A Review of the Nigerian Energy Industry

Nigeria’s 15m-ton annual steel production target doubtful

Steel plant31 January 2014, Abuja – The federal government warned yesterday that the country might be unable to achieve the 15 million tonnes  per annum capacity of local steel production set for the year 2020 in the nation’s drive to revamp the iron and steel industry.

The Minister of Mines and Steel Development, Mr. Musa Sada, sounded the warning in Lagos, while addressing stakeholders in the sector at a one-day forum organised by the Federal Ministry of Industry, Trade and Investment in collaboration with the Federal Ministry of Mines and Steel Development.

Sada explained that if activities in the iron and steel sector continued as it was currently being operated, it would certainly be unable to attain the 15 million tonnes per year target of locally manufactured  steel, set for seven years from now.

Loathing the fact that Nigeria, at the moment, imports about 17 million tonnes of steel yearly and produces only 2.5 million tonnes locally, the Mines and Steel Minister stressed that the situation was more wasteful because the country possesses over two billion tonnes of iron ore deposit, as well as over one trillion tonnes deposits of coal, a major ingredient in the production of steel.

Meanwhile, the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, at the same forum, stated that the nation was aiming at ending the importation of petroleum products into the country by the year 2017.

Aganga noted that Nigeria, riding on the $16 billion investment commitment already made in the local petrochemical industry by both indigenous and foreign investors, was targeting the termination of importation of refined petroleum products into the country.

“With the $16 billion investment  commitment in the petrochemicals industry of which $9 billion is from a local investor who has kicked off the setting up of an integrated petrochemical manufacturing plant, we are on our way to ending petroleum products importation by 2017,” he said.

Aganga added that the $9 billion integrated petrochemical plant being undertaken by the Nigerian investor requires the services of between 5,000 and 8,000 indigenous engineers, underscoring the need for rapid development of human capital within the country in pursuit of the industrial revolution objectives of the federal government.

He stated that in order to begin to address the serious human capital challenges facing the country, which would be further exposed as the industrialisation drive progresses, Industrial Training Fund (ITF), a parastatal under the Federal Ministry of Industry Trade and Investment in collaboration with the United Nations Industrial Development Organisation (UNIDO), was conducting the first ever National Skills Gap Survey (NSGS) with the result set to be released between March and April 2014.

Stressing the importance of mines and steel to the advancement of the nation’s economy, Sada said steel was expected to remain the world’s most important engineering material for some time to come.

He pointed out that backward integration is very important in steel production, saying that over two billion tonnes of iron ore deposits occur in various locations across the country while  one trillion tonnes of coal resources occur in 13 states of the federation creating  enormous potentials for Nigeria’s steel and metal industry with ever growing domestic market and access to neighbouring West African markets.

Sada said the Nigerian iron and steel sub-sector involved privately owned steel plants that use 100 percent scrap metals as raw materials.
“There are several private foundry companies operating at low capacity, cold rolled steel mills that depends on the use of imported hot rolled coils as feed stock showing the huge gap that exist in the nation’s steel industry,” he said.
He highlighted the major problems facing the steel industry as including Nigeria’s annual importation of about 17 million tonnes of assorted steel and allied products; local steel production being only from 100 per cent melting of scrap metals and also added that the issue of quality was a major concern.


– This Day

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