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Ajaokuta Steel Company needs $1bn for rehabilitation —Association

By News Express on 23/10/2015

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Mr. Sanusi Mohammed, Secretary-General, African Iron and Steel Association, said about 1.1 billion dollars would be required to revive the Ajaokuta Steel Company in Kogi.

Mohammed told the News Agency of Nigeria on Thursday in Abuja that the association estimated that the sum would be used for the internal and external rehabilitation of the steel company.

He said the fund would be used to rehabilitate the steel production plant, complete the remaining blast furnace, raw materials sites and construction of railway and access roads for easy movement of steels.

According to him, if the fund is released, Ajaokuta rehabilitation can be completed within three years, including the external infrastructure.

Mohammed, however, said that if 300 million dollars could be released from the amount required, it could be used to rehabilitate part of the company for mini production to commence.

He said 43 smaller companies with different areas of specialisation were located in Ajaokuta, adding that they could only operate if the steel company was revived.

“If government can invest 300 million dollars for a start on Ajaokuta steel company, at least 25 out the 43 companies will commence operations on materials for producing cars.

“Some will be producing railway steels, flat sheet, bitumen among others; the funds that will be generated through these 25 companies could be used to complete Ajaokuta steel companies.”

The secretary-general said the Ajaokuta company had 78 per cent required materials or deposits within 150 kilometres radius from the plant.

Mohammed said over the years, all proposals to government for the development of the deposits and their modes of transportation, especially for limestone, fireclay and dolomite had not yielded the desired result.

According to him, other smaller steel companies in Nigeria will not require much fund for their rehabilitation, compared to Ajaokuta; Delta Steel Company may require 100 million dollars for its rehabilitation.

He recalled that the challenges facing Nigerian steel companies could be traced to lack of political will and mismanagement by the past administrations.

Mohammed said the Ajaokuta steel company was first concessioned under the former President Olusegun Obasanjo's regime to Messrs SOLGAS of the United States of America but could not positively turn the plant around.

He explained that another agreement was entered with an India company called Global Infrastructure Holding Limited (GIHL) to run two of the rolling mills at Ajaokuta until it was completely grounded.

He said there were allegations that GIHL removed some machinery and equipment in Ajaokuta which they bought from the government to Delta Steel Company.

“The company removed the accumulated 94,000 tonnes of scrap at Ajaokuta to Delta steel company for its use and exported the finished products to other countries.”

He said the Delta steel company, built with 1.5 billion dollars, was sold at 30 million dollars to GIHL, far less than what was spent for its completion.

Mohammed said the Delta steel was extensively run down with accumulated loans from local financial institutions and were not able to meet the repayment obligations.

He also said the Inland Rolling Mills at Jos, Oshogbo and Katsina, were liquidated to private companies, with exception of Katsina steel rolling company, but had failed to operate the plants. (NAN)

•Photo shows Ajaokuta Steel Company Complex.

Source News Express

Posted 23/10/2015 04:28:33 AM

 

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