The Nigerian government unveiled a revitalization strategy for the country’s steel industry on Tuesday.
This information was made public on Tuesday by Alaba Balogun, who serves as the Head of Press and Public Relations for the Ministry of Mines and Steel Development.
According to Mr Balogun, the federal government, working via the recently established Ministry of Steel Development, has made important efforts towards revitalising the nation’s steel sector by declaring full insurance coverage for all existing steel projects inside the country. Mr. Balogun stated this announcement was made by the Ministry of Steel Development.
According to the statement, the Minister of Steel Development, Shuaibu Audu, made the declaration during an important meeting with key agencies under the ministry. These key agencies include the Ajaokuta Steel Company Limited, the National Iron-Ore Mining Company, the National Steel Raw Materials Exploration Agency, the Metallurgical Training Institute, and the National Metallurgical Development Centre, Jos.
The statement said that during the interface with the heads of the agencies, Mr Audu explained that the deliberate policy of the present administration to introduce insurance coverage for steel projects is a critical step to mitigate the risks and uncertainties that are inherent in large-scale developmental endeavours.
Mr. Audu explained this during the meeting with the heads of the agencies. The minister stated that the government’s goal in offering this insurance coverage is to cultivate an atmosphere that is conducive to drawing investments into the steel sector, securing finance, and speeding the successful completion of different programmes around the country that are connected to steel.
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Strategy to revive Nigeria’s steel sector
He noted that the ministry would outline a comprehensive two-year activation plan to ensure a structured and successful implementation of this policy. He also noted that the strategic plan is designed to catalyse the revival of all steel-associated interventions, which underscored a steadfast commitment to achieving tangible progress within a stipulated time frame.
“The process towards revitalising the steel sector extends beyond the covering provided by insurance. To address the myriad of problems that are stymieing the expansion of the industry, the government has developed an all-encompassing plan for reorganising the sector.”
According to Mr. Balogun’s account, the minister was cited as adding that the optimisation of skilled manpower and the enhancement of security measures will be central to this approach in order to create a safe and productive working culture.
The minister provided a list of further proposals for potential solutions, some of which included the restoration of the rail infrastructure that links the Itakpe and Ajaokuta Steel Complexes, the establishment of a functional rail network for the shipment of raw materials and completed goods, and so on.
According to Mr. Audu, this has the potential to considerably increase the operating efficiency of these complexes, which would have a good impact on the entire street value chain.
Nigeria’s steel sector
The Nigerian government and the Soviet organisation Technopromexport signed a contract in 1979 to build a steel mill in Ajaokuta.
The first phase of the Aladja Steel complex, which was constructed at a cost of 922 million Nigerian naira, was commissioned in 1982, bringing the steel-making infrastructure to an advanced level. The factory’s method utilised electric arc furnace technology for producing steel. It was anticipated that the mill would generate more completed billets than wire or iron rods.
The remaining billets were sent to three rolling mills in Jos, Osogbo, and Katsina, which then produced rods between 6mm and 40mm in diameter. The rolling mills’ production capacity was divided into three phases, with the first phase producing an estimated 80 tonnes of finished goods per hour and 210,000 tonnes per year, the second phase 420,000 tonnes per year, and the third phase 720,000 tonnes per year.
Over the years, Nigeria’s focus on the steel sector began to drop, with the country focusing on other sectors like petroleum.
As of now, the Nigerian steel industry is a significant contributor to the country’s economy, accounting for approximately 20% of the nation’s total manufacturing output. The sector also plays a significant role in the development of the nation’s infrastructure, providing steel for bridges, structures, and other significant construction projects. Nigeria is the fifth-largest primary steel producer in the world and has the potential to become one of the world’s top 10 steel producers.
The country’s iron ore reserves are of the highest quality and are easily accessible, making them a crucial factor in its ability to become a global steel producer. In recent years, the steel industry in Nigeria has experienced significant growth due to new investments, new infrastructure and initiatives, and rising domestic demand. The country has substantially decreased its production costs and increased its exports, thereby becoming a formidable competitor in the global steel industry.
