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Tag: Ajaokuta Steel Company

  • Ajaokuta steel company to begin full operations next year – Managing director

    Ajaokuta steel company to begin full operations next year – Managing director

    The Managing Director of Ajaokuta Steel Company Ltd., Prof. Abdulsalam Nasir Naeem, has announced that the company will commence full operations within the next year, following assurance of full support from President Bola Ahmed Tinubu. 

    He made this statement on Sunday at a grand reception ceremony held in celebration of his appointment by Okun Concern Citizens in his hometown, Aiyegunle Gbede, Ijumu Local Government Area of Kogi State.

    Representing the Governor, Deputy Governor Comrade Joel Salifu expressed pride and hope, highlighting Prof. Naeem’s vast experience, academic excellence, and visionary leadership. 

    He noted that Prof. Naeem’s appointment is a perfect fit, and his leadership is expected to steer the company towards greater success and prosperity. 

    Read Also: Tinubu appoints Abdulsalam MD of Ajaokuta Steel Company

    The Deputy Governor emphasized that under Prof. Naeem’s capable leadership, Ajaokuta Steel Company Ltd is poised to be revived and reclaim its position as a cornerstone of Nigeria’s economy and a beacon of industrial progress.

    Governor Ododo, called on the people to welcome the new MD with open hearts and minds, pledging their full support and cooperation as he takes on this important responsibility. 

    The ceremony, chaired by former Governor Yahaya Bello, was attended by numerous dignitaries from all walks of life.

  • ‘Ajaokuta steel’s completion will create jobs, improve economy’

    President Muhammadu Buhari has been urged to sign the Ajaokuta Steel Company Completion Fund Bill, 2018, as it would help reduce unemployment and improve the economy.

    According to the two unions in the iron and steel industry: Steel and Engineering Workers Union of Nigeria (SEWUN) and Iron and Steel Senior Staff Association of Nigeria (ISSSAN), signing the Bill will impact on the company and the industry.

    SEWUN General Secretary Alhaji Kasemu Kadiri and ISSSAN President Mr. Bello Itopa, who spoke with newsmen in Lagos,  said the completion and functioning of Ajaokuta will reduce unemployment and improve the economy.

    They, therefore, urged the president to assent the bill, noting that if the steel company was allowed to operate optimally, it would create more employment, earn foreign exchange and increase revenue generation.

    The union leaders’ appeal was a reaction to the president’s decline to give his assent to the bill. President Buhari had on April 2 declined assent to the bill, saying the nation could not afford to commit $1 billion to the rehabilitation of the company because of other priorities.

    The president argued that appropriating $1 billion from the Excess Crude Account (ECA) was not the best strategic option for Nigeria at this time of budgetary constraints.

    Read Also: Ajaokuta Steel ’ll soon come to life, says Osinbajo

    But the two unions thought otherwise. Kadiri said, for instance, that the president and lawmakers should close all loopholes and ensure that the company begins operations.

    He said the project was envisaged to generate socio-economic benefits and increase the nation’s production capacity through linkages to other industrial sectors.

    According to him, the rehabilitation of the steel mill was stalled over the years because the Seventh National Assembly cancelled a contract between the Federal Government and Global Infrastructure Holding Ltd. (later Nig. Ltd).

    “The concession agreement was cancelled because of outstripping of assets. The government discovered that Global Infrastructure was taking away important machinery, and the matter was taken to court.

    “Both parties later agreed to settle out-of-court through the intervention of former President Goodluck Jonathan,” Kadiri said, noting that when fully revived, the company will engage over 30,000 people in its workforce.

    His ISSSAN counterpart, Itopa, also appealed to President Buhari not to delay in resolving the financial issue in the bill and ensure commencement of operations.

    He said out of the 43 component units of the company, the primary units to be completed for the steel company to function optimally are coke oven, black furnace, steel making shop and power plant.

    “If all these equipment are put in place, Ajaokuta will be set for operations and we will get raw materials to produce steel from the National Iron Ore Mining Company, Itakpe in Kogi,” he said.

    The unionist added that it was important to revive the steel company inaugurated by the late President Shehu Shagari, noting that it had important areas such as light section mill, wire rod mill, billet, medium section and structural mill.

    According to Itopa, the medium section and structural mill could be used to produce the rail lines in the country. He, therefore, urged President Buhari to sign the bill to enable the company create thousands of jobs.

     

  • Buhari turns down $1bn Ajaokuta completion fund bill, seven others

    President Muhammadu Buhari has declined assent to the Ajaokuta Steel Company fund Bill transmitted to him by the National Assembly in February.

    The Bill stipulated the Federal Government should set aside $1 billion from the Excess Crude Account for the immediate completion of the moribund Ajaokuta Steel Company.

    President Buhari also withheld assent to seven other Bills passed by the National Assembly and transmitted to him for assent.

