Respite to metal industry as FG plans bauxite, iron ore development

The Federal Government has finally brought respite to the long-neglected basic metal, iron and steel industry, having now initiated plans to develop bauxite and iron ore, which are essential raw materials in the industry.

Bauxite is used for aluminium production and for production of refractory materials, chemicals or cement. Similarly, iron ores are rocks from which metallic iron can be economically extracted. Hence, they serve as key raw materials in the steel sub-sector.

Oluyinka Kufile, vice-chairman, basic metal, iron and steel group of the Manufacturers Association of Nigeria (MAN), and chairman, Qualitec Industries Limited, disclosed this to Real Sector Watch in an exclusive interview in Lagos.

According to Kufile, the ministry of industry, trade and investment, as well as that of mines and steel development, have set plans in motion to bring in first-class companies to mine bauxite to produce large quantities of alumina, which are basic raw materials for aluminium firms.

“The government is also planning to create the right atmosphere to bring in smaller smelter companies,” Kufile said.

For the steel sub-sector, Kufile said that the Federal Government had a similar plan to bring companies to bid for mining licences of iron ore.

“What the Federal Government now wants to do is for the country to have the capacity to produce local steel from iron ore and grow engineering and production facilities to strengthen the economy,” he said, saying “a committee has already been set up on this. The committee will carry out a survey and will later create room for international bidders for mining licenses.”

The Federal Government has what is called the steel fund, which will be given to genuine investors in the industry at about 7 percent interest rate, he said.

The basic metal, iron and steel industry, is made up of iron and steel firms as well as aluminium manufacturers. Western Metal Products Company Limited (WEMPCO) and Midland Rolling Mills Limited are two major players in the steel industry. In the aluminium category, there are Qualitec Industries, First Aluminium and Tower Aluminium, among other small- and medium-scale companies.