$1bn Kogi steel project set to transform Nigeria’s steel sector

The Federal Government has lauded the $1 billion (N1.6 trillion) iron ore to steel project in Kogi State, describing it as a game-changer in Nigeria’s efforts to boost local value addition within the solid minerals sector.

Minister of Solid Minerals, Oladele Alake, highlighted the project’s importance during President Bola Tinubu’s recent visit to China. The initiative is a collaboration between Nigeria’s Chart and Capstone Integrated Limited and China’s Sinomach-He, marking a major step in the government’s push to prioritize processing minerals locally rather than exporting raw materials.

Alake explained that the government has shifted from the previous “pit to port” policy, which allowed companies to export raw minerals. The new policy now requires mining license applicants to include plans for local processing, which will create jobs, transfer skills, and improve Nigeria’s balance of trade.

“The trade balance between Nigeria and China is currently over one billion dollars in China’s favor because we export mainly raw minerals. With local value addition, Nigeria will start exporting finished or semi-finished products, leading to a more favorable trade balance and improved foreign exchange earnings,” Alake said.

He also emphasized that revenues generated from local value-added processes could help reduce Nigeria’s debt burden in the near future.

Chief Abel Edijala, CEO of Chart and Capstone Integrated Limited, praised the government’s streamlined license application process, stating that their exploration license was approved efficiently without the need for intermediaries. Edijala further stressed the need for tax waivers and holidays to ensure the project’s success during its initial stages.

Sinomach-He, which will serve as the master contractor for the project, is set to provide engineering, procurement, installation, and training services. Vice Manager Hou Encai expressed confidence in their ability to deliver, citing their experience in mining and steel manufacturing.

Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, endorsed the partnership, confirming that due diligence had been conducted to ensure Sinomach-He was a reputable partner.

The Kogi steel project is expected to play a vital role in Nigeria’s industrialization drive and improve the country’s position in the global steel market.