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Litigation, funding delay Ajaokuta plant’s revamp

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Minister of Solid Mineral Resources Dr. Kayode Fayemi<br />

The Federal Government, on Tuesday, disclosed that the combination of funding and litigation constraints were issues delaying the rehabilitation and completion of the Ajaukuta steel company.

It also declared that as at 2010, what was required to restore the Ajaokuta company into operations was $1.2 billion.

The Minister of Mines and Steel Development, Kayode Fayemi, who was at a meeting with Senators, said that until all issues that emanated from the position of the London Court of Arbitration were addressed, it will be difficult to put up Ajaokuta Steel Complex for concession.

Sole Administrator, Ajaokuta Steel Limited, Sumaila Abdul-Akaba, in his presentation, noted that following last technical audit of the steel plant in 2010, it was estimated that about $1.2 billion was required to achieve the total rehabilitation, completion and commissioning of the plant.

Abdul-Akaba gave a breakdown of the amount as $513 million for rehabilitation, completion and commissioning, while $687 million was for balance of external infrastructure.

He also told the committee that by April 2018, the 55 mw electricity plant installed in the complex would be operational, while there are 10,000 houses in the complex, with about 4,000 completed.

Abdul-Akaba assured the committee that machines installed in the complex are first class, stressing that “all we need to do is to sort out legal issues surrounding Ajaokuta Steel to bring the plant to run.”

He said that the over $10 billion steel imported into the country yearly could be save if Ajaokuta was brought on stream.

On what the ministry is doing about lead poisoning, especially in Zamfara State, Fayemi said that they have constituted a team on lead poisoning jointly with the Ministry of Health.

The minister also said that they have blocked the use of mercury, which he said leads to lead poisoning, while the issue of institutional capacity and infrastructure is being addressed.

“For the first time states are also getting 13 per cent derivation due them from solid mineral exploited from their states,” he said, adding that mines surveillance task team appointed by the Inspector General of Police has been constituted.

The minister noted that they do not take lightly the issue of illegal mining “but we also believe that artisan miners should be protected, to create employment in the area and enable the people to benefit.”   

It was gathered that the Senator Enyinnaya Abaribe-led committee has concluded arrangements to visit Ajaokuta Steel Complex for first hand information, as well as to see how that the National Assembly can facilitate the rolling out of steel complex.

The Federal Government and Messrs Global Steel Holding Limited, an Indian firm, began negotiations for amicable resolution of the ownership of Ajaokuta Steel Complex in 2008.

The Ajaukuta steel company is being developed in three phases and the first phase of 1.3million tonnes steel production has reached about 98 percent completion before the contract was terminated in 1996.

It was revealed during the budget defence that the federal government was compelled to stop further capital development on the plant due to lack of funds and political will.


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Ajaukuta steel company.
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