Rising from its Federal Executive Council, on Wednesday in Abuja, the Government of Nigeria has approved the engagement of transaction advisors for consultancy services for the concession of Ajaokuta Steel Company Limited.
The approval also involved the National Iron Ore Mining Complex in Itakpe, Kogi State.
The meeting was presided over by the President Muhammadu Buhari, at the council chambers of the State House, Abuja. Speaking at the State House, the Minister of Information and Culture, Lai Mohammed spoke on behalf of the Minister of Mines and Steel, Olamilekan Adegbite, saying the move breathed an air of hope in the long-abandoned piece of infrastructure.
He said “Council approved the engagement of transaction advisors for consultancy services for the concession of Ajaokuta Steel Company Limited and also the National Iron Ore Mining Complex in Itakpe in favour of Messrs CPCS Transform Consortium in the sum of N853,266,644.4 inclusive of 7.5 per cent VAT.
“I am sure we are all familiar with the history of the Ajaokuta Steel complex. The contract was awarded in 1979 to a Russian company called TPE. By the end of 1983, the contract had reached advanced stage. Regrettably, since then it has been suffering and by 1994, TPE demobilised from site and 1996, the contract was terminated.
“Subsequently, various administrations have tried to revive the Ajaokuta Steel Company without much success. However, you will recall that Mr President was on a state visit to Russia on October 22 and 24, 2019, and here it was resolved that the Ajaokuta Steel Company, which the Federal Government has made massive investment, must be resuscitated.”
He stated further that the COVID-19 pandemic slowed down the efforts of the Ministry of Mines to bring the project to fruition.
“However, today, the council has approved the award of a contract, not just for Ajaokuta, but also for the Iron Ore in Itakpe.
“We believe that with this development, we would have made significant step in bringing back to life both the Ajaokuta and the Iron Ore company in Itakpe and move forward the industrial revolution of Nigeria.
“When these two complexes begin to function, then, not only are we going to save money in terms of foreign exchange, but we are going to see a lot of industrial development and also technology transfer,” he said.
The completion of the remaining two per cent of work on the 43-year-old Ajaokuta Steel Rolling Mill, as promised by the federal government, in 2022. This, in spite of $10 billion (about N4.155 trillion) worth of investment.
Recently, Professor Ibrahim Garba who had worked on secondment at the Federal Ministry of Mines and Steel Development as Director-General, Nigeria Mining Cadastre Office said the plant’s chances of taking off are slim because it was predicated on a low-grade iron ore, an important raw material needed for the smooth operation of the rolling mill.
Buhari had approved the release of $2m for the conduct of a technical audit to ascertain the condition of the facility before the resumption of work.
Between 2015 and 2021, the government allocated a total of N20billion to the idle steel company. Based on the 2022 budget details, N4.2billion was allocated to the Steel Company Limited for the fiscal year.