FG seeks 60% local content to revive Ajaokuta Steel Company

The Federal Government said on Monday it would be sourcing up to 60 percent local content to revive the Ajaokuta Steel Company.

Olamilekan Adegbite, the Minister of Mines and Steel Development stated this in Abuja during an interaction with newsmen, noting that the government is keen on local content promotion and wealth creation and would only source for foreign content when they are not locally available.

“We’re working on what we call local context, right now we proposed 60% local content. Everything that is required in Ajoakuta and National Iron Ore Mining Company, (NIOMCO) that is obtainable in Nigeria must be sourced from Nigeria. We don’t want everyone to come here and dump everything on us, only those things that we cannot provide can be brought from outside so right now we are at that stage of 60/40- 60% local content and 40% foreign.”Adegbite said.

The minister explained that funding for the project would be coming from two sources- Russian Export Centre, which is providing $450m and the Afrexim Bank, bringing $1b which sums up to a total of $1.45b.

According to him, the Russian technical experts will come, do the audit which will lead to them giving us an exact figure of how much it will cost to resuscitate Ajoakuta and National Iron Ore Mining Company (NIOMCO).

“The two are tied together and once this is done, of course, there will be negotiations. We won’t just take whatever they give us, there will be negotiations and at the end of the day, a sum will be agreed and contract formed and that is the basis that we will precede,” he said.

Speaking further, the minister said: “Essentially, the project on the collaboration with Ajoakuta is the build, operate and transfer (BOT. President Muhammadu Buhari and President Vladimir Putin, sat together at a bilateral and agreed on a government to government cooperation to resuscitate Ajoakuta because the Russians built Ajoakuta when they were the Soviet Union in collaboration with the Ukrainians. This is why we have gone back to them. The whole essence is for them to come here, assess the plant and the job to be done. That is what we call a technical audit; the Russian government has nominated a contractor who will do the job.”