    Senate President, Bukola Saraki, on Tuesday read separate letters, which informed the upper chamber about the decision of President Buhari to withhold assent to the Bills.

    Buhari cited several reasons including infractions on extant laws, duplication of responsibilities of existing agencies, to financial constraints for his decision to decline assent to the Bills.

    In a letter dated 19th March, 2019, he explained he declined assent to the Ajaokuta Completion Fund Bill because “appropriating $1billion from the Excess Crude Account” as decided by the National Assembly, “is not the best strategic option for Nigeria at this time of budgetary constraints.”

    Buhari said: “The nation cannot afford to commit such an amount in the midst of competing priorities with long term social and economic impact that the funds can be alternatively deployed towards.

    “Bills, which seek to make appropriation of revenues to fund public expenditure should be consolidated in the annual Appropriation Act such that these proposals pass through the traditional scrutiny that budget proposals are subjected to by the Ministry of Finance, Ministry of Budget and National Planning and the National Assembly.

    Read Also: Buhari greets Diya at 75

    “Furthermore, as the Excess Crude Account Funds belong to the Federation, it would be proper to consult with the National Economic Council where the States are represented.

    “Relevant stakeholders such as the Ministries of Mines and Steel Development, Industry, Trade and Investment were not fully consulted.

    “The inputs of key stakeholders are necessary to create the optimal legal and regulatory framework as well as institutional mechanism to adequately regulate the steel sector.”

    In another letter dated 27th March, 2019 Buhari cited provisions of Section 32 of the Small and Medium Enterprises Development Agency Bill 2018 as reasons for his refusal to assent to the Small and Medium Enterprises Development Agency Bill.

    He said: “Section 32 of the Bill, introduces (I) a 2.5% levy on the profit before tax of the target companies which will increase the tax burdens of the companies while offering no direct benefit to them : (ii) a1% levy on imports which will also add to the cost of doing business in the country , (iii), a 5% levy on luxury goods which duplicates efforts by the Federal Ministry of Finance to raise excise on such goods in a more sustainable manner to the benefit of the Federal Government treasury “, he said .

    He noted that if signed into law, the Agency will have similar objectives to the Bank of Industry particularly with regard to the funding of Small and Medium Enterprises.

    He said: “Accordingly, it is important to streamline its functions to avoid a duplication or overlap of functions with other government institutions performing similar functions aside the likelihood of increasing public re-current expenditure by the proposed creation of new public sector bodies. ”

    Other affected Bills include the Nigerian Aeronautical Search and Rescue Bill 2018, Chartered Institute of Training and Development of Nigeria (Establishment) Bill 2018 and Federal Mortgage Bank of Nigeria Bill 2018.

    The National Housing Fund Bill 2018, National Institute of Credit Administration Bill 2018 and National Bio- Technology Development Agency Bill 2018, were also affected.

    On each Bill, President Buhari gave reasons for his decision to withhold assent.

  • Senate endorses $1bn completion fund for Ajaokuta

    The Senate on Thursday agreed the sum of $1 billion from the Federal Government share of Excess Crude revenue be devoted to the immediate completion of the Ajaokuta Steel Company.

    The Upper Chamber also said all monies that may from time to time be appropriated and authorised by any tier of government should be part of the funding for the completion of the company.

    It said all loans or grants from time to time made to the country for the purpose of completing the Ajaokuta Steel Company should be accommodated.

    This followed the adoption of the “Ajaokuta Steel Company Completion Fund Bill, 2018 passed by the Senate yesterday.

    The Bill slated for concurrence, was presented by Senate Leader, Senator Ahmed Lawan.

    The proposed legislation stated the monies in the Fund shall be applied by the minister subject to appropriation by the National Assembly only for the purpose:

    (a)The construction, improvement, extension, enlargement and replacement of infrastructure and works, including the provision, acquisition, improvement and replacement of other capital assets required in respect of or in connection with the completion of the Ajaokuta Steel Company project.

    (b) The acquisition of land and of any right or interest in or over land and in respect of the use of any invention.

    ( c ) The carrying on of any survey, research or investigation preparatory to the under taking of any such purpose as is referred to in paragraph (a) and (b) or the formation of any plan or scheme for the development, improvement, of Ajaokuta Steel Company project.

    Deputy Senate President, Ike Ekweremadu, who presided, said that the Bill if signed into law would go a long way to facilitate the quick completion of the Ajaokuta Steel complex.

    The Senate also adopted the Presidential Programme on Rehabilitation and Reintegration (establishment and implementation) Bill 2018.

    The Bill provides legal instrument to implement the Presidential Amnesty programme in the area of disarmament, demobilization and reintegration.

