Nigeria to revive $4.5B Ajaokuta steel mill in 2016, says Solid Minerals Minister Fayemi

Kayode Fayemi, Nigeria’s Minister of Solid Minerals Development

Nigeria is aiming to hand over the $4.5 billion Ajaokuta steel complex to private operators this year as part of a plan to kick start its industrial and mining industries, Kayode Fayemi, the country’s minister of Solid Minerals Development, said.

Construction of the Ajaokuta complex, which lies on the Niger River and has an installed capacity of 5 million metric tons of steel a year, began in 1979. Due to outstanding legal issues, the steel mill is yet to produce any steel.

“Ajaokuta steel mill is one of the major issues I have put on the table,” Fayemi said in an interview with Bloomberg in early February. “Under my watch” it will be revived, he said.

Fayemi was appointed in November by President Muhammadu Buhari who won elections that marked the first change of power in Africa’s biggest economy since democracy was restored in 1999. Buhari is working to boost the country’s economic growth by spending on infrastructure and diversifying economic activity away from oil, the price of which has fallen by about 70 percent over the last two years.

‘Next Boom’

In addition to steel, Fayemi said the government aims to improve the implementation of mining laws, make available better data on the country’s deposits and act to regulate informal mining. Because of the global rout in commodity prices, Fayemi doesn’t expect significant investment soon.

“The sector has been comatose for some time,” he said. “We will be ready for the next boom.”

Initially the focus will be on industrial minerals for domestic consumption, he said. Limestone for cement production, iron ore for steel, bitumen for asphalt, barium for oil drilling and lead and zinc will be focused on, he said.

The country will also try and attract investment into gemstone mining and will improve data on gold deposits in Zamfara state and elsewhere before trying to attract investors in 2017, he said. An attempt will also be made to revive thermal coal production for power generation.

Source: Bloomberg Business – European Edition