‘Nigeria lags behind global benchmarks on steel consumption per capita’

Federal Government, through the Ministry of Solid Minerals Development, has said Nigeria currently lags behind global benchmarks on steel consumption per capita with potential to grow.

Nigeria is the 12-richest country in the world in terms of iron ore deposits with 2 billion tons of iron ore reserves, lower than Guinea with 4.6 billion tons of iron ore reserve and Australia with 17 billion tons.

At 0.1Mtpa iron ore production, Nigeria’s reserves remain underexploited compared with Brazil with 370Mtpa, China – 1070Mtpa, Russia – 101Mtpa, India – 230Mtpa, and Australia with 433Mtpa iron ore production.

However, Nigeria can expect an increase in demand for steel in the coming decade driven by industrialisation, Kayode Fayemi, minister, solid minerals, said yesterday in Lagos at the 2016 Stanbic IBTC Bank Iron and Steel business session.

South Korea leads the world due to high industrialisation levels. South Korea’s demand for steel is largely fuelled by increased industrial activity, while in Nigeria demand is largely met by imports using scraps and cold rolled steel bars.

The minister said an estimated $3.3 billion of much needed forex was spent on steel imports annually. Nigeria imports an estimated $3.3 billion of processed steel and associated derivatives, representing 80 percent of the $4.2 billion total metal products imported per year (25MT/annum).

“The FGN is of the view that the Nigerian steel industry can be attractive to investors due to the large untapped demand potential similar to cement in 1990s,” Fayemi said.

He said the current market size of $3.3 billion/annum had potential to grow to $15.1 billion/annum with increased industrialisation.

The growth can of course be driven off domestic feedstock that is the 12^th largest iron ore deposits globally (second in Africa) with over 2 billion tons of iron ore reserves.

“To turnaround the broad mining and metals sector, at the end of March 2016, we completed a roadmap anchored on a set of key ideas,” he said.

Nigeria will focus on rebuilding its minerals and mining and related processing industry in three phases, including win over domestic users of industrial minerals that are currently importing, focus on expanding domestic ore and mineral asset processing industry, and return to global ore and mineral markets at a market competitive price point, the minister said.

In his comment, Sani Seun, president, Miners Association of Nigeria, assured the banks and investors that local players had a number of site iron deposits that were grossly underutilised.

“We are ready to participate in the end-to-end iron production. Indigenous players are willing to participate with big players that will come into the country,” he said.