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Published On: Wed, Apr 4th, 2018

Why Ajaokuta Steel Company mustn’t die

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Ajaokuta Steel Company

Ajaokuta Steel Company

Ajaokuta Steel Company Limited (ASCL), popularly known as Ajaokuta Steel Mill, has been a subject for debate of late. This is due to its importance as the backbone of the nation’s industralisation. The steel mill, located in Ajaokuta, Kogi state, was built in 1979 on a 24,000 hectares (59,000 acres) site. It is the largest steel mill in the country, and ii is believed that the coke oven and byproducts plant are larger than the country’s 4 crude oil refineries combined. Its huge economic potential, notwithstanding, the mill has not produced any steel all these past years. Indeed, it has not been opened since December 2017.
The Ajaokuta mill has a chequered history. The old Soviet Union was the first to undertake the steel project under a cooperation agreement. In 1967, Soviet experts recommended prospecting for iron ore in Nigeria, as the known deposits were of poor quality for steel making. In 1973, iron ore of the required quality was discovered in Itakpe, Ajabanoko, and Oshokoshoko. Ajaokuta Steel Company Limited was incorporated in 1979, and the steel mill reached 98% completion in 1994.
Mismanagement has been the bane of the project, meaning that the objective of setting it up had remained on paper alone. With 40 of its 43 plants completed, yet steel sheets have not rolled out. After several failed attempts at privatisation, the Nigerian government took back control in 2016. A rail line completed in August 2017, however, was vandalised between Itakpe and Ajaokuta. China Civil Engineering Construction Corporation (CCC), that built the Abuja-Kaduna standard guage railway, has been engaged to repair the Itakpe-Ajaokuta-Warri line, to be ready for operation June 2018.
Still, it does not appear Ajaokuta is a settled matter, not as yet. Some top officials of the government of President Muhammadu Buhari seem determined to concession the plant. His minister of mines and steel development, Dr. Kayode Fayemi recently said that the government would not spend any more money on the project. According to him, over $8 billion(N…) has been sunk into it without any result. The minister revealed that 14 foreign firms have, since 2016, indicated an interest in the steel complex.
Much as the government is persuaded concessioning is the right thing to do, we at Peoples Daily do not share that view. Incidentally, our position is also that of the majority of Nigerians. The Buhari government had declared previously that it would not repeat the ‘mistake’ of its predecessor, headed by Chief Olusegun Obasanjo, that supported concessioning Ajaokuta. Why then is Dr. Fayemi contradicting that policy decision? He and the minister of state for mines Alhaji Nuhu Bwari boycotted recent public hearings on Ajaokuta in the House of Representatives and promptly earned the lawmakers’ vote of no confidence. They asked the duo to suspend every step towards the concession of the plant, adding that they preferred that the government complete the project.
We stand by the lawmakers. Indeed, Ajaokuta is an inherited challenge. Obasanjo’s administration gave it out on concession; President Umaru Yar’Adua government revoked it. And the case went to the London Court of Arbitration. Its resolution in 2016 led to the signing of the Modified NIOMCO Agreement, which ceded the complex back to the Federal Government and NIOMCO to Global Steel.
Ajaokuta is a national economic asset. It holds the key to Nigeria’s industrialisation. Concessioning is a drainpipe that will put the final nail on Ajaokuta’s coffin. People pushing for concessioning, we suspect, only want to strip its assets, not revive it. This is why we resist it and shall always do.

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