Nigeria Moves to Revive Delta Steel With $1.3bn Investment

The Federal Government has signed an agreement with Premium Steel and Mines Limited (PSML) to revive and fully reactivate the former Delta Steel Company at Ovwian-Aladja in Delta State, with more than $1.3 billion committed to the project.

The agreement between the National Iron Ore Mining Company (NIOMCO), Itakpe, and PSML is expected to provide the framework for the rehabilitation and modernisation of the long-dormant integrated steel plant.

Under the agreement, PSML will invest more than $1.3 billion in raw-material exploration and exploitation, as well as the rehabilitation and modernisation of the steel plant.

The company is expected to restore the facility to its installed capacity of one million tonnes of liquid steel annually, with commercial operations targeted within 18 to 24 months, subject to the availability of sustainable iron-ore supplies.

The development is being positioned by the Federal Government as a major step toward rebuilding Nigeria’s steel industry and reducing the country’s dependence on imported steel products.

Minister of Steel Development, Prince Shuaibu Abubakar Audu, said the revival was consistent with President Bola Ahmed Tinubu’s Renewed Hope Agenda and the administration’s efforts to strengthen local manufacturing, create jobs and expand Nigeria’s industrial capacity.

According to the ministry, the project is expected to create about 5,000 direct jobs and more than 20,000 indirect jobs.

It is also expected to contribute to Nigeria’s target of producing 10 million tonnes of liquid steel annually by 2030.

A key component of the agreement is securing access to iron ore and other raw materials required for sustainable production.

The government said the project would support the reactivation of NIOMCO in Itakpe and facilitate the development of the Ajabanoko iron ore deposits, helping to establish a more reliable supply chain for the Delta Steel plant.

The revival is also expected to increase freight movement along the Central Rail Line and boost utilisation of the Delta Steel Company jetty, potentially strengthening connections between mining areas, the steel plant and industrial consumers.

The Delta Steel plant was commissioned in 1982 as an integrated steel facility with an installed capacity of one million tonnes of liquid steel per year.

However, the plant struggled to operate at its designed capacity and eventually ceased functioning as an integrated steel plant.

The Federal Government subsequently pursued privatisation as part of efforts to attract private capital for the facility. The asset was privatised in 2005 and later sold by the Asset Management Corporation of Nigeria (AMCON) to Premium Steel and Mines Limited in 2015.

The plant has remained largely inactive since 2015, making the latest agreement one of the most significant attempts in years to restore its original industrial role.

The Federal Government said the latest arrangement must translate into actual mine development, plant rehabilitation, commercial production and sustainable employment within the agreed timeframe.

For Nigeria, a successful revival of Delta Steel could strengthen domestic steel production, support construction and manufacturing industries, reduce pressure on foreign exchange used for steel imports and advance the country’s broader industrialisation ambitions.

The government and PSML will now face the challenge of turning the investment commitment into actual production, with reliable iron-ore supply, power, infrastructure and logistics expected to be critical to the project’s success.