Towards steel development revolution in Nigeria

First: Creating access to Capital by experienced indigenous metallurgists, mineral processing engineers and business entrepreneurs.Lack of access to capital is so far the greatest obstacle to local participation in the Nigerian private sector steel industry. Out of nearly 30 steel melt shops mainly concentrated in Lagos and Ogun states local participation has been minimal= 5%. […]

First: Creating access to Capital by experienced indigenous metallurgists, mineral processing engineers and business entrepreneurs.
Lack of access to capital is so far the greatest obstacle to local participation in the Nigerian private sector steel industry. Out of nearly 30 steel melt shops mainly concentrated in Lagos and Ogun states local participation has been minimal= 5%. All others are foreign dominated whom we found out that nearly all of them have access to capital from their home countries’ banks, which willingly extend export  credit guarantees  for equipment manufactured in their own countries to support  export  promotion of their countries equipment.
In 2002 the National Assembly passed a law setting up what is called the Non-Oil Minerals Development Fund. By this year, 2013, about one trillion naira has accrued to the fund (in eleven years of its existence). So far not one indigenous metallurgical or solid minerals project has been funded from the Fund. The Fund was feebly inaugurated early this year and up till today with no money to operate itself, talk more of funding other projects. Stake-holders in the sector especially the Nigerian Metallurgical Society must launch a big campaign in the media and in the National Assembly including town hall meetings to compel the government to stop using the funds for buying bullet proof BMW cars and all sorts of UFO-looking SUVs.  
We must do the same with the 10% import levy on steel imports meant for indigenous steel development established for the past 10 years. We must demand audit of the fund to know its current status and application. The Freedom of Information Act allows us as a guild to demand to know the status of all funds meant for the development of our sector and lobby actively on a national scale to ensure their proper use. With access to those developmental and sectoral funds, following duly recognized accountable standards, Nigerians can increase their participation and stake-holding in the sector. If these funds are not made available, foreign investors will continue to dominate the sector with consequent outward capital flight injurious to our national economy.
Second: Acquiring and digesting, technological innovations in the world’s steel and mineral processing sector.
The international cost of finished steel in the last 5 years has not been very exciting. Profit margins have dwindled. Only plants which invest in innovations and new technology and techniques will survive. Many years ago re-reheating furnaces use to work full time; today there is direct charging of hot billets from concast shearing machines directly to the rolling mill stands. Only 10% of billets which miss the process now get reheated saving a lot of gas or black oil or coal. New ultra-high efficiency electric and induction furnaces now consume 30% less energy than they used to consume. Blast furnaces now have more efficient conveyor belt loading systems, coal injection systems etc.
Research and Development in value chain improvement and technological process optimization, with the sole aim of improving quality while reducing energy and other costs, has become very necessary.
   Direct Reduced Iron technologies are now feeding in green pellets instead of building highly expensive oxide pellet plants and kilns to process oxide pellet which are then transferred to DRI reduction plants via SLRN rotary kilns or rotary Hearth furnaces or shaft furnaces.
Any investor who is not up to date with these innovations and processes will make very wrong investment decisions. The Nigerian Metallurgical Society must be the intellectual power house to disseminate and popularize these techniques in metallurgy and mineral processing.
Third: Re-educating our guild to attain a paradigm shift from dogmatic and theoretical metallurgy to techno economic and commercial metallurgy and mineral processing.
If the logistics of delivery and current escalating price of coking coal leads us to a conclusion that our price of Steel ex-Ajaokuta will be above the price of other locally produced or imported Steel we must re- think our strategy to use technologies that will permit the use of local substitutes following a different  technology route. If our cost of completion of Ajaokuta is put at USD 700 million and we have a technology that can produce liquid Steel with an investment of about USD 200 million which we can afford.
 We have waited for 30 years. We are told it will be a very serious work for another five years to make the blast furnace operate efficiently. If a Direct Reduced Iron plant using local coal can be completed in 24 months together with a high efficiency EAF to produce liquid steel, only an idiot will oppose this common sense.  
Fourth: Creating dynamic partnerships and alliances with stake holders in government, in business and the universities to revive our state-owned steel plants and to commercialize discoveries and patents registered by our members.
Our guild must necessarily accept that its discipline alone cannot provide the answers to reviving our ailing Steel sector. It alone cannot improve local participation in the sector. Collaboration between metallurgists, businessmen bankers and politicians will be necessary to break the jinx of our poor performance.  
FIFTH: Constituting a very strong lobby and pressure group to tap opportunities for Nigerians.
The great opportunity available for employment of sixty four million employable youth who are increasing every year lies in our development of physical   infrastructure, housing, power, water/dams, transportation infrastructure, motor vehicles, commercial refineries and petro chemical plants. Steel inputs into these projects like the Dangote USD 9 billion projects on refineries and petro Chemical plants and the trans-Saharan natural gas transportation pipeline, the 700 hundred million dollars railways modernization project for example. At least 1 billion USD out of the 9 billion USD for the Dangote refineries and petrochemicals will be used for steel tanks structural steel and pipes.
SIXTH: Developing complete value chains and complete business and economic circles for minerals and metals.
Why must we be raw materials exporters? Why should we be condemned to exporting iron ore concentrates, coal, ferro- alloy ores, lead ore, zinc ore at very low prices? We must be able to build plants that process to finish our ores. Our iron ore must go out at the barest minimum as Hot Briquetted Iron (HBI) and finished longs and flats for our local market and the African market. We must set up plants to add value not just to earn more but to give employment to our own people.
The metals sector should produce finished goods sold in Nigerian high street shops. Our gold, silver etc should not just be exported as dust at very low prices. We must develop local brands which our people buy rather than to go to Dubai and China to buy. Zamfara and Illesha gold deposits should end up with Nigerian goldsmiths and in shops in Nigeria. I wonder what has happened to a local and very successful goldsmith retail brand called Ogbe craft in the Nineteen Seventies.
 What do we want? Liquid Steel! When do we want it? Now!

Abdulrahman, Chairman of Total Steel Limited, made these remarks, excerpted from his keynote address to the 29th Annual General Meeting of the Nigerian Metallurgical Society, which ended in Ajaokuta earlier this month