Ajaokuta Steel Mill

Last updated
Ajaokuta Steel Mill Company
Company type State-owned enterprise
IndustrySteel
Founded1979 (1979)
FateIn minimal operation
Area served
 Nigeria
Website www.ajaokutasteel.com
Ajaokuta Steel Company.jpg Ajaokuta-factory.JPG
Ajaokuta Steel Company.jpg

Ajaokuta Steel Company Limited (ASCL) popularly known as Ajaokuta Steel Mill is a steel mill in Nigeria, located in Ajaokuta, Kogi State, Nigeria. [1] Built on a 24,000 hectares (59,000 acres) site starting in 1979, [1] it is the largest steel mill in Nigeria, and the coke oven and by-products plant are larger than all the refineries in Nigeria combined. [2] However, the project was mismanaged and remains incomplete 40 years later. [3] Three-quarters of the complex have been abandoned, and only the light mills have been put into operation for small-scale fabrication and the production of iron rods. [4]

Contents

History

A feasibility study for the production of steel was first awarded to the British, and later undertaken by the Soviet Union under a cooperation agreement with Nigeria. In 1967, Soviet experts recommended prospecting for iron ore in Nigeria, as the known deposits were of poor quality for steelmaking. In 1973, iron ore of the required quality was discovered in Itakpe, Ajabanoko, and Oshokoshoko. The Ajaokuta Steel Company Limited was incorporated in 1979 under President Shehu Shagari who began the project which was 84% completed by the time of his removal from office in 1983. The steel mill reached 98% completion in 1994, with 40 of the 43 plants at the facility having been built. [2]

To supply the Ajaokuta Steel Mill with raw materials and connect it with the world market, in 1987, a contract was awarded to construction company Julius Berger for the construction of Nigeria's first standard gauge railway, from the iron mines at Itakpe to the steel mill at Ajaokuta, and later continuing to the Atlantic Ocean at Warri. [5] However, both projects have been mismanaged. The Ajaokuta Steel Mill is still unfinished four decades after construction began. [2]

In 2002, the Nigerian government under Olusegun Obasanjo concessioned the project to Japanese Kobe Steel in an attempt at revitalization, however without much success. In 2004, the project was again transferred, this time to Ispat Industries. The deal was financed by Global Infrastructure Holdings Limited (GIHL) (now Global Steel Holdings Limited, GSHL), which is chaired by Indian steel magnate Pramod Mittal. The concession ended in 2008 after the government accused GIHL of asset-stripping. GIHL then sued Nigeria at International Chamber of Commerce. [6] The dispute was initially resolved in 2016, with Nigeria regaining control of the Ajaokuta Steel Mill in exchange for GIHL retaining the Nigerian Iron Ore Mining Company (NIOMCO) operating at Itakpe. [7] [8] In 2022, the Nigerian government paid $496 million to GSHL to settle the claims. [9]

The Ajaokuta Steel Mill still had not produced a single sheet of steel by December 2017. [2] The light mills were finally put into operation in 2018 for small-scale fabrication and the production of iron rods. However, three-quarters of the plant have been abandoned, including the large-scale equipment and the internal railway. [4]

In 2019, at the Russia-Africa Summit in Sochi, Nigerian President Muhammadu Buhari and his Russian counterpart Vladimir Putin agreed on a revitalization of the steel mill with Russian support. A taskforce within the Nigerian government was set up with a view to revamping the project with funding from the Afreximbank and the Russian Export Center. However, the COVID pandemic delayed and ultimately thwarted these plans. [6]

In January 2024, the Nigerian government announced that it had commenced discussions with Chinese steel company Luan Steel Holding Group with the aim of reviving the Nigerian steel industry, including the production of military hardware at Ajaokuta Steel Mill. [10]

Railway

The Warri–Itakpe Railway fell into disrepair, and part of the track was vandalised. In 2016, the Nigerian government awarded contracts to the China Civil Engineering Construction Corporation and Julius Berger to repair and complete the railway. [5] Test runs began in November 2018, [11] and the railway was officially inaugurated by President Muhammadu Buhari on 29 September 2020. [12]

Criticism

According to Nigerian financial planner and economic strategy consultant Kalu Aja, a series of policy failures has prevented the Ajaokuta Steel Mill from being completed and put into operation 40 years after its construction first began. Aja contends that three major requirements must be satisfied before the mill can produce steel: the Nigerian Iron Ore Mining Company (NIOMCO) operating at Itakpe must be operational, since Nigerian iron must first be processed before being suitable for steel production; the Itakpe to Ajaokuta railway line must be functional to ensure continued supply; and the blast furnace must be operational. Blast furnaces operate continuously for years at a time without being shut down and thus require a steady supply. Aja concludes, that since none of the three requirements are met, the furnace at Ajaokuta has never been turned on because Ajaokuta has never had raw materials available to ensure continuous production. [13]

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References

  1. 1 2 Robson, Lorna (2005). Nigeria. London: Evans Brothers. p. 27. ISBN   9780237527563.
  2. 1 2 3 4 Oluyole, Francisca (26 December 2017). "How Nigeria's Largest Industrial Project Failed". Premium Times (Abuja).
  3. ↑ "Adegbite: Conspiracy Led to Failure of Ajaokuta Steel Company - THISDAYLIVE". www.thisdaylive.com. Retrieved 2023-06-04.
  4. 1 2 "Nigeria: Steel factory will open after 40 years". Al Jazeera English. 16 June 2018.
  5. 1 2 "Itakpe-Ajaokuta-Warri rail line to start operation in June 2018 - Rotimi Amaechi". Vanguard News. 7 August 2017.
  6. 1 2 Adekoya, Femi (2023-01-13). "Ajaokuta Steel Plant: Like refineries, a story retold, promises unkept". The Guardian Nigeria News - Nigeria and World News. Archived from the original on 2023-01-24. Retrieved 2024-01-10.
  7. ↑ "News: FG Ends 8 Years Dormancy, Takes Over Ajaokuta Steel Complex". Ajaokuta Steel Company Limited. 2016-08-02. Archived from the original on 2022-09-09. Retrieved 2024-01-10.{{cite web}}: CS1 maint: unfit URL (link)
  8. ↑ "Ownership crisis ends, Nigeria retakes Ajaokuta Steel Company". Premium Times Nigeria. 1 August 2016.
  9. ↑ Izuaka, Mary (2022-09-04). "Nigeria to pay $496 million to settle Indian firm's claim over Ajaokuta steel". www.premiumtimesng.com. Retrieved 2024-01-10.
  10. ↑ "FG, China to build steel plant, military hardware in Ajaokuta – Minister". Daily Trust. 2024-01-05. Retrieved 2024-01-10.
  11. ↑ Ejike, Ejike (26 November 2018). "Itakpe Train Service Begins Operation Today". Leadership.
  12. ↑ Agbakwuru, Johnbosco; Dirisu, Yakubu (29 September 2020). "FG commissions Itakpe-Warri rail line". Vanguard (Nigeria).
  13. ↑ Aja, Kalu (2018-08-23). "Why Ajaokuta Cannot Make Steel". Nairametrics. Retrieved 2024-01-10.

7°30′36″N6°41′20″E / 7.510°N 6.689°E / 7.510; 6.689

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