Nigeria is in advanced discussions with a Chinese investor to relaunch the Ajaokuta Steel Company, a long-idled metallurgical complex in Kogi State, with a proposed investment of US$2 billion. The plant, built in 1984, has struggled for over four decades due to mismanagement, legal disputes over iron ore concessions, and inconsistent industrial policies.
Joseph Tegbe, head of international relations for the Nigeria-China Strategic Partnership, told local media that the federal government has shortlisted a Chinese firm after evaluating around ten potential investors. The firm has already deployed a team of 20 engineers to Nigeria at its own expense, who conducted a two-week assessment of the facility. Despite most equipment being obsolete, engineers concluded that the core infrastructure remains viable and that a steel rolling mill could restart operations within six months of project initiation.
The revival plan is being structured in phases. The first phase will focus on restarting the existing rolling mill, which has a capacity of 1.3 million tons annually. Once operations stabilize, output is expected to scale up to 10 million tons per year, closing the gap between Nigeria’s current steel production of about 1.2 million tons and the estimated national demand of 10 million tons.
According to Tegbe, the project does not require direct federal funding. The Chinese partners plan to raise the US$2 billion through private financing, subject to approval from China’s National Development and Reform Commission (NDRC). The investment would be recouped through a production-sharing agreement, giving the investors a stake in the revenue generated by the plant.
The Ajaokuta Steel Company, located in north-central Nigeria, was intended to be a cornerstone of Nigeria’s industrialization strategy. However, decades of stalled construction, legal disputes over the iron ore concessions meant to supply the plant, and inconsistent government policies prevented it from achieving full production. Over the years, efforts to privatize or revive the plant have repeatedly stalled.
Nigeria’s domestic steel industry currently relies largely on recycled scrap metal to meet production needs, which accounts for the 1.2 million tons produced annually. The country has significant iron ore deposits in Kogi and Niger states, but the lack of fully operational integrated steel mills has limited domestic capacity and forced the country to import steel products to meet rising demand.
Analysts say reviving Ajaokuta could have transformative effects on Nigeria’s industrial sector. Beyond increasing steel output, the project could stimulate employment, improve local supply chains, reduce import dependence, and boost downstream industries such as construction, manufacturing, and infrastructure development.
If finalized, the project would mark one of the largest private investments in Nigeria’s steel sector in decades. It would also underscore the growing role of Chinese firms in African industrial projects, particularly in sectors requiring substantial capital expenditure and technical expertise.
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The government has indicated that negotiations are ongoing and that details regarding the investor, financing structure, and production timelines are being finalized. Officials emphasize that the project aligns with Nigeria’s broader industrialization agenda and its efforts to leverage strategic partnerships to revive key manufacturing sectors.
For a country currently producing only a fraction of the steel it consumes, the proposed $2 billion Ajaokuta revival could represent a critical step toward self-sufficiency, industrial growth, and enhanced competitiveness in West Africa’s construction and manufacturing markets.