     

  • Twist in the Ajaokuta Steel tale

    Despite spending over $8 billion on Ajaokuta Steel Company in Kogi State since 1979, the 39-year-old steel plant is yet to come to life. This may have turned Nigeria’s road to building a robust steel industry into a long, winding journey to nowhere. The National Assembly’s intervention has brought a twist to the tale. Assistant Editor CHIKODI OKEREOCHA looks at the intrigues over options to revive the steel plant, which have pitched the lawmakers against the Ministry of Mines and Steel Development.

    Ordinarily,  the “Special  Session of the House of Representatives at the Sectoral Debate on Iron and Steel Sector” ought to have set the tone for a robust discussion on the way forward for the moribund Ajaokuta Steel Company (ASCL) in Kogi State.

    But it did not. The session,  organised last February at the behest of the House Committee on Energy, Steel Development and Metallurgy, added a new twist to the sad tale of Nigeria’s seemingly endless journey to self-sufficiency in iron and steel products.

    ASCL is Nigeria’s largest integrated steel plant. Tagged: “bedrock of Nigeria’s industrialisation” because of its linkages to other sectors, such as the industrial, agricultural, transport and construction sectors, the steel plant harboured Nigerians’ collective aspiration for self-sufficiency in steel.

    Arguably the most ambitious national industrial project, ASCL was expected to jump-start the nation’s industrialisation and halt the importation of steel products, which cost the nation an estimated $3.3 billion annually.

    While the first phase of the plant targeted a production capacity of 1.3 million tonnes of liquid steel per annum, the third and final phase was expected to push up production capacity to 5.2 million tonnes per year.

    It was also envisaged that the project would directly employ about 10,000 workers at the first phase of commissioning, while the upstream and downstream industries were expected to engage over 500,000 employees, among other benefits.

    Sadly, however, none of these deliverables has come the way of Nigerians and the economy 39 years down the line. Instead, ASCL, which is Nigeria’s largest single investment in any one place, has become a huge drain pipe on the nation’s resources.

    According to the Minister of Mines and Steel Development, Dr. Kayode Fayemi, the Federal Government has sunk a whopping $8 billion into ASCL since 1979 without deriving any benefits from the huge investment.

    It was against this backdrop that the recent House sectoral debate was seen as perhaps, a fresh vista for a productive discussion on the way forward for ASCL. But this was not the case. Instead, the sectoral debate has introduced a disturbing twist to the seemingly endless saga of Nigeria’s quest for industrialisation by riding on the back of the steel plant.

    This was sequel to the passing of a vote of no confidence in key officials of the Ministry of Mines and Steel Development by the lawmakers.

    The lawmakers specifically came down hard on Fayemi and the Minister of State for Mines and Steel Development, Alhaji Abubakar Bwari, following their alleged failure to appear before it for the sectoral debate on the steel plant.

    The obviously combative lawmakers also instructed the embattled ministers to suspend every step towards concessioning ASCL, alleging that the proposed concessionaire had tied the hands of the ministry. The House members added that they preferred that government invest and complete the project.

    According to the House, about $500 million will be required to complete the steel project, which it claimed was 98 per cent done. The House through Speaker Yakubu Dogara also urged the Federal Government to source the money from anywhere, even if it means borrowing, to complete ASCL.

     

    Fayemi, other stakeholders kick

     

    But the position of the House did not go down well with Fayemi and indeed, other concerned stakeholders in the economy. The Minister faulted insinuations that there were dirty dealings in the plan to concession the plant. He described as unfair allegations leveled against him and the junior minister that they were behind such shady deals.

    Fayemi, who reiterated his desire to work with the leadership of the National Assembly to ensure completion of the process, however, pointed out that government has taken a principled position that Nigeria will not spend a dime on the completion of the ASCL, noting that despite spending about $8bn on the steel plant since 1979, there has not been any result.

    He also expressed surprise that the same House, which turned the heat on him had earlier agreed to concession the plant and approved the sum of N2 billion for the process in the 2017 Appropriation Act.

    “We are just implementing what was passed by the National Assembly. That is why we are surprised that we have been subjected to an unwarranted attack over the matter….,” Fayemi said.

    The Minister explained that the ministry will not repeat the mistake of former President Olusegun Obasanjo’s administration, which undertook the re-concession of the steel plant without a technical audit and a transaction advisory service to advise accordingly as to who had the technical capacity, financial wherewithal and track record to bring Ajaokuta back to life.

    The Nation learnt that before the latest altercation between the lawmakers and the ministry over ASCL, the Federal Government was considering three options to revive the steel plant. They include a direct sale, concession and joint venture.

    This followed the presentation of a report by transaction consultants Greenwich Trust Limited on possible transaction routes that could be taken to rehabilitate the steel complex. But the ministry obviously prefers a concession, a move that appears to enjoy the support of stakeholders most of who argued that the government has no business in doing business.

    This was why some of them believe that there is more that meets the eye in the House inquest into the activities of the ministry, particularly its insistence on investing another $500 million into the completion of the steel plant.

