The Minister of Solid Minerals Development, Dr. Oladele Alake has praised the $1 billion (N1.6 trillion) iron ore-to-steel project planned for Kogi State as a significant milestone in the Federal Government’s push to prioritise local value addition in the solid minerals sector.
Speaking to the promoters – Chart and Capstone Integrated Limited of Nigeria and Sinomach-He of China – on the sidelines of President Bola Tinubu’s recent visit to Beijing, Alake reaffirmed the Federal Government’s commitment to collaborating with the companies to expedite the project’s delivery.
He emphasised that the Federal Government has shifted away from the “pit-to-port” policy, where mining companies exported raw minerals. The new approach prioritises local value addition, which is seen as the best way to create jobs, transfer skills, and improve Nigeria’s trade balance with its global partners.
Alake pointed out that, to promote local value addition, all applicants for mining licenses must now outline their plans for processing raw minerals as part of the licensing approval process.
“The trade balance between Nigeria and China currently stands at over $1 billion in favour of China because most of Nigeria’s exports to China are raw minerals. Once we start exporting finished or semi-finished value-added mineral products, our trade balance will improve, and foreign exchange earnings will increase. With aggressive local value addition, we can significantly reduce our debt burden shortly,” Alake said.
During the presentation of the memorandum of understanding (MoU) signed by both companies, chief executive officer of Chart and Capstone Integrated Limited, Chief Abel Edijala commended the minister for streamlining the mining license application process, eliminating red tape and corruption.
“We applied for an exploration license for our iron ore mining project through the Mining Cadastral Office, and we did not need to lobby anyone. The application was approved within a reasonable timeframe, which shows that the system is fair and efficient. I commend you for this achievement,” Edijala stated.
He explained that the iron ore site will directly feed a steel manufacturing plant, which will help meet Nigeria’s growing industrial needs.
Edijala also noted that the project would require tax waivers for the importation of equipment, as well as tax holidays during the initial phases, to mitigate the impact of economic fluctuations and meet project targets.
Vice manager of Sinomach-He, Hou Encai confirmed the company’s readiness to begin the project. He shared that the state-owned company, established in 1958, employs over 15,000 staff, including 2,000 engineers. Sinomach-He specialises in mining, iron and steel production, infrastructure construction and currently supplies 80 per cent of China’s steel needs.
“In mining, we have the technology to excavate ore and assess the feasibility of mineral extraction. We also produce the necessary equipment, including excavators and trucks, to transport iron ore from the mining site to the factory,” Encai said.
According to the MoU, Sinomach-He will serve as the project’s master contractor, overseeing engineering, procurement, installation, commissioning and staff training.
A statement by special adviser to the minister, Kehinde Bamigbetan highlighted that other attendees at the meeting included executive secretary-general of the working committee for Overseas Cooperation of the China Association of Small and Medium Enterprises, Prof. 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.
Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi confirmed the legitimacy of Sinomach-He, revealing that the embassy had conducted due diligence and found the company suitable for the project.
