Ajaokuta Steel Firm Will Be Revived, Federal Govt Insists

The federal government has refuted recent claims by Africa’s richest man that the Ajaokuta Steel Company Limited (ASCL) is beyond revitalisation, saying it is committed to bringing the decades-old moribund behemoth into productive use.

The government also issued a firm deadline of 31 December 2025 for mining and quarrying companies licensed by the Nigerian Mining Cadastral Office (MCO) since last year to conclude Community Development Agreements (CDAs) with their host communities.

The Minister of Solid Minerals Development, Dr Dele Alake, gave the directive following a review of company performance on CDA compliance during the first half of the year. The review was based on a report by the Mines Environmental Compliance (MEC) department of the Ministry.

According to him, only 24 CDAs were signed in the first six months of the year, despite the issuance of 74 new mineral titles within the same period.

“In 2023, the MCO granted 960 Small Scale Mining Licences, 391 Quarry Licences, and 37 Mining Leases — totalling 1,388 titles. Each of these is required by law to enter into CDAs prior to commencing extraction,” the Minister stated.

“The year before, 728 Small Scale Licences, 198 Quarry Licences, and 28 Mining Leases were issued — a total of 954 mineral titles whose holders were equally obliged to engage with communities and sign CDAs before initiating operations.”

Dr Alake highlighted the significant gap between the thousands of mineral titles issued and the mere 342 CDAs signed so far, stressing the urgent need for improved compliance.

“Under this administration, responsible mining — marked by adherence to international Environmental, Social and Governance (ESG) standards — will be the norm. We will not permit companies to commence mining without first engaging host communities and committing to development projects that address their needs,” he said.

Speaking on Ajaokuta Steel Complex, the Ministry of Steel Development, on Thursday, stated that though the federal government acknowledged the challenges with completing the project, it was determined to turn the company around. It said another technical and financial audit of the firm was being undertaken, and the outcome of the exercise would point the way forward.

“While we note the concerns expressed, it is important to state that the federal government remains firmly committed to the development of Nigeria’s steel sector, including the resuscitation of ASCL.

“A comprehensive technical and financial audit of the plant is presently underway to ensure that any decision taken is transparent, data-driven and in the best interest of Nigeria.

The overall assessment of the previous technical audit report dated 2018 maintained that the general status of the Steel Plant is in robust condition except for normal deterioration of replaceable parts and recommended automation of manual control systems for improved efficiency,” the ministry stated.

It also expressed confidence that the updated audit will provide a sound basis for decisive action that advances Nigeria’s industrial aspirations.

“The federal government is determined to build a competitive and modern steel industry that supports national industrialisation and infrastructure growth,” it concluded.

The Ajaokuta steel firm was started in 1979 under the Shagari administration as part of Nigeria’s efforts to industrialise and become self-sufficient in steel production. However, despite being nearly completed, Ajaokuta Steel has never produced steel at a commercial scale due to a combination of mismanagement, political interference, lack of funding, and failed concession agreements.

Meanwhile, continuing, Dr Alake further noted that the ministry has already taken punitive action against firms that defaulted on annual service fees by revoking their titles. “To extract minerals without entering into agreements with host communities is not only unjust — it constitutes criminal expropriation. Any company found to be in breach after the deadline will face licence revocation and be compelled to pay reparations for the resources unlawfully removed.”

He encouraged communities to form capable CDA negotiation teams, preferably including retired professionals who can use their expertise to secure legacy projects for the benefit of youths, women, and the wider community.

He also cautioned traditional rulers and community leaders against undermining negotiations by soliciting personal inducements from companies or recommending contractors who deliver substandard work and divert community benefits.

The minister commended the director of the Mines Environmental Compliance Department, Dr Vivian Okono, for ordering the closure of three firms — Istanbul, Venus, and Cornerstone — last month, due to delays in concluding CDAs with their host communities.

“That action should serve as a clear signal — it is no longer business as usual,” he stated.