    To them, it was against public sentiment in allowing the private sector with the financial and technical muscle to turn the facility around.

    Some of them, who spoke with The Nation observed that the lawmakers’ sudden interest in the steel plant was a façade for a more sinister motive to raise money for purposes other than reviving ASCL.

    A reliable source close to the House said the lawmakers’ plan to inject $500 million into the ministry’s budget for ASCL was actually a subterfuge to raise money to prosecute the 2019 general elections.

    The source, who declined to be mentioned, said in making a case for the extra-budgetary allocation, the House ignored an earlier audit report, which indicated that about $1.049 billion was required to make ASCL operational.

    According to experts, the $500 million being requested by the House to resuscitate Ajaokuta was a far cry from the about $1.049 billion, which the ministry said was required to put the steel complex fully on stream.

    This was said to be why the ministry was curious that the House was harping on the $500 million component to complete the complex without reference to the balance of $549 million for the auxiliary facilities that will make it functional.

    Perhaps, more curious was the fact that the lawmakers went ahead to pass a vote of no confidence on Fayemi and Bwari despite the two letters sent to the House to explain why both ministers could not appear before the lower chamber to shed light on the non-completion of Ajaokuta and their request for a  new date.

    Besides, the ministry was said to have had cause to address the House and the Senate Committee on privatisation four times in the past, which was why Fayemi said he was surprised that the House was “this harsh this time”.

    He, however, said no amount of intimidation would make the government hand the plant over to any company without the requisite financial and technical know-how.

    At present, ASCL is undergoing a technical audit, which will be completed in six weeks’ time, with Fayemi indicating that four companies from Russia, Belarus, Ukraine and Nigeria have shown interest in the steel plant.

     

    Steel workers root for unbundling

     

    While Fayemi and the lawmakers have locked horns over whether or not concession should be the preferred transaction  route for ASCL, iron and steel workers under the aegis of Iron and Steel Senior Staff Association of Nigeria (ISSAN) have urged government to unbundle the steel plant and give it to different firms.

    Its President, Mr. Itopa Bello said unbundling the steel company into different firms would ensure efficiency and competitiveness. According to him, Ajaokuta has many product entities that have the capacities to stand on their own and so should not be given to a single investor under a concession arrangement.

    “The autonomous entities in the project should be unbundled and given to different serious investors and there will be competition among operators and they will function well,” Bello said last week, pointing out that ASCL was an integrated plant with 43 units and 40 of them had been completed and working effectively.

    The ISSAN chief said the remaining three, which are the primary and prominent units of the steel company, have  not been completed, adding that the functioning 40 units should be unbundled because the company had the ability to start and finish a production without requiring input from outside.

    The labour leader also said TPE, the Russian firm which completed the 40 units, should be allowed to finish the whole project since it had the knowledge of the production activities of the company.

    While stressing the need to complete the remaining components, he added that the company had the capacity to produce materials required for constructing all the rail-lines across the country, as well as generate 15,000 direct jobs and 500,000 indirect ones.

    Regardless of the option the Federal Government takes to revive the steel plant, experts said there is the need to first address some of the core infrastructural challenges around Ajaokuta and the steel sector generally.

    Former Joint Managing Director/CEO, Delta Steel Company (DSC), Ovwian-Aladja, Delta State, Dr. S.O Nwabuokei, said for instance, that there was the need to dredge the Escravos water channel near Warri, Delta State, to allow bigger ships berth or access the Delta ports.

    The channel connects the Warri Port to the Atlantic Ocean. But the port has become idle, as ocean-going vessels could no longer access it because of the shallow Escravos channel.

    For the dredging to take place, Nwabuokei said the Nigerian National Petroleum Corporation (NNPC’s) crude oil pipelines within the vicinity of Warri Port must be relocated or lowered to a certain level.

    Also, the government is yet to complete the remaining 22-Kilometre rail track from Agbaroh in Agbo to Aladja in Warri. The rail line is supposed to facilitate the movement of raw materials and finished products to and from Ajaokuta.

    Incidentally, these are some of the infrastructural issues cited by Global Steel Holdings Limited/Global Infrastructure Nigeria limited (GHIL/GINL), the former Indian managers of Ajaokuta for failing to revive the facility.

    They had accused the government of reneging on its obligations under the concession agreement signed with them to fix the afore-mentioned infrastructure.

  • Ajaokuta: Reps ask Buhari to stop concession

    The House of Representatives on Thursday advised President Muhammadu Buhari to stop Mines and Steel Development Minister, Dr Kayode Fayemi, from concession moves of Ajaokuta Steel Company.

    The House said that the stoppage was to give time for conclusion of review of the process ordered by the chamber as part of its drive to get the company back on stream. 

    The resolution followed a motion by Rep. Ahmed Yerima (Zamfara-APC) and 24 other lawmakers.

