By Kadiri Abdulrahman
Abuja , Feb. 28, 2021 The Minister of Mines and Steel Development, Mr Olamilekan Adegbite, has recommended equity partnership as a way of optimising the economic potential of the Ajaokuta Steel Rolling Plant when it becomes operational.
Adegbite gave the recommendation in an interview with newsmen on Sunday in Abuja.
He revealed that an investment group had already indicated interest to go into equity with the Federal Government to provide necessary funding for the plant.
“Equity partnership will be the best deal for Nigerian as regards Ajaokuta Steel Rolling Plant, if it comes to fruition. It is a game-changer.
“Some investors have already proposed to bring in funds to fix Ajaokuta but the debt will not be on Nigeria. It will be on the company.”
The minister explained that there were other proposals that would enable investors to run the steel plant for an agreed number of years before handing it over to Nigeria.
He noted that equity partnership would also develop and enhance local content at the plant.
“That is the first plan. The option of equity partnership is a good one. A group is already asking to come into equity with us. The investors will come in with their equity and value the plant and then buy into it.
“We will have foreign investors partnering with local investors to buy into the plant, while government retains a golden share by overseeing its operations.
“The equity option is still at its early stage and it remains the best option for the plant.”
The minister said that infrastructure that would support operations of the plant were already in place and that the blast furnace, which the plant is designed to use, remained the best way to produce steel in large stock.
“When the plant was being built, an iron ore company was developed at Itakpe, to feed the plant and a rail line was laid from Itakpe to Ajaokuta for transportation of the iron ore.
“The plant was designed to use the blast furnace, which is an older but more effective method of producing steel, when compared to the arc furnace.
“President Muhammadu Buhari has shown serious commitment to ensure that Ajaokuta Steel Rolling Plant is operational,” said Adegbite.
The Ajaokuta Steel Company is one Nigeria’s foremost industrial projects. It was conceived, following the discovery of iron ore and coal deposits in commercial quantities in Nigeria in the 1970s.s
The Steel complex was built with a capacity to produce 1.3 million tonnes of steel every year.
It was designed and built as an integrated plant by the Russian Steel Company, Tyazhprom Export in 1976 after reaching an agreement with the Nigerian government.
In 1983, the plant had reached 95 per cent completion and was inaugurated by President Shehu Shagari.
The agreed plan was that the remaining five per cent of the project would be financed, using profits generated by the company.
However, after almost four decades of several concessions and legal disputes, the plant has yet to become operational.