AJAOKUTA STEEL PLANT: An investment of more than $8b rotting in the African sun.

No Nigerian can visit Ajaokuta Steel Company ASC, see investments of more than $8b rotting in the African sun and not cry. I went there, I cried. what exactly is the problem? I have written severally on this topic, but today let me do a comprehensive post.

Ajaokuta Steel Company is massive, she has 68km road network, 24 housing estates on the project. Some of the estates have over 1,000 homes, a seaport, a 110mw power generation plant, there are 43 separate plants in Ajaokuta alone. It is estimated that if Ajaokuta becomes operational, it will create 500,000 jobs.

There is no industrialized nation on earth that does not have a steel sector it’s that simple. A report by the Central Bank of Nigeria shows that Nigeria currently imports steel, aluminum products and associated derivatives of approximately 25 metric tonnes per annum estimated at $4.5bn, this figure will continue to rise, and the Nigerian economy continues to expand. Ajaokuta is an integrated steel company, it was designed by the Russian to be self-sufficient to get all its inputs from Nigeria and make steel. Ajaokuta strength is also its weakness, Ajaokuta can only work with all inputs available.

This will be a slightly technical post, but please try and follow.

Steel is an alloy of iron and carbon amongst other things, iron is the base metal in steel, to make steel, you need Iron Ore, Coke from Coal, Limestone as main components. these components are mixed in a blast furnace to produce liquid steel which can be long steel for rail lines or flat steel for automobile making etc

To give a simple example, look at steel as making jollof rice, iron ore is the rice, the limestone and coke are the pepper and salt the pot is the blast furnace. At a steel plane the blast furnace is ONLY turned on when the steel company is ready to make steel. Blast furnaces operate continuously and are never shut down. The raw material to be fed into the furnace is divided into several small charges that are introduced into the furnace at 10- to 15-min intervals. this means everything must be in place BEFORE the blast furnace is turned on, the iron ore, the coal, etc

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