By Mary Izuaka

 

The Federal Ministry of Steel Development has signed a sub-lease and operations agreement to revive the Delta Steel Company, now Premium Steel and Mines Limited (PSML), in Ovwian-Aladja, Delta State.

The agreement, executed on Thursday between the National Iron Ore Mining Company (NIOMCO), Itakpe and PSML, is expected to unlock over $1.3 billion in investment and restore commercial production at the plant within 18 to 24 months.

Salamatu Jibaniya, head, press and public relations in the ministry, disclosed this in a statement on Thursday.

According to the statement, the agreement provides an important framework for renewed collaboration between the federal government and the company towards the rehabilitation, reactivation and sustainable operation of the steel plant.

It said the initiative is expected to support the restoration of critical production facilities, strengthen the domestic steel value chain and reduce Nigeria’s dependence on imported steel products.

The steel plant

Commissioned in 1982, the Delta Steel Plant was built as an integrated green steel plant with an installed capacity of one million tonnes of liquid steel per annum.

The plant, however, operated at only about 25 per cent of its designed capacity before it was shut down due to prolonged operational challenges.

In an effort to attract private capital for the revival of the plant, the federal government privatised the company to Global Infrastructure Holdings Limited in 2005.

However, the Asset Management Corporation of Nigeria (AMCON) subsequently re-sold the company to Premium Steel and Mines Limited in 2015 to recover unserviceable debts. The plant has not been operated as an integrated Steel Plant since then.

$1.3 billion injection, iron ore supply secured

Under the new agreement, according to the statement, PSML committed to inject over $1.3 billion into the project for raw material exploration and exploitation, rehabilitation and modernisation for sustainable operation to achieve full capacity production of 1 Million Metric Tonnes of liquid Steel per annum.

The company said it will achieve full reactivation and commence commercial operations within 18 to 24 months, subject to availability of sustainable iron ore supply, which the government says has now been provided.

Speaking on the development, the Minister of Steel Development, Shuaibu Audu, said the initiative aligns with President Bola Tinubu’s Renewed Hope Agenda to strengthen local manufacturing and unlock the productive capacity of Nigeria’s industrial sector.

“The revival of Delta Steel Company is not merely about bringing an old industrial facility back to life. It is about restoring Nigeria’s capacity to produce steel locally, creating opportunities for our young people, supporting downstream industries and strengthening the foundation for sustainable industrialisation,” the minister said.

Targets

The ministry said the project is expected to reactivate NIOMCO and support the development of the Ajabanoko iron ore deposits, facilitate the rehabilitation and commercial operation of PSML and attract over US$1.3 billion in investment.

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It said the project is expected to create about 5,000 direct and over 20,000 indirect jobs, support Nigeria’s target of 10 million tonnes of liquid steel production annually by 2030 and strengthen rail and maritime logistics through increased freight movement along the Central Rail Line and utilisation of the DSC Jetty.

The ministry noted that the successful operation of the steel company will require reliable access to Iron Ore and other critical raw materials, particularly from the NIOMCO, Itakpe, as well as dependable power, logistics and supporting infrastructure

The federal government stressed that the agreement must translate into actual mine development, plant rehabilitation, commercial steel production and sustainable jobs within the agreed implementation period.

“The federal government remains committed to transforming Nigeria into a competitive steel-producing nation capable of meeting a substantial proportion of domestic demand and positioning the country as a major player in the African steel and metals value chain,” the statement said.