The Federal Government has entered into a $1 billion iron ore steel deal with China, marking a significant milestone in Nigeria’s solid minerals sector. This was disclosed by Kehinde Bamigbetan, the Special Adviser to the Minister of Solid Minerals Development, Dr. Oladele Alake, in a statement.
The agreement, signed for Kogi State, is seen as a breakthrough in the Federal Government’s push to prioritize local value addition in the solid minerals industry. The project involves a partnership between Chart and Capstone Integrated Limited of Nigeria and Sinomach-He of China, with the signing taking place during President Bola Ahmed Tinubu’s recent visit to Beijing.
Addressing the project promoters, Dr. Alake assured them of the government’s full support to ensure the timely delivery of the project. He also emphasized the government’s shift from a “pit-to-port” policy—where raw minerals were exported—to a new focus on local value addition. This approach is expected to create jobs for the youth, enhance skills transfer, and improve Nigeria’s trade balance.
To further promote local value addition, Alake announced that applicants for mining licenses must now include plans for processing raw minerals as a requirement for approval. He noted that Nigeria’s trade imbalance with China, currently over $1 billion in favor of China, could be corrected by exporting finished or semi-finished mineral products. This, in turn, would improve Nigeria’s foreign exchange earnings and help reduce its debt burden.
Chief Abel Edijala, CEO of Chart and Capstone Integrated Limited, praised the government’s efficient and corruption-free license application process. He explained that the iron ore mining project would directly feed a steel manufacturing plant, contributing to Nigeria’s industrial growth. However, he noted that tax waivers and holidays would be necessary during the project’s early stages to cope with economic fluctuations.
Hou Encai, Vice Manager of Sinomach-He, explained the company’s readiness to start the project, noting that Sinomach-He, a state-owned enterprise with over 15,000 employees, including 2,000 engineers, has a long history of meeting China’s industrial needs. The company specializes in mining, iron making, steel rolling, and infrastructure construction, handling 80% of China’s steel needs. Encai assured that Sinomach-He has the technology and equipment required for the excavation, mining, and transportation of iron ore.
Under the Memorandum of Understanding (MOU), Sinomach-He will act as the master contractor, overseeing the project’s engineering, procurement, installation, commissioning, and training. Other key participants at the meeting included Professor He Lixiong, Executive Secretary-General of the Working Committee for Overseas Cooperation of China Association of Small and Medium Enterprises, and Mr. Innocent Okonkwo, Chairman of the Belt and Road Africa Economic Initiative.
Earlier, Nigeria’s Consul-General to China, Ambassador Gbadebo Afolabi, confirmed the legitimacy of Sinomach-He, stating that the Nigerian embassy had conducted due diligence and found the company suitable for the deal.
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