Port Harcourt — Without getting Ajaokuta Steel Plant to operate at optimal capacity, it will be impossible for the development of the solid mineral sector in the country to take place, an Economist has said.
This is as the Minister of Mines and Steel Development, Olamilekan Adegbite, recently announced that FG has designated seven key minerals, alongside other metals, such as titanium, tungsten, lithium and cobalt with high applications in futuristic industries such as aerospace, telecoms and electric vehicle manufacturing, to boost the nation’s economy.
But the Economist argued that Ajaokuta Steel Plant has the technology, Basic Oxygen Converter/Furnace, to refine iron ore, coal and other solid minerals, hence, the Ministry must get Ajaokuta working before the sector can make significant progress.
South South Coordinator, Institute of Chartered Economist, ICEN, Mr. Friday Nathaniel Udoh, said there must be a robust framework for synergy between the extractive industry and stakeholders like state and local governments to invest in the sector.
Udoh explained that Katsina Steel Rolling Company Limited, Oshogbo and Jos Steel Rolling Mill, Qua Steel Rolling Mill, Delta Steel must be made functional as they have a combined capacity to provide 25,000 jobs and over N276.5billion annual revenue to the country.
He further explained that the Ministry of Mines and Steel Development must established confidence, transparency as well as develop a model for funding of solid mineral processing and development to boost the nation’s ailing economy.
“That at the height of corruption ridden privatization transactions, we saw viz- a -viz; the 630,000mt per annum’s government built rolling mills capacity, comprising the Katsina Steel Rolling Company Limited, Oshogbo and Jos Steel Rolling Mill, making these plant technically and operational incapacitated.
“Based on the prevailing circumstances, these plants sub-optimally operated translating to N172.1billion loss per year in revenue to the economy and over 15,000 job losses; similarly, there was N7bllion loss in man-hours per year, across the industry value chain. This, informed our humble appeal to the government through the supervising ministry for a financial lifeline extended to the affected plants including Qua Steel Rolling Mill in Eket, Akwa Ibom state.
“That the Ministry of Mines and Steel Development, pending the overhaul of Bureau of Public Enterprise, invokes the constitutional provisions, among others, cited in section 16 (1) (a) and (b) to ensure that these plants commence operations and that whatever funding that government commits is appropriately utilized by the plant operators.
“That the same initiative be extended to Delta Steel with install capacity to produce 1 million metric tons of liquid steel, an equivalent of 960,000 tons of billets per annum just in N104.4 billion cost per year to economy followed with over 10,000 jobs its supposed to have generated, across steel value chain, corresponding to an over N3.6billion loss to economy, due to poor capacity utilization.
“The plant was also built to produce intermediates and some other products, including cold briquettes, Direct Reduced Iron, industrial gases just as burned hydrated lime, oxygen, argon and nitrogen. Until the plant shut-down, eventually the privatization exercise, the plant was a major supplying source, devoted two-thirds of its billets for inland rolling mills in the country, notably the Qua steel, Katsina, Jos and Oshogbo with the balanced billets used for production of other finished products.
“That the prosperity of the economy hinges on presenting a coherent, yet implementable roadmap for the mineral based industry as we implore state governments to float a bond for investment in mineral based industries including, NIOMCO, Ajaokuta the already privatised firms, also in green fields, mid and downstream industries to sustainably support economic growth. Similarly, the ministry should fashion out a concise and implementable financing model to attract investment in this industry from other levels of government in the country.”
The Economist also frowned at illegal and indiscriminate mining of solid minerals in northern Nigeria by foreigners, calling for a strong political will to put an end to the menace.
“The Ministry of Mines and Steel Development reach out to Ministry of Foreign Affairs and relevant agencies of government so as to minimize surge in indiscriminate and illegal mining by foreigners which constitute a threat to national economic stability and security.
“This initiative should be replicated to position the extractive and mineral-based sub-sector such that large and small entities within the sub-sector and their major stakeholders are purposely brought together to boost this business line.”
On the agreement signed between Nigeria and Russia on the completion of Ajaokuta Steel Company, Udoh expressed fears that Russia my not be able to fund the project with the prevailing economic situation.
“My fear is funding amid the present economic trends and slipped of Nigeria economy to recession. It was recession that put an end to the completion of the first phase of Ajaokuta at 20% completion.
“With this financial difficulty anticipated. I have to expressed the confidence on the Russian company ability just to build confident of banks and other investors so that they could release funds. Also, for the Federal Government to develop a robust investment model that allowed other tiers of government to invest on mining and mineral processing industry, including steel.”