The Federal Government has signed a $1 billion iron ore and steel project deal with China. This agreement is set to boost local value addition and drive the development of Nigeria’s solid minerals sector, starting with Kogi State.
The deal was disclosed in a statement by Kehinde Bamigbetan, Special Adviser to the Minister of Solid Minerals Development, Dr. Oladele Alake. The signing took place during President Bola Ahmed Tinubu’s recent visit to China, where Nigerian officials met with Chinese partners Chart and Capstone Integrated Limited, alongside Sinomach-He, a major Chinese state-owned enterprise.
Oladele emphasized the Federal Government’s commitment to reversing Nigeria’s former “pit-to-port” policy, which saw raw minerals exported with little benefit to the local economy. Instead, the new focus is on local value addition, which promises more jobs for Nigerian youths, increased skill transfer, and a healthier balance of trade between Nigeria and its partners.
“The current trade imbalance, which favors China,favoursrgely due to Nigeria’s export of raw minerals. However, with this new iron ore deal, Nigeria will begin exporting finished or semi-finished mineral products, significantly improving our foreign exchange earnings and trade balance,” Alake said.
In line with this shift, Alake announced stricter conditions for mining license approvals. Companies applying for licenses must now include plans for processing raw minerals locally, ensuring that Nigeria reaps the benefits of its natural resources.
Read also: Edwin Clark urges IGP to arrest Wike over threat to ‘Put Fire in States’
Sinomach-He, one of China’s largest and oldest companies in the steel industry, is set to take on the role of master contractor for the project. Vice Manager Hou Encai revealed that the company has over 15,000 staff, including 2,000 engineers, and handles 80% of China’s steel production needs. Encai assured Nigerian officials of Sinomach-He’s readiness to begin the project, bringing their expertise in mining, iron making, steel production and infrastructure development to the table.
“We have the technology, equipment, and experience to make this project a success. Our trucks and machinery will transport iron ore from the mines to the steel plants, ensuring efficient production and delivery,” Encai stated.
Chart and Capstone Integrated Limited’s CEO, Chief Abel Edijala, praised the Nigerian government for streamlining the license application process, making it free of corruption and red tape. The iron ore mining site is expected to supply steel for Nigeria’s growing industrial needs, positioning the country as a major player in global steel production.
The project is also expected to deliver significant economic benefits, including tax waivers for equipment imports and tax holidays to mitigate macroeconomic fluctuations.
