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Kogi Iron become Nigeria’s first domestically sourced steel company

Steel News - Published on Mon, 10 Sep 2018

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The Nigerians pay around USD 650 per tonne for delivered steel scrap. The Nigerians have no primary steel production of their own, and can only serve around a third of the estimated USD 6.8 billion of domestic demand from in-country recycling. The rest of the supply is made up by Chinese imports of scrap steel, with the corresponding drawback that end users tie up their working capital for around three months.

But it won’t be long before there is an alternative, one that could turn the Nigerian steel market on its head, or at the very least give it a radical shake up.

That at least is the aspiration of Kogi Iron, and its new chief executive Martin Wood.

Kogi plans to build an integrated cast steel plant in the neighbourhood of its Agbaja iron ore deposit in south central Nigeria, owned directly through the company’s subsidiary KCM Nigeria.

It will be the first of its kind in Nigeria, and as such is likely to attract a lot of support both from those who want the immediate benefits of employment and regional economic stimulus and from those who see the strategic and international economic benefits.

It’s a compelling vision, given that for some years Agbaja was regarded merely as just one more iron ore asset stranded a little too far away from the coast.

Now, all thoughts of stranded assets are banished, as too are thoughts that Kogi itself is still leveraged to the iron ore price.

Instead, it’s all about steel and cutting a nice slice of that US$6.8bn demand for the company.

In some respects, it’s early days precise details of potential capital and operating costs will have to wait for the results of a definitive feasibility study, which is underway.

Nevertheless, recent testwork undertaken by mining and metallurgical consultant Tenova has confirmed that the Agbaja ore is amenable to the production of a beneficiated iron ore concentrate suitable for the production of pig iron, as well as a refined metal suitable for the production of billet.

It’s enough to set Kogi firmly on the road to becoming a steel producer.

Mr Martin Wood said that “This is the key proof of the whole project. It indicates that the iron ore that we own can be economically turned into a cast steel product that can be sold for more than it costs to make. Our internal numbers show this is a very valuable project.”

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Posted By : Ratan Singh on Mon, 10 Sep 2018
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