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Nigeria’s hope to produce steel brightens as ANRML set to invest $600m in local plant

Nigeria, which has struggled but failed to produce steel locally for about 40 years, may be inching its way closer to realising this dream, as a local company has announced its plans to invest into the industry.

African Natural Resources and Mines Limited (ANRML), has to invest $600m (N183.6bn, official CBN rate) into a unified iron ore mining, processing and steel production project, which includes the capacity to directly convert iron into direct steel for manufacturing, minister of finance, Zainab Ahmed, announced in December 2018.

ANRML will be taking advantage of the shortfalls in the steel industry in Nigeria to position itself as the next generation steel company in Nigeria. Incorporated in 2014 as part of African Industries Group, ANRML plans to embark on the integration of steel production.

Its planned investment was described at the time as “the first major investment in the mining sector in more than two decades,” according to Ahmed.

Since its inception in 1979, Ajaokuta Steel Mill, Kogi State, has not produced a single beam of steel. But what Ajaokuta Steel Mill could not accomplish, ANRML is positioning itself achieve and meet the nation’s steel challenge in the manufacturing industry.

Situated in Kagarko, Kagarko Local Government Area of Kaduna State, the “project will have a capacity of 5.4 metric tonnes per annum and will create 3,500 direct jobs and thousands of indirect jobs,” the minister added.

In addition, the steel plant will boost the economy as it will minimise the importation of materials that could now be locally sourced.

This promises to be a major shift in the quest to meet up with the local demand of iron in the country, as it is intended that steel from the plant will supply local manufacturers.

Efforts to establish the level of work done by the company yielded no reasons. An official of ANRML who spoke with BusinessDay at the company’s Apapa, Lagos office, declined to give any details. The company was on course with its programmes, he said, and requested our correspondent to wait for two months when the person authorised to speak on behalf of the company would be back.

Until recently when its operation was cut shot due to vandalism of gas pipeline, Ajaokuta Steel Mill used to supply electricity to the national grid, thereby improving the electricity usage of the locality.

On its part, ANRML, according the minister, will generate up to 36 megawatts of electricity to the national grid, thereby improving the local consumption of the immediate environment.

“About 36 megawatts of electricity is to be generated from the waste heat which will increase power supply to Kagarko Local Government to help develop other industries and urbanise the local area. The surplus will also be added to the national grid,” the minister said.

“There will be a captive power plant from waste heat generated in the process to power all the process units in the plant and township,” the company says.

ANRML may have ventured into steel production because of the vacuum created by the state-owned Ajaokuta Steel Company Limited (Ajaokuta Steel Mill) which failed to live up to the purpose at which it was created.

Ajaokuta Steel was primarily established to take care of the steel requirements of the economy so that Nigeria would no longer dependent on the importation of iron steel.

Recently, Abubakar Bwari, Minister of State, Mines and Steel Development, announced that eleven companies have shown interested in buying the steel mill. But the minister explained that the government is not ready to give out the company because the necessary infrastructure for smooth take off are lacking.

These, according the minister, included rail network, dredging of Lokoja and Warri ports which are yet to be completed.

“The policy of the government is that it will not release Ajaokuta steel just like that; what we are planning to do is to regulate and create enabling environment for the company to strive,” Bwari said.

With this question, a project which stood at $4.6bn as at 1980 when President Shehu Shagari laid the foundation stone, nicknamed the “bedrock of Nigerian industrialisation” at the time, now exists only in our minds.

In what has been described as wasted generation of engineers, it has been said that most of the engineers that were trained in Russia to operate different equipment will be retiring this year, having their skills retiring with them without putting them to use even for one day.

 

JOSEPH MAURICE OGU

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