FG Signs MoU with Russian Consortium for Ajaokuta Steel

Nigeria, Russia Seal Ajaokuta Steel Deal

“The revival of the steel sector will also reduce importation of steel products into Nigeria, which is estimated at over $4 billion annually...”

Nigeria's Economic Growth: Ajaokuta Steel Plant resuscitation to generate 500,000 jobs.

The Federal Government has signed a Memorandum of Understanding (MoU) with Russian firm Tyazhpromexport (TPE) and its consortium to revive the Ajaokuta Steel Company Limited (ASCL) and the National Iron Ore Mining Company (NIOMCO). This move is part of President Bola Tinubu's administration's efforts to drive industrialization and economic growth in the country.

The MoU was signed by Minister of Steel Development Shuaibu Audu, who led the government's delegation, and TPE's General Director Egorov Sergei Anatolevich, along with other members of the Russian consortium. Salamatu Jibaniya, Head of Press and Public Relations at the Ministry, announced the development on Friday.

Ajaokuta Steel Company's Rich History

Ajaokuta Steel Company Limited was established in 1979 by President Shehu Shagari's government to spearhead Nigeria's industrialization drive. Located in Kogi State, the company aims to generate important upstream and downstream industrial and economic activities.

Revitalization Efforts

Previous attempts to revive the steel company have been made, including a concession to Japanese firm Kobe Steel in 2002 and later to Ispat Industries in 2004. However, these efforts were unsuccessful. In 2019, Nigeria and Russia agreed to collaborate on revitalizing the steel mill during the Russia-Africa Summit in Sochi.

This new partnership with TPE and its consortium is expected to bring the Ajaokuta Steel Company back to life, creating thousands of jobs and boosting Nigeria's economy.

This partnership is considered crucial and a bold step towards creating a sustainable foundation for Nigeria's industrialization. The Minister of Steel Development, Prince Shuaibu Abubakar Audu, met with the consortium in Abuja, urging them to develop a blueprint for the steel plant's revival within the shortest possible time. The move is part of President Bola Ahmed Tinubu's administration's efforts to resuscitate the steel company and boost industrialization in the country.

Key Benefits of the Partnership:

Job Creation: Expected to generate over 500,000 direct and indirect jobs

Economic Growth: Contribution to President Tinubu's goal of growing the economy to over $1 trillion by 2030

Reduced Importation: Decrease in steel product imports, saving scarce foreign exchange

Industrialization: Creation of a sustainable base for Nigeria's industrialization

The Ajaokuta Steel Plant, which was 98% complete as of 1994, has been moribund for decades. However, with the Russian consortium's involvement, the plant is expected to begin production in the Light Mill Furnace, producing iron rods for national infrastructure. This development is a significant step towards Nigeria's industrialization and economic growth.

The Nigerian delegation also inspected the facilities of Novostal M in Balakovo, Saratov region, which has an Electric Arc Furnace capacity of 1.2 million metric tonnes of steel products per annum and employs 3,900 workers.

“The revival of the steel sector will also reduce importation of steel products into Nigeria, which is estimated at over $4 billion annually, and will help save scarce foreign exchange,” he said.

As part of the visit, the Nigerian team inspected Novostal-M's facilities in Balakovo, Saratov region, and the company's private port. This partnership aims to create a sustainable base for Nigeria's industrialization, reducing reliance on imported steel products, estimated at over $4 billion annually. The project is expected to generate over 500,000 direct and indirect jobs, contributing significantly to President Bola Tinubu's goal of growing the economy to over $1 trillion by 2030.

Before the MoU signing, a TPE team visited the Ajaokuta Steel Plant and NIOMCO in August for a preliminary inspection. This assessment was crucial in securing the invitation to Moscow for the partnership. With the resuscitation of both the steel company and NIOMCO, Nigeria is taking significant steps towards reviving its industrial sector and boosting economic growth.