Ajaokuta Requires $2bn to Revive Operations, Says FG

Kayode FayemiGovernor, Dr Kayode Fayemi
  • Ajaokuta Requires $2bn to Revive Operations

The Federal Government has said that to get the Ajaokuta Steel Complex to produce at full installed capacity requires an investment of $2bn.

The Minister of Mines and Steel Development, Dr. Kayode Fayemi, was quoted to have said this in a publication of the ministry obtained by our correspondent in Abuja on Tuesday.

At the installed capacity, the steel mill, constructed by the Russians in 1979 but never inaugurated, can produce five million metric tonnes of steel per annum.

Under the privatisation programme of the Federal Government, the Ajaokuta Steel Complex was given out on concession to an Indian firm, Global Steel Holdings Limited, for $300m.

Following allegation of asset stripping by the Indian firm, the concession was cancelled by the late President Umar Yar’Adua on April 1, 2008.

Consequently, the GSHL approached the International Court of Arbitration for arbitration against the Federal Government.

However, anchoring one leg of its diversification programme on solid minerals development, the present administration secured an out of court settlement that saw GSHL withdrawing its suit, while the government conceded to it the right to operate the Nigerian Iron Ore Mining Company, Itakpe, an iron ore feeder plant to Ajaokuta.

It is not clear how the Federal Government plans to fund the revival of the steel complex but a group of protesters had demonstrated in Abuja last week, calling on it to revive the company.

The protesters called on President Muhammadu Buhari to cancel every dealing with the Indian firm. They also asked the President to hold a bilateral talk with the Russian President, Vladimir Putin, arguing that it was better to relate with the ones that built the complex rather than initiate a new romance with China on the steel complex.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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