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Nigeria’s minister of solid minerals development Kayode Fayemi will be leaving office any moment from now to pursue his governorship ambition in Ekiti State, but he is leaving behind a trail of moribund Ajaokuta Steel Complex, troubled Aluminium Smelter Company of Nigeria (ALSCON) and coal mines that are lying idle.
Fayemi had, in March this year, restated the federal government’s intention the Ajaokuta Steel Complex, saying the country would no longer waste public funds on the complex.
‘’Some people will say Ajaokuta is 98 per cent completed, or that it is 90 per cent completed, but if you probe further, you will discover that you would not get any response from the campaigners,’’ he said at an interactive session with newsmen in Abuja on March 8.
At an earlier 2nd Nigeria Mining Week held in October 2017 in Abuja, he had disclosed government’s resolution of the conflict relating to the ownership of Ajaokuta Complex with Global Steel Holdings Limited.
However, the minister will likely leave office this May without a concession agreement for the steel complex considered as vital for Nigeria’s industrial development.
According to the Manufacturers Association of Nigeria (MAN), the current state of Ajaokuta in Kogi State remains one key reason why many inputs and machinery are imported as, naturally, the complex could have provided a huge percent of manufacturing raw materials.
BusinessDay checks show that Ajaokuta Complex has the capacity to produce one million metric tonnes of steel, one million metric tonnes of coal , manganese and limestone, among others.
In a move that shocked economists and finance experts, the federal government budgeted N3.9 billion in 2016 and N4.27 billion in 2017 for the resuscitation of the moribund Ajaokuta Steel Company, despite an earlier business case in the last administration showing that the complex could only work if properly privatised.
Next on the list is the state of coal mines in Enugu.
During a tour of African Foundries steel factory in Lagos in 2016, the company had appealed to the minister to allow it have access to iron ore and coal mines in the country, in line with its Backward Integration Programme. The company was particularly interested in the coal mines in Enugu from where it could access inputs and power directly.
The company said the mines would solidly support beneficiation, pelletising and Direct-reduced iron (DRI) processes and power efficiency in the firm.
“We have a lot of projects that will employ thousands of people and bring billions of Naira investment into the country, but they cannot take off until there is an allocation of these mining sites,” Parduman Kurmar Gupta, the then chairman of the company, told Kayode Fayemi.
However, stakeholders as the minister plans his exit say coal mines are still lying idle in Enugu, constituting a major waste to the economy.
The Aluminium Smelter Company, located in Akwa Ibom State, is also not in operation due to the tussle between Bancorp Financial Investment Group Divino Corporation (BFIG), a consortium of U.S.-based Nigerian investors led by Reuben Jaja, and the United Company RUSAL, a Russian firm.
Fayemi had earlier stated that the government was resolving this crisis, but as he plans his departure, the plant is still under lock and key.
“We need that resolved. Aluminium Smelter Company needs to be re-started so that we can get ingots for local roofing sheets manufacturers,” Oluyinka Kufile, chairman, Basic Metal, Iron and Steel Group of the Manufacturers Association of Nigeria (MAN), told BusinessDay earlier in an interview.
The Federal Government launched a N30 billion mining fund in May 2017 and another N5 billion in August managed by the Bank of Industry (BoI) for artisanal and small –scale miners, but players have not been able to access the funds due to the stringent conditions attached to them, which involve presenting landed property and other liquidity assurances, players say.
“We are not accessing it. Not one of us has accessed the fund,” Shehu Sani, president of Miners Association of Nigeria, told BusinessDay on the phone.
“If you watch what is happening from outside as a foreigner, you won’t put your money in the mining sector in Nigeria. Local investors are ignored and there are lots of square pegs in round holes directing the policy framework,” Tony Nwakalor, CEO of Sound Core, a player in the mining sector, said.
ODINAKA ANUDU
