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Revamping Ajaokuta Steel Company: Matters Arising

By Sani Adamu
The recent statement from the Minister of Solid Minerals, Dr Kayode Fayemi, about the decision of the present administration to revamp the Ajaokuta Steel Company Ltd., is inspiring and promising.
Industrialists opine that the completion of the moribund plant will accelerate the desire of Nigeria to become one of the 20th economies of the world by 2020.
They recall that the idea behind a steel project in Nigeria started in 1958 when the colonial administration inaugurated a feasibility study on iron ore deposits in the country.
In 1967, a United Nations Industrial Development Organisation survey identified Nigeria as a potential steel market which led to the signing of a bilateral agreement between the defunct Soviet Union and Nigeria.
Further to this, in1971, an extra-ministerial agency — the Nigerian Steel Development Authority –was established by Decree No.9 to actualise the establishment of a steel plant in the country.
The actual work on the Ajaokuta Steel Company began in 1979 during the administration of Alhaji Shehu Shagari and as at 1983 the work on the plant had reached 95 per cent completion.
In spite of this level of completion, the plant had suffered years of neglect under successive administrations.
Although former President Olusegun Obasanjo’s conceded the plant to Global System Steel Holdings Ltd., an Indian firm, the concession failed to revive the company.
The present status of the plant notwithstanding, Fayemi said that the Buhari’s administration was passionate about the completion of the steel project.
He spoke after a fact finding tour of facilities at the company and the National Iron Ore Mining Company (NIOMCO), Itakpe, Kogi, assuring the public that the Federal Government would soon unveil a comprehensive blueprint for the completion and rehabilitation of the two companies.
He said that the administration was taking a holistic look at the steel plant project to ensure its completion for the benefit of Nigerians.
“I want to let you know that the president is very passionate about the Ajaokuta Steel Company; we will take a look at the company holistically to make it work for the benefits of Nigerians.
“We are looking at the entire steel complex. We are not going to segment the plant. We are told that the captive power plant has been reactivated,’’ Fayemi said.
He said that government’s decision had become imperative due to dwindling fortunes of the oil sector.
According to him, the government will come up with realistic decision that will enable it to turn around as a foundation for future industrialisation of the country.
Fayemi said that government had obtained necessary information about the two companies from relevant stakeholders, noting that the facility tour was to authenticate the information.
The minister said that government was studying the experiences of steel producing countries to chart a way forward on Ajaokuta Steel Company.
“We are studying how these countries succeeded in building several plants many years after we have started our own.
“What did they do right and what we did wrong to find ourselves at the present situation; the plant will work, President Buhati is very passionate about it,’’ he said.
Irrespective of the minister’s speech, Mr Joseph Ononere, the Sole Administrator of Ajaokuta Steel Company Ltd., urged the government to call for expression of interest from experts for the rehabilitation, completion and inauguration of the steel plant.
He observed that no significant progress was made to turn around the fortunes of the company since 1994 when the Russians, being the original designers of the plant, pulled out of the project.
He pleaded with the Federal Government to ensure timely completion of the plant, saying that the minister’s visit after few months in office was a clear demonstration of government’s good intention to complete the project.
At Itakpe, NIOMCO Sole Administrator Yau Ibrahim solicited the support of the minister in the completion of some ongoing projects in the complex which he said were critical to the survival of the plant.
He stressed the need for the Federal Government to bring the case involving Ajaokuta Steel Company and NIOMCO at the Industrial Court of Arbitration in London to early conclusion.
He said that iron ore deposit at Itakpe was about 197 million tonnes which he observed would be sufficient to support production of steel at Ajaokuta Steel Company for 35 years.
“Beside the iron ore deposits at Itakpe, there is also iron ore reserve of about 60 million tonnes at Ajabanoko which is only six kilometres away from Itakpe,’’ he said.
Mr Bello Itopa, a representative of the Iron and Steel Senior Staff Association of Nigeria and Steel and Engineering Workers Union of Nigeria, pleaded with the Federal Government to act fast in revamping the company.
He said that no nation could attain economic stability and real industrial and technological advancement without massive investment in the steel sector.
To revamp the company, Mr Sanusi Mohammed, Secretary-General, African Iron and Steel Association, observed that about 1.1 billion dollars would be required.
“If the fund is released, Ajaokuta rehabilitation can be completed within three years including the external infrastructure.
“If 300 million dollars could be released from the amount required, it could be used to rehabilitate part of the company for mini production to begin,’’ he said.
He noted that 43 smaller companies with different areas of specialisation were located in Ajaokuta complex.
“If government can invest 300 million dollars for a start on Ajaokuta Steel Company, at least 25 out the 43 companies will begin operations on materials for producing cars.
“Some will produce railway steel, flat sheet and bitumen, among others. The fund generated by these 25 companies could be used to complete Ajaokuta Steel Company,’’ he said.
He recalled that the challenges facing Nigerian steel companies could be traced to lack of political will and mismanagement by the past administrations.
But Fayemi insisted that the Federal Government would not allow “international conspiracies to hinder the revamping of Ajaokuta and other steel industries in Nigeria.
“I do not want to believe that Ajaokuta cannot be viable if money is spent on it.
“International conspiracy did not stop China from becoming steel giant and India from advancing its steel industry; nothing can stop the revamping of Nigeria steel industries.
“We are the architect of our own misfortune; no international conspiracy can stop a determined nation from realising its visions and objectives’’.
He said the amount quoted to revive Ajaokuta Steel Company was exorbitant that Nigeria would need financial support to be able to produce liquid steel and other steel products.
He also said that if Nigeria began the production of steel, it would reduce foreign exchange being spent on steel importation and also create jobs locally.
He insisted that the president had saddled his ministry with the responsibility of reviving the steel industries in the country.
All in all, industrialists plead with the current administration to incorporate the original designers of the plant in its renewed efforts to revamp the company.
According to them, if the present administration revamps the steel plant, it will boost the country’s revenue.(NANFeatures)

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