$6bn Ajaokuta Steel plant as­sets de­pre­ci­ates 3% as FG dilly-dally on com­ple­tion

Nige­ria’s steel im­port bill hits $3.3bn

Business a.m. - - NEWS - Nse An­thony-Uko, in Abuja

QUAL­ITY OF AS­SETS AT THE $6 BIL­LION Ajaokuta Steel Com­pany Lim­ited (ASCL), Nige­ria’s largest steel plant, has suf­fered three per­cent de­pre­ci­a­tion as the fed­eral govern­ment con­tin­ues to politi­cise its com­ple­tion.

A re­port on the lat­est tech­ni­cal au­dit sighted by busi­ness a.m. in­di­cated that the steel com­plex, has de­pre­ci­ated to 95 per­cent com­ple­tion from its pre­vi­ous 98 per­cent with only $652 mil­lion ad­di­tional In­vest­ment needed to com­plete it and make it fully op­er­a­tional.

busi­ness a.m. checks show that Ajaokuta Com­plex has the ca­pac­ity to pro­duce one mil­lion met­ric tonnes of steel, one mil­lion met­ric tonnes of coal, man­ganese and lime­stone, among oth­ers.

Due to lack of op­er­a­tions at Ajaokuta Steel, Nige­ria to­day im­ports steel val­ued at $3.3 bil­lion ev­ery year. An av­er­age of steel prod­ucts such as stan­dard plates, hot-rolled coil, cold-rolled coil and re­bar is es­ti­mated at $464.7 us­ing Chi­nese prices, which means that Nige­ria im­ports roughly 7.1 mil­lion met­ric tonnes of steel an­nu­ally. The num­ber could have been one to five mil­lion met­ric tonnes lower had Ajaokuta been pro­duc­ing and ex­pand­ing op­er­a­tions since 1979, ex­perts say.

Con­trary to prior in­for­ma­tion that the equip­ment in the ASC are ob­so­lete, the tech­ni­cal au­dit re­port in­di­cated that equip­ment and fa­cil­i­ties are ro­bust, rugged and de­signed with 25 per cent safety fac­tor sim­i­lar to plants in Rus­sia and Ukraine that have been run­ning for over 100 years.

“The sit­u­a­tion in the Steel Plant’s equip­ment and fa­cil­i­ties are sat­is­fac­tory. Me­chan­i­cally, the Steel Plant equip­ment and fa­cil­i­ties are gen­er­ally in good con­di­tion, though they also in­di­cated that some fa­cil­i­ties like the electrics, in­stru­men­ta­tion and in­su­la­tion needs to be re­placed, up­graded and mod­ern­ized” the tech­ni­cal au­dit re­port in­di­cated.

High­light­ing the po­ten­tial of the com­pleted, the re­port showed that the plant would cre­ate no fewer than 10,000 di­rect and over 500,000 in­di­rect jobs in its first phase, when fully op­er­a­tional.

The plant would also boost the na­tion’s for­eign ex­change earn­ings; of­fer great op­por­tu­nity for var­ied ca­pac­ity build­ing; vastly in­crease eco­nomic op­por­tu­ni­ties for the host com­mu­ni­ties and di­ver­sify the econ­omy.

Though com­ple­tion of the com­plex holds enor­mous po­ten­tial for Nige­ria’s tech­no­log­i­cal ad­vance­ment, ex­perts say the com­ple­tion of the Ajaokuta Steel plant has been slowed by lack of po­lit­i­cal will of suc­ces­sive gov­ern­ments after for­mer pres­i­dent Shehu Sha­gari brought the plant to 84 per cent com­ple­tion be­tween 1980 and 1983; as well as per­sonal in­ter­est of ma­jor po­lit­i­cal of­fi­cer hold­ers in the steel com­pany

Baba­jide Suru, general man­ager, En­gi­neer­ing Ser­vices at the Ajaokuta Steel Com­pany main­tains that the plant has reached the point where com­plet­ing it is in­evitable.

Ex­plain­ing dur­ing a re­cent tour of the fa­cil­ity, Suru main­tained that no na­tion can de­velop tech­no­log­i­cally with­out steel, not­ing coun­tries like Ja­pan, Ger­many, South and North Korea all de­vel­oped be­cause of steel.

Ac­cord­ing to him, the equip­ment in the plant is still avail­able to be used de­spite all the mis­in­for­ma­tion that the plant is ob­so­lete.

He said about 72 per cent of steel made glob­ally still uti­lize the blast fur­nace method. US, China, Ja­pan are all uti­liz­ing blast fur­nace tech­nol­ogy

“It is pos­si­ble to com­plete this place. All the raw ma­te­ri­als re­quired to make steel are avail­able in Nige­ria within 80 kilo­me­tre ra­dius to Ajaokuta. Ja­pan the high­est pro­ducer of steel to­day, but has none of raw ma­te­ri­als lo­cally. They im­port all the raw ma­te­ri­als to make steel.

The steel plant is sit­ting on an 8 kilo­me­tre square of land. Land area, 24,000 hectares, within the steel plant we have 68 kilo­me­tres of good roads, 57 kilo­me­tres of rail roads, 24 kilo­me­tres un­der­ground ca­bles tun­nels.”

“About $6 bil­lion has been sunk into the steel plant till date and what is needed to com­plete it is $652 mil­lion and this has been drag­ging for over 30 years de­spite that there could be $652 mil­lion some­where in one politi­cian’s hand, or buried in a soak away some­where.”

“I don’t be­lieve it is the $652 mil­lion that is the prob­lem but the po­lit­i­cal will.

L-R: Bald­win Nwankwa, co-head, Thom­son Reuters Refini­tiv West Africa; Jonathan Owens, head, in­vest­ment, ad­vi­sory and wealth, mid­dle east and Africa; Candice Dott, head of mar­ket de­vel­op­ment; Ini Ebong. win­ner of the Peo­ple’s Choice award; and Son­wabise Se­bata, head, cor­po­rate com­mu­ni­ca­tion, Africa, at the Refini­tiv (for­merly Thom­son Reuters) ex­cel­lence award to customers in Vic­to­ria Is­land, La­gos, re­cently

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