Nigeria’s solid minerals sector is seeing significant progress with a $1 billion iron ore-to-steel project planned for Kogi State. This development follows successful negotiations between the Minister of Solid Minerals, Oladele Alake, and Chinese firm Sinomach-He, facilitated during President Bola Ahmed Tinubu’s recent visit to China.
Alake affirmed the federal government’s commitment to accelerating the project. In a statement released by his special adviser, Kehinde Bamigbetan, the minister highlighted the administration’s shift from the pit-to-port policy, which allowed the export of raw minerals, to a new model focused on local value addition. This change is aimed at creating jobs, promoting skill transfer, and improving Nigeria’s trade balance.
Alake emphasized the importance of local processing in mining. “The trade balance between Nigeria and China is currently in favor of China, mainly because Nigeria exports raw minerals. By exporting finished or semi-finished products, Nigeria will benefit from a better balance of trade, higher foreign exchange earnings, and the potential to reduce our debt burden.”
Chief Abel Edijala, CEO of Chart and Capstone Integrated Ltd., praised the government’s efficient and transparent mining license processes. “We applied for an exploration license and received approval without needing personal lobbying, which reflects a fair system,” Edijala said. He explained that the project would help meet Nigeria’s industrialization needs and called for tax waivers on equipment and tax holidays to navigate economic fluctuations.
Hou Encai, vice manager of Sinomach-He, outlined the company’s readiness to start the project. Established in 1958, Sinomach-He is a state-owned enterprise with expertise in mining, ironmaking, steel production, and infrastructure construction, serving 80% of China’s steel needs. Encai expressed confidence in the company’s ability to deliver, noting that Sinomach-He has the technology and equipment necessary for mining and transportation.
The Memorandum of Understanding (MOU) signed between the Nigerian and Chinese firms designates Sinomach-He as the lead contractor, responsible for the engineering, procurement, installation, commissioning, and training needed for the project.
Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, confirmed the integrity of Sinomach-He, following a successful due diligence review conducted by the Nigerian embassy.
Other notable participants in the project include Professor He Lixiong, executive secretary-general of the China Association of Small and Medium Enterprises’ Working Committee for Overseas Co-operation, and Innocent Okonkwo, chairman of the Belt and Road Africa Economic Initiative.
This project is poised to strengthen Nigeria’s industrial sector and create economic opportunities across the continent.
