The Federal Government has signed a $1 billion deal with China for an iron ore steel project.
This agreement, revealed by Dr. Oladele Alake, Special Adviser to the Minister of Solid Minerals Development, is a significant step in the government’s effort to enhance local value addition in the solid minerals sector.
The deal, focused on Kogi State, represents a major breakthrough in promoting local processing of minerals rather than exporting them in raw form.
Addressing the project’s promoters—Chart and Capstone Integrated Limited of Nigeria and Sinomach-He of China—during President Bola Ahmed Tinubu’s recent visit to China, Alake expressed the Federal Government’s commitment to expediting the project’s completion.
He emphasized that the government has reversed the previous pit-to-port policy, which allowed for the export of raw minerals, in favor of local value addition.
“The trade balance between Nigeria and China is over one billion dollars in favor of China because the minerals imported from Nigeria are essentially in raw forms.
Once Nigeria starts to export finished or semi-finished value-added mineral products to China and other trading partners, our balance of trade will be more favorable, and our foreign exchange earnings will improve,” Alake said.
He highlighted that promoting local value addition would also help reduce Nigeria’s debt burden in the future.
Chief Abel Edijala, CEO of Chart and Capstone Integrated Limited, praised the efficient and transparent licensing process implemented by the Ministry.
“We applied for an exploration license for our iron ore mining project at the Mining Cadastral Office, and we did not need to see anybody before our application was approved within a reasonable period,” Edijala noted.
He outlined the project’s model, which involves using the iron ore site to feed a steel manufacturing plant and supporting Nigeria’s industrialization.
The project will require tax waivers for importing equipment and tax holidays during the initial phase to manage macroeconomic fluctuations.
“This shows that the system you have put in place is fair and works for all. I must commend you for this,” Edijala added.
READ ALSO: Lagos, Chinese Firm Sign MoU On 50 MW Solar Power For LASU, Other Institutions
Sinomach-He’s Vice Manager, Hou Encai, detailed the company’s extensive experience and capabilities, including its mining technology and equipment for iron ore extraction and transportation.
According to the Memorandum of Understanding (MOU), Sinomach-He will act as the master contractor, handling engineering, procurement, installation, commissioning, and training for the project.
The meeting also included participants such as Professor He Lixiong, Chairman of the Belt and Road Africa Economic Initiative, Mr. Innocent Okonkwo, and senior representatives from Sinomach-He.
Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, confirmed the integrity of Sinomach-He, noting that the embassy had conducted due diligence and found the company suitable for the transaction.
