FG wades into TCN/Ajaokuta Steel crisis

…as steel company to produce rods for road construction

The Federal Government is to investigate the ongoing crisis between the Ajaokuta Steel Company and the Transmission Company of Nigeria (TCN), over a N33bn debt.

Shuaibu Audu, minister of Steel Development, stated this on Thursday while fielding questions from State House journalists, after meeting with President Bola Tinubu at the Presidential Villa, Abuja.

TCN had disconnected Ajaokuta Steel from the national grid, over an alleged N33 billion unpaid electricity bills that it accumulated over the years.

“This is one of the things I spoke to the MD of Ajaokuta, and this was one of the questions I asked and we’re going to get to the bottom of it.

“The minister who questioned the rationale behind the N33bn consumption figure, added “We don’t know why the consumption of so much electricity in a place that is not operating at full capacity.

“Part of what we also need to do is that we’re trying to revive Ajaokuta Steel in piecemeal, and so we may not have the capacity to be able to pay all those outstanding amounts immediately.

“Part of what the MD of Ajaokuta told me is that most of the money is in interest payments.”

He said the electricity company that disconnected the steel mill was also a government agency. “So, if we as a government ministry, and other government agencies are working hard to revive Ajaokuta, we should not have another hand within the same government making things very difficult for us.

“Part of what we plan to do is to sit down on the table in the next few days and quickly come up with a plan so they can put things back in order.”

He said the effort to revive the Ajaokuta Steel was a gradual process, adding that “Ajaokuta cannot be revived overnight”

“This is an institution, a plant that has not been working for 45 years. It is a difficult task to try and get it back on track.

“So, we need the support of the entire government apparatus, we need the support of stakeholders to be able to do this difficult job,” the minister said.

“This job is not a job that myself and Mr. President can do alone. We need the support of everyone, including the electricity companies to be able to help us to get this project back on track, so that we can create the hundreds of thousands of jobs that I want to create for Nigerians.”

He said the president approved for the ministry about N35bn for the light steel section of the plant to produce locally.

“The first phase of the project. for Ajaokuta Steel Plant, to revive the entire steel plant will cost somewhere between $2 million to $5 million, however, to restart the light steel section of the mill is going to cost us about N35 billion. So, we’re going to the market to show proof of consent to raise this money from local financial institutions to be able to restart that.

He disclosed that he was at the Presidential Villa to brief the president in the company of the minister of defence, Mohammed Badaru

“We discussed three critical matters. Number one was that we briefed him on the minister of defence and his recent trip to China.

“We were in China on January 1, 2024. We were there till January 8. And met with the Lu’an Steel Holding Group, which is one of the largest steel companies in China. It is among the top 20 steel companies in China. They produce about 20 million metric tonnes of steel per annum. We had very meaningful discussions with them and they agreed and made a commitment to set up a new steel plant in Nigeria, where thousands of jobs would be created, and they would invest billions of dollars in foreign direct investments into Nigeria.

“In our discussions with Lu’an Steel Holding Group, they mentioned that they would send an advanced team to Nigeria after the Chinese New Year. Sometime at the end of February 2024.

He said “When the team is on ground, we would like to also give them an audience with the president.

He said they also briefed the president on plans to set up a military hardware facility in the Ajaokuta steel plant and based on that, the Chinese team would help us to build that military hardware capability in Ajaokuta, in one of the production units. And so that’s the first agenda on the table for the joint meeting.

“Mr president gave me approval towards the end of last year to raise some money to restart and rebuild the light steel mill of the Ajaokuta Steel Plant to be able to produce iron rods, which would be taken by the ministry of works.

“The minister of works, David Umahi, has already written a letter to me through his ministry, guaranteeing that they will be off-takers in the iron rods that are being produced.

“The president under the Renewed Hope Agenda, which the minister of works is driving plans to construct about 30,000 kilometres of roads across Nigeria, where they will need about 7 million metric tonnes of iron rods. We can produce about 400,000 tonnes of those iron rods in Ajaokuta if we’re able to restart the steel plant,” he noted.