Monday, 21 December 2015

Nigerian govt. vows to reactivate Ajaokuta, ALSCON

The current status of both the Ajaokuta Steel Company and Aluminium Smelter Company

The Minister of Solid Minerals, Kayode Fayemi, has described the current status of both the Ajaokuta Steel Company and Aluminium Smelter Company of Nigeria as symbols of collective shame and embarrassment for all Nigerians.

With Nigeria currently spending over N3 trillion annually on importation of steel and aluminium products, government established the two complexes to help the country save the huge losses through local production of the commodities.

However, both multi-billion dollar projects have been entangled in dubious and corrupt privatisation arrangements and subsequently abandoned to waste.

But speaking in Abuja at his inaugural media briefing on the state of the country’s solid minerals sector, the Minister said the Federal Government has resolved to turn the companies’ fortunes around and give value to Nigerians.

“Not many things have had a sobering effect on me as what I have seen in the solid mineral sector since I took up this assignment,” the minister said.

“It is a collective shame for all Nigerians for two massive projects as Ajaokuta Steel and ALSCON to be allowed to remain moribund in spite of the resources invested and their immense potentials,” he added.

Although Mr. Fayemi said the cost of reactivating Ajaokuta in particularly was not one for the government alone to bear, he said President Muhammadu Buhari was so disturbed by the matter that he would be willing to approve a joint financing arrangement for the project.

He assured that before the end of the first quarter of 2016, government would have a direction, whether to take over and run Ajaokuta, or look for an alternative arrangement, after the lingering legal issues surrounding the company may have been resolved.

Government, he said, was willing to hold discussions with the relevant interested parties to disentangle the company and its affiliates to agree on the best way forward.

The discussions, the minister explained, would involve the Ministry of Solid Minerals, with its Justice counterpart; Bureau of Public Enterprises, and other interested players, particularly Global Infrastructure Nigeria Limited.

“Government sees that as a priority,” Mr Fayemi said. ”It is unacceptable to have so much investment and just walk away from it. We just have to fix Ajaokuta.

“The total cost to fix Ajaokuta is not what the country can afford easily. We have to figure out creative and innovative ways to partner with local and international financiers who can make it happen so that we begin to produce liquid steel and export products from the company.”

Noting the important contributions of the solid minerals sector to the growth of the country’s economy, the minister lamented that 80 per cent of activity in some regions was dominated by illegal artisanal mining conducted informally, without any revenue for the country.

He spoke of plans by government to bring these informal miners into a legalized framework and ensure that they began to pay government the right set of taxes and royalties.

“I want to be clear: there will no longer be a free lunch, as the Mining Act will be firmly enforced,” he said.

He said President Buhari’s agenda was to ensure that the solid minerals sector became a key source of economic growth and diversified revenue base for the country.

To realise the agenda, Mr. Fayemi said the Ministry would work with the National Assembly to remove all obstacles, including poor funding, and regulatory framework, to enable the sector work.

Part of the immediate priorities of the administration, he said, include accelerating investor confidence in the mining markets, and getting the sector growing and creating jobs; creating a new mining industry, and reviewing overlapping and inactive titles and contracts to guarantee integrity of mining licenses.

Other priorities, he said, include the establishment of Mines Police.

“Starting March 1, 2016, we will start enforcing the “use it or lose it” doctrine enshrined in the Nigerian Minerals and Mining Act, 2007,” Mr. Fayemi said.

”The period from today to 1st March 2016 should be considered an amnesty period to allow regularization of papers.”