By Chesa Chesa
Between $2 billion and $5 billion is needed to fully resuscitate the Ajaokuta Steel Mill in Nigeria that has been dormant for 45 years, says Minister of Steel Development, Shuaibu Audu.
However, restarting only the light steel section of the mill is estimated to cost around N35 billion (about $80 million), he said while addressing journalists shortly after his meeting with President Bola Tinubu at the Presidential Villa in Abuja on Thursday.
According to the minister, Tinubu has approved fundraising locally to restart and rebuild the light steel mill.
He said this mill could produce about 400,000 tons of iron rods out of the 7 million tons needed for the federal roads construction project.
He said “Mr. President gave me approval towards the end of last year to raise some money to restart and rebuild the light steel mill of the Ajaokuta Steel Plant to be able to produce iron rods, which iron rods would be taken by the Ministry of works.
“The Minister of Works, Senator David Umahi, has already written a letter to me through his ministry, guaranteeing that they will be off-takers in the iron rods that are being produced.
“The president under the Renewed Hope Agenda, which the Minister of Works is driving plans to construct about 30,000 kilometres of roads across Nigeria, where they will need about seven million metric tons of iron road. We can produce about 400,000 tons of those iron rods in Ajaokuta if we’re able to restart the steel plant.”
Audu also expressed concerns that lack of power supply was a major setback for ongoing efforts to restart production at Ajaokuta in phases, as the plant has been disconnected from electricity supply by the Transmission Company of Nigeria (TCN) over unpaid debts totaling N30 billion.
He questioned the electricity debt profile as the mill had been operating below capacity, even as he noted that most of the debt is accumulated interest charges.
He plans to negotiate with TCN, also a government agency, to restore supply as reviving Ajaokuta requires collective efforts.
The minister lamented that resolving the company’s problems overnight was impossible given that the plant has been dormant for 45 years, but was excited that President Tinubu approved the set-up of a five-man committee within his government to begin the revival of the Ajaokuta steel mill in phases.
Members of the committee include him, the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, Minister of Industry, Trade and Investment, Doris Uzoka, Minister of Solid Minerals Development, Dele Alake, the Minister of Defence, Muhammadu Badaru.
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