The federal government has hailed the $1 billion (N1.6trillion) new iron ore to steel project planned for Kogi state as breakthrough in the federal government’s campaign to make local value addition the model of development in the solid minerals sector.
Addressing the promoters, Chart and Capstone Integrated Limited of Nigeria and Sinomach-He of China, on the sidelines of the visit of President Bola Ahmed Tinubu to China in Beijing, Minister of Solid Minarets Dr Dele Alake pledged the cooperation of the federal government with the promoters towards ensuring the delivery of the project as fast as possible.
According to him, the federal government has reversed the pit to port policy under which mining companies exported raw minerals to extraction with local value addition which is the best guarantee of jobs for the youths, skills transfer and better balance of trade between the country and her trading partners.
He noted that to promote local value addition, he has announced that applicants for licences to mine must disclose plans for processing the raw minerals as part of the conditions for approval.
“The trade balance between Nigeria and China is over one billion dollars in favour 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 favourable and our foreign exchange earnings will improve. With aggressive local value addition and the revenue from it, the prospects of reducing our debt burden in the nearest future is possible,” he said.
Presenting the Memorandum of Understanding signed by both companies to the minister, the chief executive officer of Chart and Capstone Integrated Limited, Chief Abel Edijala commended him for putting in place efficient licence application process that works without red tapes and corruption.
“We applied for an exploration licence 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. This shows that the system you have put in place is fair and works for all. I must commend you for this,” Edijala said.
He explained that the model is that the iron ore site would feed the steel manufacturing plant and grow to service the needs of the Nigerian economy for industrialisation, saying thst the project will require tax waivers for the importation of equipment and tax holidays during the take-off period to cope with the flunctuations in the macro-economic system and meet targets.
Sinomach-He’s vice manager, Hou Encai said the company engages in mining, iron making, steel rolling, steel making, construction of infrastructures and handles 80 per cent of the steel needs of the Chinese economy.
According to the MOU, Sinomach-He shall be the master contractor and deploy its expertise in the engineering, procurement, installation, commissioning, and training of the project.
Earlier, Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, confirmed the integrity of Sinomach-He disclosing that a team from the embassy had conducted due diligence on the company and found it suitable for the transaction.