Why Ajaokuta Steel company is not yet fixed -- Minister - NEWS FRONTIER DAILY


Tuesday, November 8, 2022

Why Ajaokuta Steel company is not yet fixed -- Minister

Minister of Mines and Steel Development, Olamilekan Adegbite, Tuesday, said that the eruption of COVID-19 in 2020 was essentially responsible for the non resuscitation of Ajaokuta Steel company in Kogi State.

The minister said that he had after participating in a Summit in Russia in 2019 announced that within 2 years, precisely in the first quarter of 2022, the company would come back on stream.

But according to him, the pandemic struck and stopped the Russians technical experts from coming.

Adegbite who was responding to a barrage of questions posed to him by lawmakers during 2023 budget defence of his ministry with the House of Representatives Committee on Steel Development also said that about $2 billion was estimated for the fixing of the company.

A member of the Committee, Hon. Victor Mela Danzaria had lashed out at the minister, accusing him of not doing enough to get the steel sector working. 

The lawmaker had suggested to the committee to withhold approvals for any capital projects of the ministry and focus on resuscitating the company to put Nigeria back on a right pedestal in the steel sector.

Danzaria said: "We have a ministry that the plan is to be a generating ministry that will take over very much other generating ministry in this country. Unfortunately, we are still not there. I am speaking from my heart. It doesn't matter what's been happening. We have not taken this ministry where it's supposed to be. Honourable minister, you are not doing enough. Foreigners are taking away billions of naira. You are not capturing that. We know the mining activity whether illegal is going on. Solid mineral is a ministry especially the solid sector of it. When this thing, I believe we will get where we will compete with oil. Unfortunately, as far as Ajaokuta is concerned, I will be tempted to say that any capital project there should not be approved. Only personnel should be given money.

"We have had meetings with the minister. He has accused us sometime of not increasing his monetary allocation in the past. May be, we were not able to do but I still feel there is more to do in the industry than what is happening right now. There was a time we had a meeting with the Senate on the same issue. The approved was given by Mr. President. We asked the Minister to come and say why there were not releasing money for Ajaokuta. That meeting could not continue. Some of us have travelled wide. We know what the mineral sector is doing around the world. Unfortunately, it's not happening in our country. Distinguished, Honourable colleagues, if it means not approving capital projects for Ajaokuta and other sectors of the ministry to bring the revival of Ajaokuta, let's go ahead and do it. I think we should pay the workers and not approve other areas if there. We can't continue like that. Some things have to happen. The President and the Executive understand what Ajaokuta will do to Nigeria. So, we were not happy that we are here talking about the same thing. We shouldn't be wasting money in those areas that are not working."

Responding, Adegbite said: "Minister's response "The IPPIS people have a helicopter view of what is happening. Personnel are moved away. People are retiring. I am sure that is what is reflected in that reduction. That money is never fully expended anyway. We all get out salaries from the IPPIS including myself. So, of there is any shortage anywhere, I am sure IPPIS people know how to augment it.

On Ajaokuta Company 

"Essentially, what you have seen in the budget on Ajaokuta every year is just personnel cost and maintenance. If they have anything capital, I am sure it's very insignificant which can be taken away. When I came to office in 2019, I thought why should anybody be budgeting so much for Ajaokuta when it's not producing. But I went to see Ajaokuta first notime myself and I quite understood whey the personnel were being paid. If anybody has ever visited Ajaokuta, you know how vast Ajaokuta is. It's a city on its own. If we don't have personnel there who are keeping vigil and maintening the place; they will do a dummy run for you, for something of that magnitude, it would have gone stiff. You won't be able to run it again. But to do a regular maintenance. Yes, they don't have the materials to produce the liquid steel. If we have this material, this is how this will run and every part moves. So, that is the essence of paying this much. But we are hoping that we will come to a conclusion by the end of this year and know how to deal with this issue in the budget.

The concessioning 

"The concession is on course. In 2019, we came back from Russia and I went to address Nigerian that we will finish Ajaokuta before the end of first quarter of 2022. That in October 2019, Russian/African Summit. We got the cooperation of the Russians. The President agreed to help us put Ajaokuta back on track. I cam back home and address the press that yes, we have a timeline and Ajaokuta will be fixed in 2 years, that is by 2022, first quarter, Ajaokuta will start running.  But then,  COVID-19 in 2022, all the arrangements that we had couldn't hold because the Russians were supposed to come in March 2020 to start the technical audit. But they couldn't come and then, 2021 left as well. In that interregnum, we thought that look, let's try to do something different. As at today, there is a transaction in place. We have 9 people that are interested in running Ajaokuta. We brought different proposals and we said will not do any cheap concession like we have done in the past. We have learnt out lessions. Whosoever that is coming to Ajaokuta must bring some equity into it. 

