For a $1 billion (N1.6 trillion) iron ore-to-steel project in Kogi State, the Federal Government has inked a Memorandum of Understanding (MoU) with two Chinese businesses, Sinomach-He and China Civil Engineering Construction Corporation (CCECC).
This project, which is a major milestone in Nigeria’s industrialization process, intends to support local value addition in the solid minerals industry.
President Bola Tinubu’s Special Advisor on Information and Strategy, Bayo Onanuga, provided the information in a statement.
President Tinubu signed the Memorandum of Understanding (MoU) while attending the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, recently.
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“Solid Minerals Development Minister Dr. Dele Alake has hailed the $1 billion (N1.6Trillion) new iron ore to steel project planned for Kogi State as breakthrough in the Federal Government’s campaign to make local value addition the model of development in the solid minerals sector,” the statement read in part.
The statement noted that the Minister of Solid Minerals Development, Dr. Dele Alake, hailed the project as a key milestone in the Federal Government’s efforts to shift Nigeria’s mineral sector from raw material exports to local processing.
This transformation, he noted, is expected to create jobs, facilitate skill transfer to the youth, and improve Nigeria’s trade balance by exporting value-added products. Alake also noted that future mining licenses will mandate companies to include local processing plans, reinforcing the government’s commitment to enhancing local value addition in the sector.
The statement noted that Nigeria’s trade balance with China is unfavorable due to the export of raw minerals, with Minister Alake stating, “Once Nigeria begins exporting value-added mineral products, our balance of trade will be more favorable, and our foreign exchange earnings will increase.”
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Chief Abel Edijala, CEO of Chart and Capstone Integrated Limited, commended the government’s transparent licensing process, noting that their exploration license was approved without red tape. He explained the project’s role in supplying iron ore to a steel plant, aiding Nigeria’s industrialization, and called for tax waivers during the project’s early stages to manage economic fluctuations.
Sinomach-He Vice Manager Hou Encai affirmed the Chinese company’s readiness to begin work. Established in 1958, Sinomach-He, which handles 80% of China’s steel needs, will serve as the master contractor, overseeing engineering, procurement, installation, and commissioning.
“In mining, we have the technology and equipment needed for iron ore excavation, and we will ensure the successful transport of ore to the factory for steel production,” Encai stated.
The statement further noted that the Federal Government’s partnership with the Chinese firms is expected to boost Nigeria’s local production, create jobs, and support President Tinubu’s push for sustainable industrial development.
