The Minister of Solid Minerals Development, Dele Alake, has praised the $1 billion iron ore to steel project planned for Kogi State as a major milestone in the Federal Government’s push to make local value addition the cornerstone of Nigeria’s solid minerals sector.
The project, spearheaded by Nigerian company Chart and Capstone Integrated Limited in collaboration with China’s Sinomach-He, aims to transform Nigeria’s mining industry by processing raw minerals locally rather than exporting them in unprocessed forms.
Addressing the project’s promoters during President Bola Ahmed Tinubu’s recent visit to China, Alake expressed the Federal Government’s commitment to supporting the initiative, highlighting its potential to create jobs, transfer skills, and improve Nigeria’s trade balance.
Alake emphasized that the government has reversed the “pit-to-port” policy, which allowed companies to export raw minerals without adding value locally.
“This project aligns with our new policy that mandates local processing of raw minerals before they are exported. It’s the best guarantee of job creation for our youths and increased foreign exchange earnings,” he said.
He further explained that adding value to locally mined minerals would significantly improve Nigeria’s trade relationships with countries like China, which currently benefits from a trade surplus.
Alake stressed that mining companies must now include plans for processing raw materials locally when applying for licenses.
“The trade balance between Nigeria and China heavily favours China because the minerals we export are in their raw form. Once we start exporting finished or semi-finished value-added products, our balance of trade will improve, and so will our foreign exchange earnings,” he added.
He also noted that local value addition could help reduce Nigeria’s debt burden over time.
Chief Abel Edijala, CEO of Chart and Capstone Integrated Limited lauded the efficiency of the Federal Government’s license application process, which he described as free of red tape and corruption.
“We applied for an exploration license at the Mining Cadastral Office, and our application was approved within a reasonable period without needing to see anyone,” Edijala said.
He praised the fairness of the system and emphasized that the iron ore site would feed a steel manufacturing plant that would fuel Nigeria’s industrialization efforts.
Edijala further called for tax waivers and holidays during the project’s early stages to account for macroeconomic fluctuations and ensure smooth operations.
Hou Encai, Vice Manager of Sinomach-He, explained the company’s readiness to begin the project, noting that the state-owned enterprise has decades of experience in mining and steel production.
Founded in 1958, Sinomach-He employs over 15,000 people, including 2,000 engineers, and handles 80% of China’s steel needs.
Encai assured that Sinomach-He would bring its expertise in excavation, iron-making, and steel rolling to the Nigerian project.
“We have the technology to excavate iron ore, assess the feasibility of extraction, and produce the necessary equipment, including excavators and trucks for transportation,” Encai said.
According to the Memorandum of Understanding, Sinomach-He will serve as the master contractor, handling the engineering, procurement, installation, commissioning, and training required for the project.
