Nigeria: U.S.$600 Million Steel Plant Biggest Non-Oil Investment in Nigeria, AIG Boss Assures Govt
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24 DECEMBER 2019 6park.com
This Day (Lagos)
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The Managing Director of African Industries Group Company, Mr. Alok Gupta, yesterday said the company's $600million Integrated Steel Plant would be Nigeria's biggest non-oil Foreign Direct Investment (FDI).
He said the new plant would boost the nation's economy and lead to the mining of 5.4 million tonnes of Iron Ore in the country.
He also said about 36 megawatts power plant will be constructed from the waste heat recovered from the plant, which will be partly used for captive consumption.
Gupta made the disclosures when the Minister of Mines and Steel Development, Mr. Olamilekan Adegbite visited the project site in Kagarko in Kaduna State. 6park.com
He said the firm would inaugurate Phase 1 of the plant by December 2020.
He said: "We expect to commission the Phase I of the project by end December 2020. We will be mining 5.4 million tons of Iron Ore, beneficiate the ore to produce high grade concentrate followed by making into pellets and then finally into Directly Reduced Iron (DRI).
"The DRI will be used to make steel billets and will avoid our need to import the same. We are also building a 36 MW Power Plant from the waste heat recovered in the process, which will be partly used for captive consumption.
"Let me also highlight the key benefits of the project at this stage: About $600 million investment will be Nigeria's biggest non-oil FDI, will serve as a catalyst for development of solid minerals sector by attracting other serious investors following our example in downstream processing. 6park.com
"The project will eliminate the need to import steel billets thereby saving scarce foreign exchange.
"Currently 100 per cent of steel production in Nigeria is from scrap route, which is a diminishing resource. Producing steel from locally available iron ore will lead to sustainable economic development, considering the abundance of iron ore reserves in the country.
The project will also contribute significantly to the Nigerian GDP by way of royalties and direct and indirect taxes.
Gupta also highlighted other benefits of the project, including a power plant.
He added: "With the completion of first phase of project, there will be significant economic and industrial development in the area by means of creation of several allied industries and social infrastructure.
"The surplus power generated will further assist in developing other industries and residences and will help in urbanisation of the local area. 6park.com
"Our project is not only important for Nigeria or for Nigeria in the African context but for Nigeria in the World context. It complements Nigeria's desire to be self-sustaining and become an independent steel producer not dependent on imports.
"This Integrated Steel Plant will surely put Nigeria on the world map of crude steel producers of the world.
"This is just the start of our long journey and I would like to thank all the people who trusted in us and supported us so far and we hope that you will keep supporting us in setting up of this Integrated Steel Plant."
He said the firm has enough experience to execute the project to its logical conclusion. 6park.com
He said: "We, the African Industries Group are a diversified Manufacturing Group involved in the manufacturing of various products including Steel.
"We started our operations in Nigeria in 1971 employing over 8,000 people in our 18 manufacturing plants. We are the largest producer of steel in Nigeria having the lion share of the market with an annual production capacity of over 1.2million tonnes of finished Steel Products.
"Now, let me focus your attention to African Natural Resources and Mines Limited (ANRML). Over the last six years, we have completed several milestones including an Internationally Accepted Resource Estimate, feasibility studies from various consultants in the world including Canada, UK, South Africa, India and China.
"We have also completed Environmental and Social Impact Assessment based on both the Nigerian and IFC performance standards. We are mindful of the host community, who stand to benefit substantially from our investment in the development of this region and we have been continuously engaging with them."
In his address, the Minister of Mines and Steel Development, Olamilekan Adegbite said the federal government will support the investors behind the $600 million integrated steel plant.
He also said the government will henceforth ask investors in the mining sector to develop site communities in order to avoid a repeat of the crisis in the Niger Delta
He said: "It is part of our mandate to encourage investment in mining and steel development which this group has started. My visit here is to encourage this investment and also to urge them to do this as quickly as possible to bring the obvious benefits, first to the community where it belongs.
"This government is particularly interested in not making the mistakes we made in the Niger Delta when the oil investment started, the communities were not taken along.
"One of the most important factors for the government in developing the sector is that the community must be involved right from the beginning.
"The community in a graduated way must benefit. As the company and investment grow, the community should derive graduated benefits. While we are there to moderate the expectations of the community, at the same time, we also encourage the investor to take them along in terms of employment, infrastructure including social infrastructure.
"The Managing Director of has spoken about power generation, this is one of the things we encourage because mining in itself consumes a lot of power.
"Therefore, the power that will be generated here should be extended to the community, if not totally free but at a very subsidised rate. I know that this company has the reputation of doing what is right and the government will be there to support them.