Minister hails $1bn Iron Ore-to-Steel project in Kogi as milestone in local value addition

By Kunle Sanni

The Minister of Solid Minerals Development, Oladele Alake, has commended the $1 billion (N1.6 trillion) iron ore-to-steel project planned for Kogi State, calling it a significant achievement in the Federal Government’s ongoing efforts to prioritize local value addition in the solid minerals sector.

The project, a joint venture between Nigeria’s Chart and Capstone Integrated Limited and China’s Sinomach-He, was a highlight during President Bola Tinubu’s recent visit to China.

Speaking in Beijing during the visit, Alake assured the investors of the Federal Government’s full commitment to expediting the project’s completion.

In a statement issued by Kehinde Bamigbetan, the Minister’s Special Adviser, Alake emphasized the government’s strategic shift from the outdated “pit to port” policy, which focused on exporting raw minerals, to a model that prioritizes local processing.

“This project represents a breakthrough in our mission to make local value addition the cornerstone of our development strategy in the solid minerals sector,” Alake stated, highlighting the transformative potential of the Kogi steel project for Nigeria’s economy.

According to the statement, this initiative aligns with the Federal Government’s broader goal of harnessing Nigeria’s mineral resources for national growth, ensuring that the benefits of mining are retained within the country rather than being lost to export markets.

“The trade balance between Nigeria and China is over one billion dollars in favor of China because the minerals imported from Nigeria are largely in raw form. Once Nigeria starts exporting finished or semi-finished value-added mineral products to China and other trading partners, our balance of trade will improve, and our foreign exchange earnings will increase. With aggressive local value addition, the prospects of reducing our debt burden in the near future are promising,” he said.

During the event, Chief Abel Edijala, CEO of Chart and Capstone Integrated Limited, presented the Memorandum of Understanding (MOU) signed by both companies to the Minister. Edijala commended the Minister for establishing an efficient, corruption-free license application process.

“We applied for an exploration license for our iron ore mining project at the Mining Cadastral Office and did not need to see anyone in person before our application was approved within a reasonable period. This shows that the system you have put in place is fair and works for all. I commend you for this,” Edijala said.

He explained that the iron ore site would supply the steel manufacturing plant, which is expected to grow and service the needs of Nigeria’s industrialization.

Edijala further noted that the project would require tax waivers for importing equipment and tax holidays during the initial phase to cope with fluctuations in the macroeconomic environment and meet set targets.

Hou Encai, Vice Manager of Sinomach-He, affirmed the company’s readiness to commence the project. He explained that Sinomach-He, a state-owned enterprise established in 1958, has over 15,000 employees, including 2,000 engineers. The company is involved in mining, iron making, steel rolling, steel manufacturing, infrastructure construction, and supplies 80 percent of China’s steel needs.

“In mining, we have the technology to excavate ores from the earth. We can evaluate the iron ore potential of any site and assess the feasibility of mineral extraction. We also have the necessary equipment, including excavators and drilling machines for mining iron ore. For transporting iron ore from the site to the factory, my group produces the trucks,” Encai said.

According to the MOU, Sinomach-He will serve as the master contractor, deploying its expertise in the engineering, procurement, installation, commissioning, and training aspects of the project.

Other attendees at the meeting included Professor He Lixiong, Executive Secretary-General of the Working Committee for Overseas Cooperation of the China Association of Small and Medium Enterprises, Mr. Innocent Okonkwo, Chairman of the Belt and Road Africa Economic Initiative, Li Ke, Sinomach-He’s Overseas General Manager, and Deng Shiyuan, Senior Project Manager.

Earlier, Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, confirmed Sinomach-He’s integrity, revealing that a team from the embassy had conducted due diligence on the company and found it suitable for the partnership.