Olufemi Adeyemi
The Nigerian Federal Government has entered into a Memorandum of Understanding (MoU) with a Russian consortium, led by Tyazhpromexport (TPE), the original developers of the Ajaokuta Steel Plant.
This agreement aims to rehabilitate, complete, and manage both the Ajaokuta Steel Plant and the National Iron Ore Mining Company (NIOMCO) located in Kogi State.
The MoU was signed by Prince Shuaibu Abubakar Audu, the Minister of Steel Development, during his visit to Moscow, where he headed a Nigerian delegation.
A statement from Salamatu Jibaniya, Head of the Press & Public Relations Department at the Ministry of Steel Development, indicated that the Minister's working visit took place from September 14 to 21, 2024, during which the MoU was formalized with the Russian consortium, which includes Novostal M and Proforce Manufacturing Limited.
The agreement followed a visit by the TPE-led consortium to the Ajaokuta Steel Plant and the Itakpe Iron Ore Mining site in August 2024 for initial assessments, which led to the invitation to sign the MoU.
The statement reads in part, “The Federal Government of Nigeria through the Honourable Minister of Steel Development, Prince Shuaibu Abubakar Audu who led a Nigerian delegation to Moscow, Russia from 14th – 21st September, 2024, on a working visit, has signed a Memorandum of Understanding (MoU) with the original builders of Ajaokuta Steel Plant Messrs, Tyazhpromexport (TPE) and members of their consortium namely; Novostal M and Proforce Manufacturing Limited for the Rehabilitation, Completion and Operation of Ajaokuta Steel Plant (ASP) and National Iron Ore Mining Company (NIOMCO) in Kogi State, Nigeria.
“The call was accepted by the Russian Federation when a consortium led by Messrs, TPE visited the Steel Plant in Ajaokuta and the Iron Ore Mining site at Itakpe in August, 2024 for preliminary inspections leading to the invitation for the signing of the Memorandum of Understanding.
“Prince Shuaibu who is driving Mr. President’s mandate for the revitalization, completion and operation of Ajaokuta Steel Plant (ASP) and National Iron Ore Mining Company (NIOMCO) said this is a bold step towards creating a sustainable base for the industrialization of the Nigeria economy, noting that The revival of the Steel sector will also reduce importation of Steel products into Nigeria which is estimated at over $4billion annually and will help save scarce foreign exchange.
“During the visit, the Nigerian delegation met with the Deputy Minister of Industry and Trade of the Russian Federation, Mr. Alexey V. Gruzdev and the consortium led by TPE assured the Nigerian Delegation of the readiness of the Consortium to meet the expectations of the MoU with the Nigerian Government.”
The Nigerian delegation, headed by the Minister of Steel, conducted an inspection of the facilities operated by Messrs.
Novostal M in Balakovo, located in the Saratov region. During their visit, the plant was fully operational and boasts an Electric Arc Furnace with a production capacity of 1.2 million metric tonnes of steel products annually, supported by a workforce of 3,900 employees.
The team also evaluated the company's private port facility, which is utilized for receiving various raw materials essential for their operations.
Dr. Chris Osa Isokpunwu, the Permanent Secretary of the Ministry of Steel Development, emphasized the Nigerian Government's dedication to revitalizing the Ajaokuta Steel Project and the National Iron Ore Mining Company in Itakpe.
Demchenko Ivan Ivanovich, President of Metallurgical Holding “Novostal – M,” assured the delegation of their willingness to provide a comprehensive proposal for the project following a thorough audit of the plant. Additionally, Mr. Egorov Sergei Anatolevich, General Director of Messrs.
TPE, and Mr. Adetokunbo Ogundeyin, Group Managing Director of Proforce Manufacturing Limited, expressed their commitment to the initiative, highlighting its significance for Nigeria's economic development and urging the Nigerian Government to create a supportive environment.
The parties conveyed their optimism that the successful execution of the Memorandum of Understanding (MoU) would lead to the revival of both Ajaokuta Steel Company Limited (ASCL) and NIOMCO, potentially generating over 500,000 direct and indirect jobs for Nigerians and significantly boosting the economy by billions of dollars, thereby supporting President Tinubu’s goal of achieving a $1 trillion economy by 2030.