A large Nigerian steel complex, which was built 40 years ago and has never produced a single bar, coil or rod, may finally start production after President Muhammadu Bihari indicated the government wanted to sell it to private investors.
The state-owned Ajaokuta complex in Kogi State, built in 1979 with Soviet aid, has used up US$8 billion in public investment and has been beset by repeated stops and starts, ownership changes and poor governance, as reported in Bloomberg.
Nigeria sees its vast deposits of iron ore, much of it in Kogi State, as a possible way of diversifying and easing its dependence on the oil industry. The ore, if transformed into steel, could make other domestic industries such as construction more viable.
‘Ajaokuta is central to our diversification strategy,’ says Kayode Fayemi, Nigeria’s Mines and Steel Development Minister. Building up domestic steelmaking is ‘the least we could do for ourselves as a country and for our manufacturing sector’, he says.
The most critical piece of infrastructure – a rail line that would connect the plant to iron-ore mines and deliver the finished product – was never completed. Now, with work already under way, the rail spur line might just accept test trains as soon as August.
