[ferro-alloys.com]The Nigerian government "should not take long to choose an operator" for Nigeria's long-idled Ajaokuta steelworks, Minister of Mines and Steel Development Abubakar Bawa Bwari said Wednesday.

Negotiations are already underway, with "a lot of investors showing interest," including a consortium of Nigerian companies, Russia's TPE, the original constructor of the Kogi state facility, a steelmaker from Ukraine and several Chinese companies from China, Bwari said in an interview at the Mines and Money event in London.

The 5 million mt/year integrated blast furnace-based plant is expected to restart at an initial rate of 2.5 million mt/year in an effort to serve the local market, Bwari said.

Construction of the multibillion-dollar mill, Nigeria's largest, was started by the Soviet Union in 1979 under a cooperation agreement with Nigeria. Although the mill was reportedly virtually finished by the mid-1990s, the project was allegedly mismanaged, lacked infrastructure and has never produced any steel.

Nigerian speakers at the conference signaled that as part of a push to increase Nigeria's economic self-sufficiency and decrease its dependency on oil, the government now intends to boost mining industry development and sees the steel industry as a pillar of economic diversification. Crude currently accounts for 90% of the country's export earnings. As a result, the government has resumed talks about bringing Ajaokuta online.

Ajaokuta is currently controlled by the state after a proposed private-sector operator, India's Global Steel Holdings Ltd., had its concession terminated.

According to Bwari, the concession was canceled in 2008. The company appealed that move in an international court of arbitration. Nigeria then struck an out-of-court settlement with the company, but refused to allow it to operate the steel plant.

However, Global Steel Holdings received a seven-year concession for Ajaokuta's iron ore processing plant in Itakpe starting in 2016, the minister said. The Indian company is processing Nigerian iron ore at the plant for future use at the steelworks, according to Bwari.

"In the settlement, it was agreed that the [iron ore plant operator] would satisfy the supply of iron ore to Ajaokuta, which would have the right of first refusal," the minister said.

The prospects for Ajaokuta steel production starting are improving because of the recent completion of work on major infrastructure serving the plant, Bwari said.

The rail link connecting Itakpe, Ajaokuta and the port at Warri on the Atlantic Ocean coast for possible exports has been completed, the minister said. In addition, an inland port has been completed and dredging of a river almost completed, he said.

Nigeria currently consumes some 6.5 million mt/year of steel, 70% of which is imported, Bwari said.

Even with Ajaokuta online, there will still be a "gap" between domestic supply and demand, he said.

（S&P Global Platts）

• [Editor:王可]