    The motion is entitled “Urgent Need to Investigate the Circumstances under Which the Federal Ministry of Mines and Steel Engaged the Globally Discredited PricewaterhouseCoopers ( PwC ) to audit Ajaokuta Steel Complex for Purposes of Concession.”

    Moving the motion, Yerima said he was aware that Fayemi recently announced, “and it was widely published’’, that Ajaokuta Steel Company would be given out on concession after an ongoing audit.

    He disclosed that audit of the company was undertaken by PricewaterhouseCoopers, which he alleged, had been discredited, “having been sanctioned in India with a two-year audit ban for infractions of over one billion dollars’’.

    The lawmaker said that the firm was also sanctioned in Brazil for which it paid 50 million dollars as fine, and was fined in the United Kingdom for 5.1 million pounds.

    He also said that the firm paid 225 million dollars and 25 million dollars, respectively, as fines to TYCO shareholders in the U.S and Bank of Tokyo-Mitsubishiw for laundering money for Iran, Sudan and Myanmar.

    He added that it was blacklisted for roles in terrorism and human rights abuses, among other infractions and irregularities in its operations, “which has left its reputation in tatters.”

    Yerima expressed concern by the allegation that PricewaterhouseCoopers was informally engaged by Global Steel to assist and advise them on how to recover Ajaokuta Steel Company and National Iron Ore Company ( NIOMCO ), Itakpe, from the Federal Government.

    He said he was worried that the minister engaged a company whose antecedents may suggest that they were engaged to audit and prepare reports which may skew the outcome in a pre-conceived manner.

    According to him, it may have done to favour parties which the minister may have lined up or which may represent the interests of their former clients ( GINL ).

    The legislator wondered why Bureau of Public Enterprises, and Infrastructure Concession Regulatory Commission ( ICRC ), established by law, was not involved in the audit and concession process.

    He accused Fayemi of deliberate plot to concession Ajaokuta Steel Company to a pre-determined group.

    He decried the minister’s submission that government could no longer spend additional funds on the company “when he is already spending N2 billion for the concession process’’ and where Nigeria spent over 3.5 billion dollars on steel importation.

    Yerima said since NIOMCO was handed again to Global Steel in “so called modified concession for a seven-year period with an option of a further 10 years, the plant which is integrated with Ajaokuta Steel Complex has remained moribund’’.

    According to him, this development is an indication of likely failure of yet another concession.

    Supporting the motion, Rep. Nicholas Ossai (Delta-PDP) said “this is a man that says that Ajaokuta cannot be brought to life but has spent N2 billion on the company 

    “This has to be investigated in line with section 88 of the 1999 Constitution. 

    In his contribution, Rep. Mohammed Abdu (Bauchi-APC) said “we know that the five countries of the world that have become world powers have their roots in steel industry. We cannot play with our common sovereign wealth.”

    Similarly, Rep. Bashir Babale (Kano-APC) reminded members that “this is a government that promised change and to fight corruption.

    “How much are we spending to import steel in this country? I wonder why the minister was in a hurry for this concession.

    “We need to be patriotic enough to make sure that what we do, we do it for Nigerians. I urge my colleagues to support this motion.”

    On his part, House Leader, Mr Femi Gbajabiamila, called for a Bill to stop the concession of Ajaokuta Steel Company or amend existing law to check the process.

    Many lawmakers, including Edward Pwalok (Plateau-APC), Toby Okechukwu (Enugu-PDP), Aminu Shagari (Sokoto-APC) and Emmanuel Orker-Jev (Benue-APC) supported the motion.

    The House agreed that the decision to stop the concession process was in the interest of the nation’s economy and the anti-corruption fight of the Buhari administration.

    In adopting the motion, the lawmakers resolved to expand the mandate of its Ad Hoc Committee on Ajaokuta Steel Complex to include urgent consideration of possibility of a bill for completion of the company and prohibit its concession. 

    It equally mandated the committee to inquire into the rationale of engaging “a globally discredited firm, PricewaterhouseCoopers ( PWC ) to audit the company, without due process.

    The House consequently urged the Senate to concur on the motion and resolved to amend the National Council on Privatisation ( NCP ) Act to delete Ajaokuta Steel Complex from the list of companies for concession.

    NAN

  • House of Reps goofed on Ajaokuta – Fayemi, Bwari

    The Minister of Mines and Steel Development, Dr. Kayode Fayemi, and the Minister of State for Mines and Steel Development, Hon. Abubakar Bawa Bwari, on Thursday faulted the position of the House of Representatives on the Ajaokuta Steel Complex.

    The duo said they have not contracted any transactional adviser for concessioning of Ajaokuta Steel Company as wrongly asserted by the House.

    They also said the ministry has not spent a dime from the N2, 096,500.00 appropriated by the House for concessioning of Ajaokuta Steel Company in the 2017 Appropriation Act.

