The Nigerian government has said it will no longer be able to revitalise the Ajaokuta Steel Company in 2022 as it earlier pledged, citing the impact of COVID-19 and the ongoing Russia-Ukraine war.
The Minister of Mines and Steel Development, Olamilekan Adegbite, said the project will also likely not be completed by the Buhari administration before it leaves office in 2023.
The minister told journalists on Thursday during a weekly ministerial briefing in Abuja that before the pandemic, the government had successfully convinced Russia, the original builders of the steel complex, to evaluate its status and consider completing the steel facility, but could not proceed with the negotiations due to force-majeure caused by the COVID-19 pandemic.
Mr Adegbite said the deal with Russia involved a $2 million fee for technical audit to ascertain the state of the facility before work could begin, and that President Muhammadu Buhari approved the payment.
“We made frantic efforts to continue the negotiations with Russia after the lockdown, but progress was stalled again due to the current conflict between Russia and Ukraine,” the minister added.
Mr Adegbite had said in December 2021 that the technical assessment would be conducted early in 2022. The audit was to check any equipment or processes that could have become obsolete during the more than 40 years the facility has been in existence, he told SPGlobal.
The multibillion-dollar Ajaokuta mill was built by the Soviets between 1979 and the mid-1990s, but has never produced steel as the project was never completed. It was also mismanaged.
A concession of the facility India’s Global Steel Holdings was terminated, and the government said it plans to bring in new investors to take a percentage of the mill’s equity.
Mr Adegbite said the government would initiate “irreversible processes” to ensure the resumption and eventual completion of the steel facility, possibly, beyond the Buhari administration.
Similarly, when asked about gold mining activities in Zamfara State, the minister said the government halted mining activities in the area because the conflict in Zamfara has gone beyond mining.
“We try to nip them in the bud wherever they rear their heads. With the community reporting to us, we have a quick intervention force. We can’t be proactive, it is too expensive to maintain. But we have a quick intervention force,” he said.
“If we hear any mining happening in any nook and cranny, we move in there and dislodge them. Those that are arrested, we confiscate their equipment and they are prosecuted.”
Meanwhile, the minister also revealed that the country has attained self-sufficiency in Barite production and would no longer need imports from October 2022.
He explained that Barite is a mineral that is used in the oil and gas industry, and that Nigeria imports about $300 million worth of barite every year from Morocco.
“So when we came into office in 2019, we set up a body and said we must have made in Nigeria barite, to save us that kind of money and also possibly to export barite,” the official said.
In October last year, he said, made in Nigeria Barite was launched and that it is only produced in Nigeria up to industrial standard which meets international standards and is measured by the American Petroleum Institute (API).
Since it meets all international standards, the minister said nobody had to import barite into Nigeria from October last year and that the system is still in place.
He said there will be one transparent platform, where you put in your request from the miners to the processors and people who will bag it, and that everything is done online.
“We are now sufficient in barite production and we can now export to places like Ghana and South Africa, where they don’t have barite and they also do exploration. At least we are closer to them than Morocco,” he added.
Barite is one of the seven strategic minerals set to unlock the potentials of Nigeria’s solid minerals sector.
It is a key material used in the oil and gas industry as a weighting agent to increase the density of drilling fluids, principally for oil and gas exploration in order to minimise the incidence of blowouts.
The mineral, which can be found in Nasarawa, Plateau, Taraba, Benue, Adamawa, Cross River, Gombe, Ebonyi, and Zamfara States is estimated to have a proven reserve of 15 million metric tonnes.