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How Nigeria’s largest industrial project failed

Steel News - Published on Fri, 29 Dec 2017

The Steel Industry is said to be the backbone of any nation. The industry serves as stimulus to national development and economic boost to industrial growth of a country. The Ajaokuta Steel Company in Kogi State of Nigeria was envisaged to serve as the bedrock of Nigeria’s industrialisation. The idea of having a steel industry was conceived in 1958 by the federal government. Preliminary market studies were carried out and studies were initially directed towards the feasibility of establishing rolling mills.

However, because of the growing awareness of the availability of iron ore in Agbaja, Udi and other areas of the country, emphasis later shifted to establishing an integrated steel plant.

Late Tafawa Balewa and late Nnamdi Azikiwe between 1960 -1966 invited and received proposals from foreign firms, including those from UK, US, Germany and Canada, most of these being on the feasibility of establishing steel complexes.

The efforts of the government did not yield significant positive result because they were based on the use of iron deposits in Agbaja and Udi which were later found to be unsuitable for direct reduction.

In 1967, a team of Soviet experts arrived in Nigeria to conduct a feasibility study on the establishment of an iron and steel plant, as a follow-up on a technical/economic cooperation agreement between the governments of Nigeria and the USSR.

In their report, they recommended the use of blast furnace process of iron making. The report also pointed out that the known iron ore deposits in the country were of poor quality and recommended that further geological surveys be conducted to see if better ore could be found.

In 1968, Soviet geological experts came to Nigeria and after a general geological investigation reported that there were high prospects for richer iron ore and coal deposits in the country.

However, the federal government signed a contract in 1970 with TYAZHPROMEXPORT a Russian company, under which they agreed to provide specialised equipment to carry out further geological survey to determine the quantity of the deposits of iron ore, coal resources in the country that could be used for the proposed iron and steel industry.
By 1973, suitable iron ore deposit was discovered in Itakpe, Ajabanoko and OShokoshoko all in the region around Kabba-Okene-Lokoja Koton Karfe axis, now in Kogi State.
The TPE was contracted to prepare the preliminary project report for the proposed Iron and Steel Industry in Nigeria.

In 1975, during the reign of Murtala Mohammed, the preliminary project report specifying the raw materials base at Itakpe in Kogi plant site location (Ajaokuta), 1st phase production volume (1.3 mmt), process route (Blast Furnace -Basic Oxygen Furnace), Product form (Long products) submitted by TPE was reviewed, discussed and accepted.
TPE was subsequently commissioned to prepare the Detailed Project Report (DPR) on Ajaokuta which was completed and submitted in 1977.

In 1979, Ajaokuta Steel Company Limited (ASCL)/NIOMCO, Delta Steel Company, among others, were established under Section 2 of National Steel Council Decree No. 60 of September 19, 1979 and incorporated as Limited Liability Companies.

In 1980, former President Shehu Shagari laid the foundation stone of an integrated steel plant in Ajaokuta on 24,000 hectares of sprawling green-field landmass, built on 800-hectares.

The steel company has four different types of rolling mills inside the plant, such as the Billet Mill which produces billets; the Light Section Mill which produces round, square, strip and angles metals.

The Wire Rod Mill produces wire rods and rebars used in construction companies and production of nails, fencing wire, rope mesh, bolts and nut and netting and the Medium Section and Structural Mill produces parallel flange channels, equal angles, unequal angles and standard channels.

The four rolling mills are bigger than Aladja, Osogbo, Katsina and Jos rolling mills put together while the coke oven and bye products plant is bigger than all the four refineries in Nigeria put together.

In 1980 to 1983, the administration achieved 84 per cent of Ajaokuta steel plant as the Light Section Mill of the plant was commissioned earlier than the scheduled date, while the Wire Rod Mill was also commissioned in April 1984, earlier than the scheduled month of December.

In 1994, equipment erection work at Ajaokuta Steel Plant reached 98 per cent completion.

With all these achievements, it was, however, sad that the gigantic steel plant idea conceived and executed by past leaders had failed to contribute to the development of Nigeria.

The Ajaokuta steel that had reached 98 per cent completion as far back as 1994 had not produced a single steel till date.

The integrated plant was envisaged to have multiplier effects on all sectors of the Nigerian economy such as the industrial, agriculture, transport and construction sectors, among others.

The steel plant was designed to produce 1.3 million tonnes of liquid steel per annum in its phase one, with a built-in capacity to expand its production to 2.6 million tonnes of flat iron and steel products in its second phase and phase three plan was planned to produce 5.2 million tonnes of various types of steel products, including heavy plates.

The steel plant complex also has highly sophisticated assemblage of 43 different plants made up of a web of complex iron, cable and machinery of different sizes and functions.

Out of the 43 plants, 40 are already completed and can produce independently.

Ajaokuta steel has the capacity to become a major producer of industrial machineries, auto-electrical spare-parts, shipbuilding, railways and carriages.

The steel plant’s first phase has the capacity to provide direct employment for 10,000 technical staff and indirect 500,000 for unskilled upstream and downstream employment if it is in operation.

Source :

Posted By : Ratan Singh on Fri, 29 Dec 2017
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