Russia may give a new lease of life to Nigeria’s biggest steel plant after decades of inactivity, Mines & Steel Development Minister Olamilekan Adegbite has said.
Construction of Ajaokuta Steel Co. began in 1979 with assistance from the then-Soviet Union, but the facility never started production and has sucked up $8 billion of public money. Repeated attempts to revive the flagship project by transferring it to private investors failed and the government terminated the concessions.
Now, Russian engineering and construction group MetProm will undertake the necessary work to bring the facility into operation, financed by the state-owned Russian Export Center JSC and the Cairo-based African Export-Import Bank, Mines & Steel Development Minister Olamilekan Adegbite said in an interview with Bloomberg.
Ajaokuta’s output would go some way to realizing President Muhammadu Buhari’s plans to diversify the economy away from oil and encourage local production. Africa’s biggest producer of crude gets 90 per cent of its export earnings from the commodity. Ajaokuta was designed to produce as much as three million metric tons of steel a year, and would have largely eliminated the need for imports.
“We’ve come to the realization that it’s best to go back to those guys who did it initially,” Adegbite said in the capital, Abuja. Earlier talks on the plant were sealed when Buhari and his Russian counterpart Vladimir Putin struck a government-to-government agreement last week at the Russia-Africa summit in Sochi, Adegbite said.
Adegbite didn’t provide more details about the financing. “We are going to sign the details later,” he said. MetProm will complete, operate and eventually transfer the plant back to the Nigerian government after “training our engineers to take over.”