•Says estimated $2 billion needed to revamp plant
CHIGOZIE AMADI
The federal government has defended its decision to carry out another audit of the Ajaokuta Steel Company Limited, despite the previous three in the past, explaining that market and economic realities dictate that a fresh review should be conducted.
Minister of Steel Development, Mr. Shuaibu Audu, who spoke on Arise Television, explained that the last audit of the company’s assets were carried out about 10 years ago when the value of the naira compared to the dollar was just about N200.
In September 2024, the federal government signed a Memorandum of Understanding (MoU) with the original builders of the Ajaokuta Steel Plant, Tyazhpromexport, and their consortium members, Novostal M and Proforce Manufacturing Limited, to conduct the technical audit.
The audit, which kicks off this February is expected to lay the foundation for the rehabilitation, completion, and operation of the steel plant and the National Iron Ore Mining Company in Kogi State, Nigeria.
But the minister argued that the lack of a proper understanding of the issues made federal lawmakers question the audit recently, insisting that a technical audit was paramount before the long-abandoned project will take off.
“I think part of the issue is, perhaps, some misunderstanding or some lack of understanding of some of the issues. The issue around it is that the last audit that was done was done about 10 years ago. Three had been done? Yes, at least 10 years ago, and the ones that were done were done before that.
“Now, you can’t have a 10-year-old audit that is bankable. You know, you need an audit, a technical audit report that is bankable, that reflects the reality of the current situation. When the audit was done then, the dollar was less than N200.
“Inflation has moved up in multiples since then. Economic variables have changed, market dynamics have changed, there’s since been a war in Russia and Ukraine. A lot of parameters are now very much different.
“So for, you know, for anyone to say that we use a 10-year-old audit, I would have to vehemently disagree with that. I think that would be improper, and that would not be doing justice to Nigerians,” Audu stressed.
Audu also explained how the $2 billion estimated figure meant for the rehabilitation of the steel plant came about, despite awaiting the kickoff of the audit.
“These are estimates from technical experts, from some of my technical experts and some of the consultants that work in the steel industry. A proper estimate would come out after a proper audit, a specific number would come out after the technical audit. But, we can’t just be shooting in the dark.
“We need to have an estimate of the expectation. As a government, if you are going into a negotiation, you can’t go to a negotiation empty-handed. You have to know the sort of things that you are looking for within the ballpark of what you want,” he stated.
On the Aluminium Smelter Company of Nigeria (ALSCON) Plant in Akwa Ibom, Audu described it as shameful the fact that it has been left fallow for years, despite the potential to massively transform the Nigerian economy.
“I got back from Ikot Abasi, in Akwa Ibom, yesterday. And what I would say is that it’s really a shame that you have an asset that I would consider a goldmine. The plant has the capacity to produce just under 200,000 metric tons of aluminum ingots and billets.
“Aluminum is a key component for the automobile sector. We can get our automobile off the ground. It’s a massive plant with massive opportunities. I took a tour of the plant. If you look at the ground that it covers, it’s very massive. It has the potential to create almost 20,000 direct and indirect jobs.
“It has the potential to generate more than $500 million in revenue annually. And it has very, very huge potential. Unfortunately, there are impasse around ownership issues. And we have two different judgments. One, a judgment from the Supreme Court, which favours a particular party. The other, a judgment from the London Arbitration Court, which favours another party.
“Now, those judgments are binding on all of the parties. But because the judgment has been passed by the Supreme Court, what I’m saying, again, it’s very important that it’s not prejudicial to the whole court process.
“But I think the bottom line is, Mr. President summoned a meeting last year. He called me into a meeting in his office in the villa in July last year, where the chairman of ALSCON was in attendance together with some of my colleagues, as well as the special adviser to the president on energy. And he gave me a charge that I should ensure that all the issues around the aluminum smelter company are resolved within the quickest possible time,” he added.
