FG to seal MoU with Russian firm on completion of Ajaokuta Steel Mill–Minister
The Minister of Mines and Steel Development, Olamilekan Adegbite, has disclosed that a Memorandum of Understanding (MoU) between Russia and Nigeria on the resuscitation of abandoned Ajaokuta Steel Mill before the end of the month.
The main target of the resuscitation plan is to make the complex operational by 2022.
In an interview with Business Hilights Bureau Chief in Abuja, he said “in the next two to two and half years, Ajaokuta will kick-start. Everything to get it running is already in place, including all the raw materials required for its production process. The only thing that will be imported would be spares and tools.”
“Over 40 years after its establishment, Nigeria is leaning on a bilateral agreement with Russia to resuscitate the now derelict steel factory complex, which is said to be between 95 and 98 per cent completed.
Adegbite explained that so much had been invested in the Ajaokuta Steel Mill for it to be neglected, adding that the Russian engineering and construction group, Metprom, will undertake the necessary work to bring the facility into operation.
He added that under the terms, the resuscitation will be financed by state-owned development institution, Russian Export Centre, to the tune of $460million, while Cairo-based, African Export-Import Bank (AfreximBank), is expected to commit about $1 billion.
When operational, he said Ajaokuta’s output would go some way to aid the realisation of Nigeria’s President Muhammadu Buhari’s plans to diversify the economy away from oil and gas, encourage local production, in addition to creating thousands of jobs.
Business Hilights recalls that the accord to revive the Ajaokuta project under a build-operate-and-transfer (BOT), was reached during a meeting between President Buhari and Russian President Vladimir Putin, in Sochi, Russia, last year.
Construction of the Ajaokuta Steel Complex, which was supposed to produce as much as five million metric tonnes of steel annually, began in 1979. Thousands of Russian engineers descended on Nigeria in the years that followed. However, work stalled due to government’s failure to pay the builders, Russia’s Tyazhpromexport, on schedule.
