary funding for the plant.

“Equity partnership will be the best deal for Nigerian as regards Ajaokuta Steel Rolling Plant, if it comes to fruition. It is a game-changer.

“Some investors have already proposed to bring in funds to fix Ajaokuta but the debt will not be on Nigeria. It will be on the company.”

The minister explained that there were other proposals that would enable investors to run the steel plant for an agreed number of years before handing it over to Nigeria.

He noted that equity partnership would also develop and enhance local content at the plant.

“That is the first plan. The option of equity partnership is a good one. A group is already asking to come into equity with us. The investors will come in with their equity and value the plant and then buy into it.

“We will have foreign investors partnering with local investors to buy into the plant, while government retains a golden share by overseeing its operations.

“The equity option is still at its early stage and it remains the best option for the plant.”

The minister said that infrastructure that would support operations of the plant were already in place and that the blast furnace, which the plant is designed to use, remained the best way to produce steel in large stock.

“When the plant was being built, an iron ore company was developed at Itakpe, to feed the plant and a rail line was laid from Itakpe to Ajaokuta for transportation of the iron ore.

“The plant was designed to use the blast furnace, which is an older but more effective method of producing steel, when compared to the arc furnace.

“President Muhammadu Buhari has shown serious commitment to ensure that Ajaokuta Steel Rolling Plant is operational,” said Adegbite.

The Ajaokuta Steel Company is one Nigeria’s foremost industrial projects. It was conceived, following the discovery of iron ore and coal deposits in commercial quantities in Nigeria in the 1970s.s

The Steel complex was built with a capacity to produce 1.3 million tonnes of steel every year.

It was designed and built as an integrated plant by the Russian Steel Company, Tyazhprom Export in 1976 after reaching an agreement with the Nigerian government.

In 1983, the plant had reached 95 per cent completion and was inaugurated by President Shehu Shagari.

The agreed plan was that the remaining five per cent of the project would be financed, using profits generated by the company.

However, after almost four decades of several concessions and legal disputes, the plant has yet to become operational.