Future plan 

"So, what we hope to do before we leave office is to set Ajaokuta on a solid foundation, on a trajectory that in another year or two, it will start running. But it has to be from a private sector. Government will not have the time and the fund to run that business. So, the transaction adviser is working with the ICRC infrastructure committee. And whenever that process is completed, we will take it to the Federal Executive Council (FEC) and then we will decide who gets to run Ajaokuta and which equity. The details will be in the public domain. We hope that the concessioning will be completed. There is why there is no proposal in this 2023 budget when it comes to concessioning.

$2 billion estimated to fix Ajaokuta 

"The estimate to fix Ajaokuta ranges between $1.5 to $2 billion. The whole budget for the whole ministry for the next year is not up to that. How much is a billion dollar in Naira? That's trillion. What do we get every year? Pittance. N10 billion. So, if you step all the capital projects in the ministry and put them aside for the next 20 years, it will not fix Ajaokuta. We are going to rely on Afrixim bank. We have gone beyond that now. There are people who are willing to bring their own funds as equity partners to fix Ajaokuta and we should look forward rather than backwards when it comes to Ajaokuta. We have learnt a lot os lessions on Ajaokuta".

On illegal mining/miners 

Adegbite who also responded to the question of the efforts of the ministry to curb illegal mining across the country said that he was handicapped over it.

Regretting that a proposed mining police mulled in 2017 by his predecessor was yet to take off due to lack of funding, the minister said that it was within the purview of the National Security Adviser (NSA) to give necessary directive.

He however said there was a success story on artisanal mining in Nigeria as over 2000 cooperatives have registered with them.

He said: "If you look in our budget, there is no single appropriation for security. That's why we will go back to the national security adviser. Yes, my predecessor with the President set up what you called the mining police in 2017. Essentially, the minister sits as the chairman of that mining police and it had the chief of army staff, the IGP, the commandant General of the Civil Defence people, the NSA, the Director, DSS. But that committee has not been funded since. That committee proposed to have personnel on the ground. So, we are not reacting to situation. We prevent situation. If we have all those, we can prevent occurrences of illegal mining. But that committee is not funded. It's just there. If you put soldiers on the ground, they must have ration. They collect a daily ration. There is not funding for that. So, the mining police had not worked else we go back to the NSA who is in charge. And I must note that it on the advise of NSA to Mr. President that there is a ban on illegal mining in Zamfara. So, he aware of illegal mining and the attendant consequences and he's working on a robust proposal. If it's working, I think, we cannot have some relief. It is outside our purview.

On Artisanal miners 

"We have a success story on artisan miners. In the ministry, there is a remote sensing which is part of the world bank project, they have a satellite remote sensor which identifies areas where artisanal mining is taking place. As of today, we have over 2000 artisanal mining cooperatives which the ministry has registered. So, there is a success. It's a continuous process. Some of them have agreed to come to formal side. Some have even gone to small skill mining licenses. There are so many of them. They are all over the country. They are all known to us. We have their biometrics and all of that.

"Yes, they are illegal miners, taking things out every year. I have told you out own challenges and why we cannot deal with them. But these things are taken out in containers. We don't control the ports and that's why we say we continually interact with the Customs to stop this activity. Even gold are carried through our borders. How can you carry gold and out metal decorators do not sound. If you are doing it legally, we upload directly. We don't sent papers. If you come to the ministry, you want to export any mineral, you pay your royalty. We give you export permit. We upload that permit to the Customs portal. The Customs supposed to check and stop them", he said.

While affirming he was aware of the Diva project which was a world bank assisted project, Adegbite bemoaned the ministry's 2023 budget, saying it was poor.

"The total budget for 2023 for the ministry and its ten agencies is N3.2 billion as against 14 billion in 2022. The outlook is not very good but it is what it is. We need more funding.

"We hope there will be more funding and timely releases to execute our programs and projects. This sector will contribute more to the economic growth of the nation in 2023. We have had trajectory of growth since 2019. This year, we’ve done N7.2 billion in revenue and we hope to get N10 billion before the year runs out", he said.

Source: Vanguard

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