Nigeria’s Minister of Solid Minerals, Oladele Alake, has lauded a new $1 billion iron ore-to-steel transformation project planned for Kogi State in northern Nigeria.This initiative represents a significant breakthrough in the Nigerian government’s efforts.

It aims to increase local value addition in the solid minerals sector.The Kogi Steel project is a collaboration between Nigeria’s Chart and Capstone Integrated Limited and China’s Sinomach-He.This initiative marks a crucial step in the Nigerian government’s commitment to prioritize local value addition over raw mineral exports.The project includes an integrated iron ore mine and steel plant with an annual production capacity of 1.5 million tons of steel.

It is expected to create approximately 10,000 direct and indirect jobs.Nigeria’s Kogi Steel Project: A Catalyst for Solid Minerals Sector Revival.

(Photo Internet reproduction)Policy Shift and Economic ImpactThe federal government has reversed the “pit-to-port” policy under which mining companies exported raw minerals.In addition, the new policy requires applicants for mining licenses to include plans for local processing of raw minerals.This shift is seen as the best guarantee for youth employment and skills transfer.

It will also contribute to an improved trade balance between Nigeria and its trading partners.Minister Alake emphasized that when Nigeria begins exporting finished or semi-finished value-added mineral products, the country’s trade balance will improve, particularly with China.He noted, “The trade balance between Nigeria and China is over one billion dollars in favor of China because minerals imported from Nigeria are essentially in raw form.”Economic Diversification StrategyThis project is part of Nigeria’s broader strategy to diversify its economy away from oil dependence.Despite abundant mineral resources, Nigeria’s mining sector currently contributes only 0.3% to the country’s GDP.

This is a significant decline from the 4-5% contribution seen in the 1960s and 70s before the oil boom.The government launched the “Master Plan for Solid Minerals Sector Development” in 2016.

It aims to increase the mining sector’s contribution to 3% of GDP by 2025.Nigeria possesses significant reserves of minerals such as iron ore, gold, coal, limestone, and rare earth elements, but their exploitation remains largely artisanal and informal.Challenges and ProspectsWhile the Kogi Steel project represents a significant step forward, challenges remain in terms of infrastructure, security, and regulatory framework.The success of this project will be crucial in demonstrating the viability of Nigeria’s mining industry.

It will also highlight the sector’s potential for economic diversification.Minister Alake expressed optimism about the project’s potential impact.

He stated, “With aggressive local value addition and the resulting revenues, the prospects of reducing the debt burden in the near future are possible.”As Nigeria continues to push for the development of its solid minerals sector, projects like Kogi Steel are expected to play a pivotal role.In short, these projects will attract foreign investment and help structure the industry for sustainable growth.