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Minister: We’re in final stage of raising N35bn to restart Ajaokuta’s light mill section

Minister: We’re in final stage of raising N35bn to restart Ajaokuta’s light mill section
May 23
23:18 2024

Shuaibu Audu, minister of steel development, says the ministry has reached an advanced stage of raising more than N35 billion required to restart the light mill section (LMS) of the Ajaokuta Steel Company.

Audu spoke at the ministerial sectoral update on the performance of President Bola Tinubu’s administration in one year, on Thursday, in Abuja.

He said a presidential approval had been given to raise the amount from a local financial institution, as part of the Tinubu administration’s resolve to raise the economic profile of Nigeria.

“The local financial institution has given us a final offer. I have done a cover letter and forwarded the relevant documents to the minister of finance to be able to take the financing on behalf of the federal government,” he said.

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He said the LMS can produce 400,000 metric tonnes of iron rods per annum and is critical in bolstering industrialisation in Nigeria.

Audu said he is working closely with the minister of works to supply the iron rods needed for road construction projects in the country from the section.

“There are so many roads being constructed in the country, about 30,000km of roads across the six geo-political zones,” he said.

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“We understand that the ministry of works needs about seven million metric tonnes of iron rods over that four-year period (first term) to construct these roads, Ajaokuta can produce 400,000 tonnes.” 

Audu said advanced talks were held with the minister of defence, who is in charge of the Defence Industries Corporation of Nigeria (DICON), to revive its engineering workshop to produce military hardware for enhancing security in Nigeria.

“So what is required is that we have a Metallurgical Development Centre that has the ability to provide us with the lead and zinc required, to be able to provide and produce some of these military hardware,” the minister said.

Audu said plans are ongoing to revive the Ajaokuta 110 megawatts (MW) power plant that could supply power to both the plant and the national grid.

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According to the minister, due to the paucity of funds, a public-private partnership will be formed, with the asset used as the collateral vessel to provide finance.

He said talks are ongoing with three potential investors, including Transcorp Power, Niger Delta Power Holding Company and Reticulated Global Engineering.

Audu said the ministry has engaged experts to revive both the Ajaokuta Steel Company and the National Iron Ore Mining Company, and also to revitalise the steel industry.

The minister said the vision is essential to the president’s renewed hope strategy, which aims to make Nigeria a Group of 20 (G20) economy by expanding the nation’s economy to more than $1 trillion by the conclusion of his first term.

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Audu said a minimum of $2 million would be required to revive Ajaokuta Steel, adding that the plan was to hand over the company to competent individuals.

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