Russian MetProm group, which specializes in modernization and construction of iron and steel plants among other things, has agreed to finish the project, Nigerian Minister of Mines and Steel Development, Olamilekan Adegbite said in an interview with Bloomberg. The work will be financed by the state-owned Russian Export Center JSC and the Cairo-based African Export-Import Bank.
The construction of Ajaokuta Steel on the banks of the Niger River was started by a Soviet company, Tyazhpromexport, in 1979. About $8 billion was invested into the project, and it was expected to produce around 3 million metric tons of steel annually, according to Bloomberg.
Though the facility was almost ready, it was not launched due to lack of proper transport infrastructure, Interfax reported. Since the last Soviet specialists left the country, many foreign investors have set their sights on the plant, including those from India, China, and the US.
“We’ve come to the realization that it’s best to go back to those guys who did it initially,” Nigeria’s mines minister said.
After 40 years of inactivity, the plant has been given a second chance, as Russia and Nigeria discussed the issue during the first-ever Russia-Africa economic forum in Sochi in October. Russian President Vladimir Putin and his Nigerian counterpart, Muhammadu Buhari agreed to ensure the completion of abandoned projects initiated by both sides. Russian Minister of Industry and Trade Denis Manturov said he hopes Russian engineering companies will restore and finally launch the facility in Ajaokuta.
“Our task is to renovate the plant, put it into operation, bring it to its designed capacity and return all the investments for the reconstruction. After that, it will be handed over to the Nigerian side,” the vice president of the international business development department at Metprom, Mikhail Matveev, told Interfax. He did not elaborate on the financial details of the project.
The two sides plan to finalize the agreement by January 2020. The works are set to be finished in around two and half years, according to the Russian group’s estimates. However, Nigeria expects the plant to be ready in two years.