Nigeria has signed a gas-supply agreement to power the Ajaokuta Steel Company, a state-owned facility that has remained non-operational for nearly 50 years despite over $8 billion in public investment. The deal will deliver up to 50 million standard cubic feet of gas daily to an independent power plant serving the complex on the Niger River, about 200 kilometers south of Abuja. Officials cite the lack of reliable gas as the primary barrier to reviving the plant, which was conceived in 1979 with Soviet support but has never produced commercial steel.
Nasir Naeem Abdulsalam, managing director of Ajaokuta Steel, said the gas supply is critical for both the steel plant and its power infrastructure, all of which depend on gas. He was appointed in April 2025 to lead the turnaround effort and confirmed that investors from the US and China have conducted technical assessments, though he declined to name them. According to Abdulsalam, the blast furnaces could be operational within six to seven months, with full operations possible within two to three years. The government is pursuing a build-operate-transfer model rather than outright privatisation, aiming for state returns over a 10-to-15-year period.
A small modular blast furnace has been constructed and is currently producing manhole covers, utility poles and rail components for local use, but the main furnaces remain idle. Yusuf Ochejah, secretary general of Nigeria's metallurgical society and a former assistant director at Ajaokuta, dismissed the revival plans, stating the core systems have never been tested and any investor would face massive setup costs. Previous attempts by Russian firm Tyazhpromexport, Japan's Kobe Steel and India's Ispat Industries all failed to restart operations.
The same infrastructure deficiencies that deterred past investors remain unproven despite new gas commitments. If the blast furnaces have never operated, as a former plant official states, then current timelines assume untested functionality. This gap between promise and proven capability directly affects the credibility of Nigeria's 2030 steel-output target.
Editorial note: AI-assisted opinion, not established fact. Full disclaimer →