    They said it was rather worrisome that the House of Representatives could devote an entire day to non-existing matter.

    The ministers made the clarifications in a statement issued by the Special Adviser on Media to the minister, Mr. Olayinka Oyebode.

    The statement said: “The attention of the Minister of Mines and Steel Development, Dr. Kayode Fayemi, and the Minister of State for Mines and Steel Development, Hon. Abubakar Bawa Bwari, has been drawn to the debate by members of the House of Representatives on the Ajaokuta Steel Complex, where the House adopted a resolution to stop the planned concessioning of the steel company.

    “Whilst the ministers are convinced the Honourabe members mean well as patriots concerned about an important national asset, it is also a fact that they have grossly misunderstood the ministers and other stakeholders working with the Ministry on this exercise.

    “In view of this and the need to set the record straight for the sake of the general public and the investing community, it is important to state as follows:

    • The Ministry of Mines and Steel Development has not contracted any transactional adviser for the concessioning of Ajaokuta Steel Company, as wrongly asserted by the House.
    • The process for the appointment of a Transactional Adviser is on, but cannot be completed until it gets the approval of the Federal Executive Council (FEC).
    • The Ministry has not spent a dime from the N2, 096,500.00 (Two billion, ninety six million, five hundred thousand naira) appropriated by the House for the concessioning of Ajaokuta Steel Company (in the 2017 Appropriation Law).
    • The mediation process that led to the amicable settlement of the legal encumbrances on Ajaokuta Steel Complex has not ended. There are still a few more steps to be taken as outlined in the terms of (out of court) settlement. And the Ministry is following up on this.
    • It is also important to state that no one has been hired.
    • We find it rather worrisome that the House of Representatives could devote an entire day to an issue that has not even arisen.
    • The Ministry remains committed to making Ajaokuta Steel Plant function effectively, convinced that steel remains the most important engineering material and backbone of industrialisation in any economy.
  • No penny will be spent on Ajaokuta steel – Fayemi

    No penny will be spent on Ajaokuta steel – Fayemi

    Dr Kayode Fayemi, Minister of Mines and Steel Development, on Thursday in Abuja said no penny will be spent by the Nigerian Government to revive Ajaokuta Steel Company.

    Fayemi said this while addressing newsmen on a ‘Vote of No Confidence’ passed on him by the House of Representatives recently.

    He said that government would not spend a dime to put Ajaokuta steel to use but would rather concession it to a capable company with good history of competence and financial buoyancy, among others virtues.

    About eight billion dollars had been sunk into the steel mill by previous administrations.

    Fayemi said a technical audit of the steel company is ongoing and would be completed in the next six weeks.

    He said after completion of the technical audit of the steel company, the ministry would declare it open for concession and only a competent bidder would be allowed to operate the company.

    “The position of the government is clear on Ajaokuta; that only a company that is verifiable, competent, financially buoyant will Ajaokuta be concessionned to after the technical audit is completed.

    “The rumour going on that Ajaokuta is at 98 per cent completion is not true; that is why the technical audit is going on to ascertain its level of completion and other information needed,’’ he said.

    On the vote of no confidence passed on him and his minister of state, he described it as an attack on their personalities and it was unacceptable.

    He said that since himself and the minister of state assumed office till date, they had appeared at the National Assembly four times – three at different House committee levels on the Ajaokuta steel situation.

    He said what led to the “attack’’ was an invitation sent to them to appear before the House on the Ajaokuta issue and they replied that they were currently indisposed but another date should be given to them to appear.

    He said instead of the house to understand with them, it raised vote of no confidence and the news went viral.

    “As if that was not enough, the Leader of the House, Femi Gbajabiamila, gave another news conference and passed a vote of no confidence on us in Lagos and that also went viral in the dailies.’’

    According to him, “we have made it clear to the house on what to do before we concession the steel plant in which the technical audit is on-going”.

    The minister said that most of the allegations made against him and the minister of state and the ministry’s officials were not only unfounded but malicious.

    He said while the House members reserved the right to discuss and pass resolutions on national issues, he took serious exception to a member of the House going outside the hallowed chambers to make spurious allegations against public servants.

    Members of the House of Representatives had passed a vote of no confidence on the Minister of Mines and Steel Development, Dr Kayode Fayemi.

    The members described their non-appearance as a contempt to the House and executive recklessness.(NAN)

  • The twists and turns around 34-year-old Ajaokuta Steel Company

    The twists and turns around 34-year-old Ajaokuta Steel Company

    Thirty-four years after it was designed to kick-start Nigeria’s industrialisation, the Ajaokuta Steel Company is yet to produce steel despite attaining 98 per cent  completion since 1994, after the Federal Government had sunk $10 billion into it. In this analysis, FRANCISCA OLUYOLE of the News Agency of Nigeria (NAN) reports that additional $2 billion is needed  to complete the remaining two per cent of the country’s biggest industrial project.  

