Restart process begins for Delta Steel
The Nigerian Federal Government has taken a new step toward restarting operations at Delta Steel Company. A Sub-Lease and Operating Agreement was signed between the National Iron Ore Mining Company (NIOMCO) and Premium Steel and Mines Limited to support the reopening of the plant in Ovwian-Aladja.
The agreement is expected to establish a framework for ensuring a sustainable supply of iron ore, one of the key elements required for the integrated steel plant to resume production.
More than USD 1.3 billion investment
Premium Steel and Mines Limited has committed to investing more than USD 1.3 billion in the rehabilitation and modernization of the plant, as well as in raw material exploration and mining activities.
The company also aims to restore the plant to its annual liquid steel production capacity of 1 million tons, provided that a sustainable supply of iron ore is secured.
Commissioned in 1982, Delta Steel Company had an annual liquid steel production capacity of 1 million tons. Before its closure, the plant operated at around 25% of its installed capacity.
25,000 jobs
The project is expected to create approximately 25,000 jobs in total, including around 5,000 direct and more than 20,000 indirect jobs. The Nigerian government also aims for the project to contribute to strengthening the country’s domestic steel value chain and reducing dependence on imported steel products.
Iron ore, railway and port connection
The new agreement is expected to support the revival of the National Iron Ore Mining Company and the development of the Ajabanoko iron ore deposits.
With the implementation of the project, freight transportation on the Central Rail Line is also expected to increase, while the use of the Delta Steel Company Jetty is planned to be improved. This is intended to create a broader industrial value chain connecting the mining, railway, maritime transportation and manufacturing sectors.
Plant targeted to resume production within 18-24 months
Nigeria’s Minister of Steel Development, Abubakar Audu, stated that the revival of Delta Steel Company does not simply mean restarting an idle plant, but aims to rebuild the country’s domestic steel production capacity.
Audu said that, in addition to investment, iron ore supply, adequate energy supply, transportation infrastructure and coordinated public policies are required for the project to succeed.
The government aims to rehabilitate the Delta Steel plant and bring it back to commercial production within 18 to 24 months. The project is also expected to contribute to Nigeria’s target of producing 10 million tons of liquid steel annually by 2030.
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