Nigerian Steel Sector Set for Boost with $1bn Iron Ore Project in Kogi State
The Nigerian government has announced a landmark $1 billion (N1.6tn) iron ore-to-steel project in Kogi State, marking a significant milestone in its push to foster local value addition in the solid minerals sector. The ambitious initiative is the result of a partnership between Nigeria’s Chart and Capstone Integrated Limited and China’s Sinomach-He, a development seen as pivotal to the country’s broader industrialisation goals.
Oladele Alake, Nigeria’s Minister of Solid Minerals, praised the project as a crucial step towards reversing the long-standing practice of exporting raw minerals, a policy shift aimed at maximising local job creation, fostering skills transfer, and improving Nigeria’s trade balance. Alake’s comments were made during a meeting in Beijing, coinciding with President Bola Tinubu’s visit to China.
In a statement released by Kehinde Bamigbetan, Special Adviser to the Minister, Alake emphasised the significance of the new policy direction. “The Federal Government has reversed the pit-to-port policy, under which mining companies exported raw minerals without any local processing. Local value addition is the best guarantee of jobs for our youths, skills transfer, and a more balanced trade relationship with our global partners,” the statement read.
The new policy requires that mining licence applicants outline plans for processing raw minerals locally, a move the minister described as essential to improving Nigeria’s economic position, particularly in trade with China. “The trade balance between Nigeria and China is currently over one billion dollars in China’s favour because the minerals imported from Nigeria are largely raw. Once we begin exporting finished or semi-finished value-added products, our trade balance will improve, and so will our foreign exchange earnings,” Alake said.
He added that the increased revenues from local value addition could play a crucial role in reducing Nigeria’s debt burden.
Chief Abel Edijala, CEO of Chart and Capstone Integrated Limited, commended the government’s streamlined mining licence application process, describing it as efficient and transparent. “We applied for an exploration licence for our iron ore project, and the approval was granted promptly without the need for special interventions. This shows the system is fair and works for everyone,” Edijala remarked.
The project aims to fully integrate iron ore mining with steel manufacturing, an initiative that Edijala believes will be instrumental in supporting Nigeria’s broader industrialisationagenda. He also called for tax waivers and holidays in the project’s early stages to help cushion the economic volatility that could affect project timelines.
Hou Encai, Vice Manager of Sinomach-He, expressed the company’s readiness to commence operations, emphasising its deep experience in both the mining and steel industries. “We have the technology and equipment needed to excavate iron ore, as well as the machinery to transport it from the site to the factory. Sinomach-He will serve as the master contractor, overseeing everything from procurement to commissioning,” Encai said.
The project’s backers include high-level representatives from China’s business and industrial sectors, with Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, endorsing the partnership. Afolabi confirmed that a thorough due diligence process conducted by the Nigerian Embassy had found Sinomach-He to be a reliable and reputable partner.
With plans in motion and key players in place, the project is expected to play a transformative role in Nigeria’s steel industry, contributing to the country’s industrial growth and economic diversification agenda.
