The federal government has expressed hope that its cooperation with Russian government would facilitate it getting the $1.45 billion required to resuscitate the Ajaokuta Steel Plant.
Minister of Mines and Steel Development Arc. Olamilekan Adegbite stated this at an interactive session with newsmen in Abuja, on federal government’s post Covid-19 plans for the solid mineral sector.
He explained that the Russian government are providing $450 million for the project, while the AFREXIM bank will be providing $1billion, “so we have a total of $1.45 billion but the whole essence is that the Russian technical experts will come, do the audit which will lead to them giving us an exact figure of how much it will cost to resuscitate Ajoakuta and National Iron Ore Mining Company (NIOMCO).”
The minister added that the Russians will bring experts to fix the plant and “we are working on what we call local context, right now we proposed 60% local content— everything that is required in Ajaokuta and NIOMCO that is obtainable in Nigeria must be sourced from Nigeria, we don’t want everyone to come here and dump everything on us, only those things that we cannot provide can be brought from outside so right now we are at that stage of 60% local content and 40% foreign.
He explained that the experts will come to audit and manage the plant “so that the plant pays back the loan without recourse to the country.”
Adegbite noted that with this arrangement, the Nigerian government will not spend any money on Ajaokuta again according to President Muhammadu Buhari who had earlier met with President Vladimir Putin, at a bilateral meeting and agreed on a government to government cooperation to resuscitate Ajaokuta.
“Because the Russians built Ajaokuta when they where the Soviet Union in collaboration with the Ukrainians and that is why we have gone back to them, the whole essence is for them to come here, access the plant and access the job to be done that is what we call a technical audit, the Russian government have nominated a contractor who will do the job.
He said, “so Ajaokuta is making a business case which has been accepted and ones it is resuscitated and producing it can pay back its loan, so the whole essence is that they (the Russians) will build and operate it for awhile upon agreed terms and at the end of the term when the loan is paid with interest, the plant will be reverted back to Nigeria and at that time a decision will be taken on who will manage it.
