• Chinese investor plans $2 billion Ajaokuta steel revival

• Engineers say rolling mill could restart within six months

• Nigeria produces 1.2 million tons; demand near 10 million

A Chinese investor is planning to relaunch the Ajaokuta Steel Company, a Nigerian state-owned metallurgical complex hampered by more than four decades of mismanagement and legal disputes over mining concessions. Joseph Tegbe, head of international relations for the Nigeria-China Strategic Partnership, said the federal government is in advanced talks over a $2 billion investment, according to local media.

While the identity of the investor has not been disclosed, the company was selected after meetings with about ten firms, the local daily BusinessDay reported. Tegbe also said the Chinese firm deployed 20 engineers to Nigeria at its own expense. The team carried out a two-week assessment of the plant and concluded that although most of the equipment was obsolete, the core infrastructure remains viable. They said a steel rolling mill could begin operations within six months of the project’s launch.

Immediate plan

The initial phase involves restarting the existing rolling mill, which has a capacity of 1.3 million tons. Output would then be increased to 10 million tons per year once operations stabilize. Tegbe said the project would not require direct federal funding. The Chinese partners would raise the funds themselves, subject to approval by China’s National Development and Reform Commission (NDRC). They would then recoup their investment through a production-sharing agreement.

Located in Kogi State in north-central Nigeria, the Ajaokuta Steel Company was built in 1984. The plant never reached full production before becoming fully inactive, largely because of inconsistent industrial policies and legal disputes over the iron ore concessions meant to supply it.

Nigeria currently produces about 1.2 million tons of steel per year, mainly from recycled scrap metal, while annual demand is estimated at 10 million tons. The country has several iron ore deposits in Kogi and Niger states.

Walid Kéfi