11 investors indicate interest in Ajaokuta
ABUJA—Eleven private investors have expressed interests in the concessioning of Ajaokuta Steel Company.
The Minister of Mines and Steel Development, Abubakar Bawa Bwari, disclosed this at a briefing in Abuja yesterday.
Legal issues resolved
According to him, the legal issue around the company has been resolved, with it reverting fully to the federal government.
Although Bwari did not disclose when the privatisation process would commence, he indicated that it would be concessioned to a firm that had the financial muzzle, technical know-how and genuinely committed to the nation’s steel sector development.
Responding to a question on the current status of the steel plant, the minister said: “Global Infrastructure does not have a stake in Ajaokuta asset. We have signed an out- of -court settlement, signed and modified concession agreement.
“On investors interested in Ajaokuta, so far we have 11 companies that want to take over Ajaokuta. The government policy is that government is not going into business. For example is things that have happened in railways, airway, even the National Nigerian Petroleum Corporation, NNPC, having challenges and others.
“What this government intends to achieve is to make the private sector be the major driver of the mining sector. All we do is to regulate and to serve as the enabler, we will create the enabling environment for mining activities. We want the private sector to drive it.
“So if everything is done we want to give Ajaokuta to the company that has the funds, technical-know-how and have the commitment to our sector. The steel sector has some international politics in it. It is not just any company you give your steel sector.”
The minister disclosed that the Ajaokuta Steel Plant was about 98 per cent complete but that the remaining percent consisted of infrastructure and that unless developed, the plant would not be able to operate, even if it was 100 percent completed.
“Ajaokuta is 95 per cent to 98 per cent completed. In Ajaokuta everything is in place. We have our workers there that have been maintaining the place. But the problem was legal issue but that is resolved. Even we have resolved the legal issues and the two per cent has to do with external infrastructure.
“Ajaokuta is such a huge project that requires railways, river ports and so on. Government is putting all those things in place now. Even at 100 per cent completion it won’t have been able to operate, without the infrastructure.
“Let me give you an example if all the raw materials required from Itakpe to Ajaokuta of high concentrate required to produce steel, taking 750 trucks everyday to Ajaokuta and imagine 750 trucks from Itakpe to Ajaokuta.
“A lot of the investors have expressed interest in taking over Ajaokuta including investors to build these infrastructures. So bear with us Ajaokuta will work,’’ he said.
Although the minister said that the legal tussle over Ajaokuta Steel Company had been resolved, the Iron Ore Company Itakpe, which was built to supply raw materials to the steel plant was left in the hands of Global Infrastructure.
Bwari said the arrangement for Global Infrastructure to hold Itakpe Iron Ore Company for seven years was part of the out-of-court settlement with the Indian company which transaction on Ajaokuta was terminated by the federal government over allegations of assets stripping.
Noting that he does not know what would happen to Itakpe after the seven-year period, the minister said:
“The area they have stake in is the National Iron Ore Mining Company Limited, NIOMCO, Itakpe, and they have a concession for seven years to run and after that I don’t know what will happen. They don’t have any stake in Ajaokuta
“Under the out-of-court settlement for concession Ajaokuta should have first right to all the raw materials coming from Itakpe.” States won’t come to Abuja for anything if they take solid minerals seriously. The minister said that the federal government had signed a Memorandum of Understanding with state governments, adding that any state government that took investment in solid minerals seriously would not need to come to Abuja for money. “Under the Memorandum of Understanding between the states and federal government, they can set up Special Purpose Vehicles, SPVs, so that they can go into business in terms of partnership with some big mining companies, especially on areas they have comparative advantage.
“I know, of course, some states are doing that. Those areas as phosphate for fertilizer, carbonate for water treatment states can go into. I want to tell you and I am not boasting that if states had shown more seriousness in the solid minerals sector, they don’t need to come to Abuja.”
Bwari said that the sector ‘s contribution to the Gross Domestic Product, GDP, had risen from 0.03 percent in 2015 to to 0.6 percent 2016.
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