The Minister of Steel Development, Shuaibu Audu, has revealed that fully reviving the Ajaokuta steel mill in Nigeria will cost between $2 to $5 billion. However, restarting only the light steel section of the mill is estimated to cost around N35 billion (approximately $80 million).
Audu disclosed this to State House Correspondents after a closed-door meeting with President Bola Tinubu at the Presidential Villa in Abuja.
The minister provided updates on the government’s plans to revive the long-delayed Ajaokuta steel project.
According to Audu, Tinubu has approved fundraising locally to restart and rebuild the light steel mill.
He said this mill can produce about 400,000 tons of iron rods out of the 7 million tons needed for the federal roads construction project.
“The second agenda for discussion with Mr President was that Mr President gave me approval towards the end of last year to raise some money to restart and rebuild the light steel mill of the Ajaokuta Steel Plant to be able to produce iron rods, which iron rods would be taken by the Ministry of works.
“The Minister of Works, Senator David Umahi, has already written a letter to me through his ministry, guaranteeing that they will be off-takers in the iron rods that are being produced.
“The president under the Renewed Hope Agenda, which the Minister of Works is driving, plans to construct about 30,000 kilometres of roads across Nigeria, where they will need about 7 million metric tons of iron road. We can produce about 400,000 tons of those iron rods in Ajaokuta if we’re able to restart the steel plan,” he added.
Audu also expressed concerns that the lack of power supply was a major setback for ongoing efforts to restart production at Ajaokuta in phases.
Recall the Ajaokuta Steel Company has been disconnected from the electricity supply by the Transmission Company of Nigeria (TCN) over unpaid debts totalling N30 billion.
He questioned why the steel plant was consuming so much electricity when operating below capacity.
According to Audu, most of the debt is accumulated interest charges.
He plans to negotiate with TCN, also a government agency, to restore supply as reviving Ajaokuta requires collective efforts.
The minister lamented that resolving the company’s problems overnight was impossible given that the plant has been dormant for 45 years.
The minister said the president approved the set-up of a five-man committee within his government to begin the revival of the Ajaokuta steel mill in phases.
Members of the committee include the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, Minister of Industry, Trade and Investment, Doris Uzoka, Minister of Solid Minerals Development, Dele Alake, the Minister of Defence, Muhammadu Badaru, and the Minister of Steel Development, Shuaibu Audu.
Audu stated that if the committee can complete all the projects that have been committed to its hands, including the revival of the Ajaokuta steel mill, President Tinubu’s administration will be able to create not less than 500,000 jobs.
