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Ajaokuta steel gulps billions but remains comatose

Weekly Trust learnt that right from its inception ASC was enmeshed in controversy. Most Western countries, the International Monetary Fund (IMF) and the World Bank…

Weekly Trust learnt that right from its inception ASC was enmeshed in controversy. Most Western countries, the International Monetary Fund (IMF) and the World Bank doubted its viability and the practicability of building such a huge steel plant in Nigeria. But Shagari was determined to forge ahead and see the project to its completion and trigger an industrial revolution in the country.
Since its commissioning ASC has moved from one controversy to another. If it is not that most of the machines installed at the complex like the blast furnace are obsolete, then it is that the model of steel production is outdated. However, when it was commissioned more than three decades ago, the four rolling mills at the plant namely, the light section, billets, wire rod, medium section and structural mills were completed and their operations were to provide the needed funds for the completion of the remaining five percent of the blast furnace.
But Nigeria’s dream of industrial advancement has remained a pipe dream as the plant, which was built by Russians, was abandoned and most of the engineers trained to manage it dispersed.
Weekly Trust gathered that between 1985 and 1987 the plant’s four mills, which were operating optimally, packed up.
The administration of former president Olusegun Obasanjo tried to revive the plant when he concessioned it to little-known Global System Holdings Ltd (GSHL) in 2005 despite opposition from labour and other stakeholders, but in the end, the Indian firm could not revitalise ASC and were instead trading in iron ore concentrate at the detriment of the company.
The Indian firm was later found to have breached the concession deal and a face-off between GHSL and workers led to the termination of the agreement in 2008 by late president Umaru Musa Yar’Adua, who then set up an Interim Management Committee (IMC) to try are revive the moribund plant.
Weekly Trust learnt that the plant, which has gulped over $5 billion, has the capacity of producing 1.3 million metric tonnes of liquid steel annually. It is said that more than $513 million is required to complete the steel plant while an additional $600 to $700 million would be required to fix its external infrastructure.
In 2012, President Goodluck Jonathan appointed Engr. Isah Joseph Onobere, a pioneer staff of the company, as its sole administrator. But
shortly after that the controversy over whether or not the plant is obsolete resurfaced in the media, though the federal government, through the ministry of mines and steel had said there was no plan to shut down the complex, though some people are skeptical that the government may still be acting the script of the IMF and World Bank.
Meanwhile, the sole administrator told Weekly Trust that the technical audit report by the Ukrainians recently shows that the plant’s equipment and facilities were generally in a satisfactory and good condition.
“The plant is not obsolete. Nigeria is very lucky that it is a Russian plant and even in 100 years, a Russian plant can be in operation. I happened to visit one when I went to Russia and I met them celebrating 107 years of operation. Russian equipment are very robust and our own plant is over designed in both capacity and quality,” Onobere said confidently.
He added that as at today, blast furnace accounts for over 70 percent of the world steel production, stressing that last year out of the 3.2 billion metric tonnes of steel produced, 2. 1 billion tonnes were produced through blast furnace and the steel plants commissioned between 2012 and 2013 are blast furnace plants.
Onobere said the steel plant had reached 98 percent completion by 1994, adding that what is stalling it is the issue of infrastructure required for its operation.
“Without infrastructure, there is no way we can bring in the required raw materials, especially, the one that we are going to import, like the cooking coal, because we require about 1. 23 million tonnes per annum and it is required continuously for the operation of blast furnace,” he explained.
Onobere said: “Ajaokuta steel is a fully integrated plant, comprising of 43 different plant units, 41 of them are 100 percent completed. At some point we have put the ones completed into operation depending on the source of funding. The LSM and other sections were in operation briefly when it was concessioned and we produced up to 13 percent capacity utilisation for wire rod mill and light section mill but for the power plant more than 80 percent utilisation was achieved.”
He added that ASC has signed five memorandum of understanding (MOUs) with different investors in a bid to reactivate the plant by November.
“We signed with REPROM Nigeria for the operation of light session mill. Also ZSM/MZU Real for the reactivation and operation of wire rod mill, 3D Hitech System for the reactivation of the thermal plant, ITF for the operation of the Meturlogical Centre and ACACD for the operation of   MTS,” the ASC sole administrator said.
He added that for the MOU with REPROM, over 80 percent has been achieved because raw materials like billets have started arriving and that very soon the company will start producing iron rods from the LSM.
Onobere explained it was important for the public to know that the Ajaokuta plant is the best and that Nigeria cannot develop technologically without it being functional: “It is our hope that we would be able to bring all these investors together and form a consortium to complete the plant to produce liquid steel.”
He said only the first phase of Ajaokuta when completed can provide 10,000 direct jobs and 500,000 indirect ones, adding that this is a plant that could gavalnise Nigerian.
The managing director of REPROM, Engr. Attah Achimugu, said ASC was viable and that in no distant time, steel would be produced from the plant. He said with the delivery of the first batch of over 100 billets at the complex, the LSM was set to start production.
Attah, who conducted our reporter round the billet stockyard of the LSM section, said billet was a core raw material for the production of various sizes of iron rods, adding that at least 5000 metric tonnes were required start commercial production and that they will stockpile billets up to 10,000 tonnes.
“We are sourcing for the billets locally and internationally through our partnership with Greener Nations Foreign Economic Corporation,” he said
Deputy general manager, LSM, Engr. John Bello, said all the machines in the mill were in order and ready to start production, adding that REPROM would fund production in line with the MOU and that the mill has the capacity to produce 405,000 metric tonnes of assorted finished products annually.

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