    WITH capacity to serve as stimulus to national development and economic boaster to industrial growth, the steel industry is said to be the backbone of any nation.

    Thus, the Ajaokuta Steel Company in Kogi State was envisaged to serve as the bedrock of Nigeria’s industrialisation.

    The idea of having a steel industry was conceived in 1958 by the Federal Government and the preliminary market studies were carried out. The studies were initially directed towards the feasibility of establishing Rolling Mills.

    However, because of the growing awareness of the availability of iron ore in Agbaja, Udi and other areas of the country, emphasis later shifted to establishing an integrated steel plant.

    The late Sir Abubarka Tafawa Balewa and the late Dr Nnamdi Azikiwe between 1960  and 1966 invited and recieved proposals from foreign firms, including those from the United Kingdom (UK), the United States (U.S.), Germany and Canada, most of these being on the feasibility of establishing steel complexes.

    The efforts of the government did not yield significant positive result because they were based on the use of iron deposits in Agbaja and Udi which were later found to be unsuitable for direct reduction.

    In 1967, a team of Soviet experts arrived in Nigeria to conduct a feasibility study on the establishment of an iron and steel plant, as a follow-up on a technical/economic cooperation agreement between the governments of Nigeria and the defunct Union of Soviet Socialist Republics (USSR).

    In their report, they recommended the use of Blast Furnace process of iron making. The report also pointed out that the known iron ore deposits in the country were of poor quality and recommended that further geological surveys be conducted to see if better ore could be found.

    In 1968, Soviet geological experts came to Nigeria and after a general geological investigation reported that there were high prospects for richer iron ore and coal deposits in the country.

    However, the Federal Government signed a contract in 1970 with TYAZHPROMEXPORT (TPE), a Russian company, under which they agreed to provide specialised equipment to carry out further geological survey to determine the quantity of the deposits of iron ore, coal resources in the country that could be used for the proposed iron and steel industry.

    By 1973, Suitable Iron Ore (SIO) deposit was discovered in Itakpe, Ajabanoko and Oshokoshoko all in the region around Kabba-Okene-Lokoja – Koton Karfe axis, now in Kogi State.

    The TPE was contracted to prepare the Preliminary Project Report (PPR) for the proposed Iron and Steel Industry in Nigeria.

    In 1975, during the reign of the reign of the late Gen. Murtala Mohammed, the preliminary project report, specifying the raw materials base at Itakpe, in Kogi plant site location (Ajaokuta), first phase production volume (1.3 mmt), process route (Blast Furnace -Basic Oxygen Furnace), Product form (Long products) submitted by TPE was reviewed, discussed and accepted.

    TPE was subsequently commissioned to prepare the Detailed Project Report (DPR) on Ajaokuta which was completed and submitted in 1977.

    In 1979, Ajaokuta Steel Company Limited (ASCL)/NIOMCO, Delta Steel Company (DSC), among others, were established under Section 2 of National Steel Council Decree No. 60 of Sept. 19, 1979 and incorporated as Limited Liability Companies.

    In 1980, former President Shehu Shagari laid the Foundation Stone of an integrated steel plant in Ajaokuta on 24,000 hectares of sprawling green-field landmass, built on 800-hectares.

    The steel company has four different types of rolling mills inside the plant, such as the Billet Mill which produces billets; the Light Section Mill which produces round, square, strip and angles metals.

    The Wire Rod Mill, which produces wire rods and rebars used in construction companies and production of nails, fencing wire, rope mesh, bolts and nut and netting and the Medium Section and Structural Mill produces parallel flange channels, equal angles, unequal angles and standard channels.

    The four rolling mills are bigger than Aladja, Osogbo, Katsina and Jos rolling mills put together while the coke oven and bye products plant is bigger than all the four refineries in Nigeria put together.

    From 1980 to 1983, the administration achieved 84 per cent of Ajaokuta steel plant as the Light Section Mill of the plant was inaugurated earlier than the scheduled date, while the Wire Rod Mill was also inaugurated in April 1984, earlier than the scheduled month of December.

    In 1994, equipment erection work at Ajaokuta Steel Plant reached 98 per cent completion.

    With all these achievements, it was, however, sad that the gigantic steel plant idea conceived and executed by past leaders had failed to contribute to the Nigeria’s development.

    The Ajaokuta steel that had reached 98 per cent completion as far back as 1994 had not produced single steel till date.

    The integrated plant was envisaged to have multiplier effects on all sectors of the economy such as the industrial, agriculture, transport and construction sectors, among others.

    The steel plant was designed to produce 1.3 million tonnes of liquid steel per annum in its phase one, with a built-in capacity to expand its production to 2.6 million tonnes of flat iron and steel products in its second phase and phase three plan was planned to produce 5.2 million tonnes of various types of steel products, including heavy plates.

