The Solid Minerals Development Minister, Dr. Oladele Alake, has hailed the $1 billion (N1.6 trillion) new iron ore to steel project planned for Kogi State as a breakthrough in the Federal Government’s campaign to make local value addition the model of development in the solid minerals sector.
Addressing the promoters—Chart and Capstone Integrated Limited of Nigeria and Sinomach-He of China—on the sidelines of President Bola Ahmed Tinubu’s visit to China in Beijing recently, Alake pledged the Federal Government’s cooperation with the promoters to ensure the swift delivery of the project.
A statement by the Special Adviser to the Minister of Solid Minerals Development, Kehinde Bamigbetan, quoted the Minister as saying that the Federal Government has reversed the pit-to-port policy under which mining companies exported raw minerals for extraction. The new policy emphasizes local value addition, which guarantees job creation for youths, skills transfer, and a better balance of trade between the country and its trading partners.
He noted that to promote local value addition, he has announced that applicants for mining licenses must disclose plans for processing the raw minerals as part of the approval conditions.
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“The trade balance between Nigeria and China is over one billion dollars in favor of China because the minerals imported from Nigeria are essentially in raw form. Once Nigeria starts to export finished or semi-finished value-added mineral products to China and other trading partners, our balance of trade will improve, and our foreign exchange earnings will increase. With aggressive local value addition and the revenue it generates, the prospect of reducing our debt burden in the near future is possible,” he said.
Presenting the Memorandum of Understanding (MoU) signed by both companies to the Minister, Chief Executive Officer of Chart and Capstone Integrated Limited, Chief Abel Edijala, commended the Honourable Minister for implementing an efficient license application process that works without red tape and corruption.
“We applied for an exploration license for our iron ore mining project at the Mining Cadastral Office, and we did not need to see anyone before our application was approved within a reasonable period. This shows that the system you have put in place is fair and works for all. I must commend you for this,” Edijala said.
He explained that the model involves the iron ore site feeding the steel manufacturing plant and growing to meet the needs of the Nigerian economy for industrialization.
Edijala further stated that the project will require tax waivers for the importation of equipment and tax holidays during the take-off period to cope with fluctuations in the macroeconomic system and meet targets.
Explaining Sinomach-He’s readiness to start the project, its vice manager, Hou Encai, said the state-owned company was established in 1958 to meet the needs of the Chinese economy and has over 15,000 staff, including 2,000 engineers, on its payroll.
Encai said the company engages in mining, iron making, steel rolling, steel making, construction of infrastructure, and handles 80 percent of the steel needs of the Chinese economy.
“In mining, we have the technology to excavate ores from the earth. We can evaluate the iron ore potential of any site and assess the feasibility of mineral extraction. We also have the equipment needed, including excavators and drilling machines for mining iron ore. For transportation of iron ore from the site to the factory, my group produces the trucks,” he said.
According to the MoU, Sinomach-He will be the master contractor and deploy its expertise in engineering, procurement, installation, commissioning, and training for the project.
Other participants at the meeting included the Executive Secretary-General of the Working Committee for Overseas Cooperation of the China Association of Small and Medium Enterprises, Professor He Lixiong; Chairman of the Belt and Road Africa Economic Initiative, Mr. Innocent Okonkwo; Sinomach-He’s overseas general manager, Li Ke; and senior project manager, Deng Shiyuan.
Earlier, Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, confirmed the integrity of Sinomach-He, disclosing that a team from the embassy had conducted due diligence on the company and found it suitable for the transaction.
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