The renovation of Ajaokuta Steel Company won’t be finished before the end of President Muhammadu Buhari’s tenure on May 29, 2023, according to the Minister of Mines and Steel Development, Olamilekan Adegbite.
This is coming as the war involving Russia and Ukraine has cost the former $2 billion deal to renovate the ailing Ajaokuta Steel located in Kogi State.
Adegbite revealed that President Muhammadu Buhari had already approved the release of the funds to the Russian firm since 2020, but that while they were planning to mobilise to site, the emergence of COVID-19 and the war disrupted the contract.
As it stands, the Federal Government has secured a fresh commitment from a British firm to revive the struggling Ajaokuta Steel Company Limited at no extra cost to the government.
Adegbite took to the weekly briefings coordinated by the Presidential Media Team on Thursday in Abuja, to explain current developments concerning the project.
According to the minister, “In October 2019, Nigeria’s President, Muhammadu Buhari and Russia’s, Vladimir Putin met at the Russia-Africa Summit in Sochi and agreed to revive the uncompleted Ajaokuta steel mill.”
He noted that constraints posed by the outbreak of the COVID-19 global pandemic also delayed the takeoff of the project.
Adegbite, however, did not name the British firm which will now handle the job.
Giving more insights, he explained that the arrangements with the Russian firm failed because the contract was awarded to a company with both Russian and Ukrainian interests.
He disclosed that the $2 billion is safe in the Federal Government account, adding that “the money has not even been given to anybody, the Russians can’t get any payment now with the way things are happening in the world. All their accounts are blocked.
“So the $2 billion is still with the Federal Government. Is just that the president has given the money for that purpose. We had started the process of procurement, then with this war, we can no longer go that way.”
The minister revealed that the “British firm is offering to do it for us free now”, adding that “by the grace of God, we have started an irreversible process. The problem with Ajaokuta is actually what we call force majeure. Nobody thought of the COVID, because the plan was to deliver Ajaokuta this year 2022.”
The minister regretted, however, that the steel company may not be fully revamped under the current administration, as earlier promised.
“I’ve said it before, when we came back from Russia, yes, I went to the public and said look we will deliver Ajaokuta before the end of this tenure. I pray that I’ll have a chance to go back and apologise and explain what happened to the people before I leave office.
“It is due to no fault of ours. Everybody was ready to go, but unfortunately, COVID came in. So, it is a force majeure”.
Adegbite, who spoke of his impact since becoming the minister overseeing the sector, said his ministry is currently working on projects across the six geopolitical zones which will be commissioned in July, this year.
He listed the launching of made in Nigeria barite, establishment of mining-related clusters in the six geopolitical zones of Nigeria and Jewelry Making Training Center in Abuja where 45 students recruited from all the 36 states and FCT are being trained on jewelry making as some of his impact in the sector.
“We are about to conclude the bitumen auction, we have completed the automation of the Mining Cadastre System to meet international full standards for online mining title and licence applications and approvals.
“The ministry also has large-scale gold production platform through Segilola Gold project and proposed refining through Dukia Gold and Kian Smith.
“The famous Ladi Kwali Pottery Center is being remodelled and resuscitated to train Nigerians in modern pottery and ceramic works.”
He noted that the Nigeria Mining Development Company (NMDC) has signed a Memorandum of Understanding (MoU) with DICON to produce alloys hitherto imported from China.
“Under the MoU, brass will be processed for armament and lead for ammunition.
“We have repositioned the SMDF and we are finalising an amendment to the Act to further institutionalise the fund along global best practices.”
Adegbite revealed that Nigeria has commenced gold exports through the Segilola Resource Development, which is expected to export 100, 000 ounces of gold annually.
“Their production capacity is 100,000 ounces per annum. You can plan on that. We know how much we are charging per ounce of gold at that rate. So you know that in a year, this is what we are expecting. We charge at 3% but the price will vary because our price is based on the cost that is going at the international market, the New York exchange will quote the price of gold at any particular point in time.
“That’s our reference price. So it’s not fixed as in like, Oh, it must be N10 every year. Gold went as high as $2,500 per ounce at a point. And I think it is worth about $2,290 now, on the stock exchange. So this is the price as used to calculate that.”