    The steel plant complex also has highly sophisticated assemblage of 43 different plants made up of a web of complex iron, cable and machinery of different sizes and functions.

    Out of the 43 plants, 40 are already completed and can produce independently.

    Ajaokuta steel has the capacity to become a major producer of industrial machineries, auto-electrical spare-parts, shipbuilding, railways and carriages.

    The steel plant’s first phase has the capacity to provide direct employment for 10,000 technical staff and indirect 500,000 for unskilled upstream and downstream employment if it is in operation.

    The Federal Government had spent over $10 billion over 34 years and would require another $2 billion to complete the remaining two per cent of the plant.

    South Korea, which started its steel construction around the same time with Ajaokuta steel now has a revenue base of over N60 billion dollars per annum and employed over 65,000 staff.

    Ajaokuta steel would have done better if it had started production.

    According to World Steel Association (WSA) report, South Africa and Egypt produced 6.1 and 5.0 million tonnes of steel in 2016, while South Africa is the 22nd on the list of countries on steel production, Egypt is the 27th.

    China, the world’s largest steel producer topped the chart with a production of 808.4 million tonnes, representing about 50 per cent of global steel output for 2016, as Japan and India produced 104.8 and 95.6 million tonnes of crude steel to maintain the second and third position on the list.

    Virtually all the nations that are playing big globally have enhanced capacities for steel production.

    Even those that do not have any of the key mineral inputs needed for steelmaking had over the years developed the capacity to produce steel.

    Japan and South Korea, for instance, have no mineral resource for iron and steel, but they rank among the world top 10 countries in steel production.

    Nigeria that is blessed with raw materials, such as iron ore, coal, natural gas and limestones needed for the manufacture of steel is still struggling with what to do with the dormant plant.

    In June 2003, former President Olusegun Obasanjo conceded Ajaokuta steel to Messrs SOLGAS ENERGY of USA on a 10-year tenure; in August 2004, the Federal Government terminated the SOLGAS Agreement due to non-performance.

    Between 2004 and 2005, the Obasanjo administration, again, granted another concession to Global Infrastructure Nigeria Limited (GINL) an India company for the operation of Ajaokuta steel and the Nigeria Iron Ore Mining Company (NIOMCO) at Itakpe in Kogi.

    However, the Indian company did not live up to the government’s expectation in managing the two companies.

    Consequently, the administration of former President, the late Umaru Yar’Adua, was compelled to revoke the contract in April 2008 without meeting the requirements of the clauses built into the agreement.

    The Indian company thereafter took the Federal Government to arbitration court in London, which also crippled the two firms.

    In 2016, President Muhammadu Buhari fulfilled his campaign promise on Ajaokuta steel by settling the legal bottleneck surrounding the companies out of court.

    However, the Federal Government signed modified concession agreement with GINL to enable the firm to retain the National Iron Ore Mining Company, Itakpe.

    The modified seven-year concession agreement was signed on August 1, 2016, while the Federal Government took over the Ajaokuta steel.

    While the Federal Government was planning to reconcession Ajaokuta steel again, stakeholders in the Nigerian Metallurgical Society urged it to complete the remaining two per cent and operate the plant for few years before concessioning it.

    The stakeholders also urged government to provide clear and articulated plan for the development and growth of metal production sector as the struggle for functional steel company in Nigeria continued.

     

  • Shortage of accommodation may hinder Ajaokuta’s take-off

    Shortage of accommodation may hinder Ajaokuta’s take-off

    All arrangements put in place by the management of Ajaokuta Steel Company and REPROM Nigeria Limited to commence the running of the multi-billion naira steel plant may suffer a set back, as a result of shortage of accommodation to house the prospective expertrates.

    The Management of Ajaokuta Steel Company had concluded arrangement to commence operation of its rolling mill, one of the most critical section in steel factory.

    There has been major preparation to commence the take off of the steel company in Kogi state, after some delay by the successive government in the country.

    But the Managing Director of REPROM Nigeria Limited, Mr Attah Achimugu, told The Nation, that Low Pour Fuel Oil (LPFO) to contract the lubrication of the rolling mill was issued to a successful company, and delivery of the oil had since been done. But accommodation which is key to the success of the steel company is said to be the major problem.

    However, both the interim management of the steel plant and REPROM Nigeria Limited are already making efforts to renovate hundreds of abandoned houses to provide enough accommodation to the expertrates.

    He said rolling mills have been lubricated and undergoing test runs, adding that full operation of the sector would commence this month.

    REPROM Nigeria Limited had last year entered into a Memorandum of Understanding (MoU) with the interim management of Ajaokuta steel company.

    The Nation investigation revealed that the shortage of the accommodation was not unconnected with the manner in which houses were allocated to people by past management.