The Federal Government of Nigeria has inked a significant $1 billion iron ore steel project agreement with Chinese partners, marking a major stride in the country’s drive for local value addition in the solid minerals sector.
This development was announced in a statement by Kehinde Bamigbetan, Special Adviser to the Minister of Solid Minerals Development, Dr. Oladele Alake.
The agreement was signed during President Bola Ahmed Tinubu’s recent visit to Beijing, with Kogi State being the project’s primary beneficiary.
Dr. Alake emphasized that this partnership aligns with the Federal Government’s goal to shift away from raw mineral exports and promote local value addition, which he highlighted as key to creating jobs, fostering skill transfer, and improving Nigeria’s trade balance.
Addressing the project’s promoters—Nigeria’s Chart and Capstone Integrated Limited and China’s Sinomach-He—Alake reassured the Federal Government’s support in fast-tracking the project.
He noted that the government has reversed the previous pit-to-port policy, which allowed mining companies to export raw minerals, emphasizing that all new mining license applicants must now include local processing plans as part of their proposals.
Alake pointed out that Nigeria’s current trade balance with China is heavily skewed in China’s favor due to the export of raw minerals. By exporting finished or semi-finished products, he argued, Nigeria could achieve a more favorable trade balance and enhance foreign exchange earnings, which could help reduce the country’s debt burden.
Chief Abel Edijala, CEO of Chart and Capstone Integrated Limited, praised the streamlined and transparent license application process overseen by the Ministry. He explained that the project will include an iron ore mining site and a steel manufacturing plant aimed at meeting Nigeria’s industrial needs.
Representing Sinomach-He, Vice Manager Hou Encai highlighted the company’s extensive experience in the steel industry, noting that it supplies 80% of China’s steel requirements. Encai outlined Sinomach-He’s role as the master contractor for the project, providing engineering, procurement, installation, and training expertise.
The project is expected to stimulate industrialization in Nigeria, although Edijala mentioned that tax waivers and holidays would be needed during the initial stages to manage economic fluctuations and meet project targets.
Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, confirmed that the embassy had vetted Sinomach-He and found the company well-suited for the partnership.
