The Nigerian government, through its Ministry of Steel Development, has made an important agreement with a group of companies from Russia. This agreement will help to repair, finish, and run the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company (NIOMCO).
The deal was signed during a visit to Russia led by Prince Shuaibu Abubakar Audu, who is the Minister of Steel Development. This is a big step for Nigeria’s steel industry.
The group of companies includes Tyazhpromexport (TPE), Novostal M, and Proforce Manufacturing Limited. They will be working on making the steel industry in Kogi State better.
The statement from the government says: “The Federal Government of Nigeria through the Honourable Minister of Steel Development, Prince Shuaibu Abubakar Audu who led a Nigerian delegation to Moscow, Russia from 14th – 21st September, 2024, on a working visit, has signed a Memorandum of Understanding (MoU) with the original builders of Ajaokuta Steel Plant Messrs, Tyazhpromexport (TPE) and members of their consortium namely; Novostal M and Proforce Manufacturing Limited for the Rehabilitation, Completion and Operation of Ajaokuta Steel Plant (ASP) and National Iron Ore Mining Company (NIOMCO) in Kogi State, Nigeria.”
Companies Checked Nigerian Facilities in August 2024
Before signing the MoU, the Russian companies visited the steel and iron ore mining sites in Ajaokuta and Itakpe in August 2024.
Prince Shuaibu said that this project supports President Bola Tinubu’s plan to make Nigeria’s industry stronger and to stop spending so much money to buy steel from other countries. Nigeria spends about $4 billion each year on imported steel.
By getting the Ajaokuta Steel Plant (ASP) and NIOMCO back to working condition, Nigeria hopes to create many jobs and save money that is usually spent on importing steel.
This project might create over 500,000 jobs and add billions of dollars to Nigeria’s economy. It will also help President Tinubu’s plan to reach a $1 trillion economy by 2030.
During their visit to Russia from September 14 to 21, 2024, the Nigerian team met with important people like Mr. Alexey V. Gruzdev, the Deputy Minister of Industry and Trade of Russia. They also visited Novostal M’s modern facility in the Saratov region.
The plant can make 1.2 million metric tonnes of steel every year, showing that the consortium is ready to keep their promise in the MoU. The Russian partners, like Mr. Egorov Sergei Anatolevich, the General Director of TPE, and Mr. Adetokunbo Ogundeyin, the General Manager of Proforce, promised to make the project successful. They also asked the Nigerian government to help make things run smoothly.
Dr. Chris Osa Isokpunwu, the Permanent Secretary of the Ministry of Steel Development, confirmed Nigeria’s strong commitment to the project, hoping it will help the country’s industry and economy grow.
Important Things to Know
In the past, under the government of Muhammadu Buhari, there were plans to sign an agreement with a Russian company to fix the Ajaokuta Steel Rolling Mill in 2020.
A Russian company called MetProm Group had inspected the Ajaokuta Steel Complex. But the agreement was delayed because of the COVID-19 pandemic, which slowed down business around the world.
Earlier this year, it was reported that the Nigerian government set aside N4.45 billion for the Ajaokuta Steel Company in the 2024 budget.
The government is also looking for N35 billion from funding agencies to bring back the light steel mill in the Ajaokuta Steel Plant, which has not been used for over 42 years.
The Minister of Steel Development, Shuaibu Audu, said that fixing the Ajaokuta steel mill might cost between $2 billion to $5 billion.