AFRICA

Alake: $1bn Kogi Steel Project To Bring Jobs, Foreign Exchange, Economic Independence For Nigeria

The Minister of Solid Minerals Development, Dele Alake, on Sunday hailed the $1 billion new iron-ore-to-steel project planned for Kogi state as a breakthrough in the federal government’s campaign to make local value addition the model of development in the solid minerals sector.

Addressing the promoters, Chart and Capstone Integrated Limited of Nigeria and Sinomach-He of China-on the sidelines of the visit of President Bola Tinubu to China in Beijing, Alake pledged the cooperation of the federal government with the promoters to ensure the delivery of the project as fast as possible.

He said the federal government had reversed the pit-to-port policy under which mining companies exported raw minerals  to  extraction with  local value addition which is the best guarantee of jobs for the youths, skills transfer and better balance of trade between the country and her trading partners.

Alake, according to a statement by his Special Adviser, Kehinde Bamigbetan, noted that to promote local value-addition, he had announced that applicants for licences to mine must disclose plans for processing the raw minerals as part of the conditions for approval.

“The trade balance between Nigeria and China is over $1 billion in favour of China because the minerals imported from Nigeria are essentially in raw forms.

“Once Nigeria starts to export finished or semi-finished value-added mineral products to China and other trading  partners, our balance of trade will be more favourable, and our foreign exchange earnings will improve. With aggressive local value addition and the revenue from it, the prospects of reducing our debt burden in the nearest future is possible,” he said.

Presenting the Memorandum of Understanding (MoU) signed by both companies to the minister, Chief Executive Officer of Chart and Capstone Integrated Limited, Chief Abel Edijala commended him for putting in place an efficient licence application process that works without red tapes and corruption.

“ We applied for an exploration licence for our iron ore mining project at the Mining Cadastral Office, and we did not need to see anybody before our application was approved within a reasonable period. This shows that the system you have put in place is fair and works for all.  I must commend you for this,” Edijala said.

He explained that the model is that the iron ore site will feed the steel manufacturing plant and grow to service the needs of the Nigerian economy for industrialisation.

Edijala further stated that the project will require tax waivers for the importation of equipment and tax holidays during the take-off period to cope with the fluctuations in the macro-economic system and meet targets.

Explaining Sinomach-He’s readiness to start the project, its Vice Manager, Hou Encai said the state-owned company was established in 1958 to meet the needs of the Chinese economy and has over 15,000 staff including 2,000 engineers on its payroll.

Encai said the company engages in mining, iron making, steel rolling, steel making, the construction of infrastructure, and handles 80 per cent of the steel needs of the Chinese economy.

“In mining, we have the technology on how to excavate the ores from the earth. We can evaluate the iron ore potential of any site and tell you what the feasibility of mineral extraction is on a site.

“Secondly, we have the equipment needed, including excavators and drilling machines for mining iron ore. For transportation of iron ore from site to the factory, my group produces the trucks,” he said.

According to the MoU, Sinomach-He shall be the master contractor and deploy its expertise in the engineering, procurement, installation, commissioning, and training of the project.

Other participants at the meeting were the Executive Secretary General, Working Committee for Overseas Co-operation of China Association of Small and Medium Enterprises, Prof. He Lixiong; Chairman, Belt and Road Africa Economic Initiative, Mr. Innocent Okonkwo, Sinomach-He overseas  General Manager, Li Ke, and Senior Project Manager, Deng Shiyuan.

Earlier, Nigeria’s Consul-General to China, Gbadebo Afolabi confirmed the integrity of Sinomach-He, disclosing that a team from the embassy had conducted due diligence on the company and found it suitable for the transaction.

Emmanuel Addeh

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