The Federal Ministry of Ferrous Metallurgy Development of Nigeria has announced the signing of an agreement aimed at reviving the former Delta Steel company, which currently operates as Premium Steel and Mines Limited (PSML), in Ovwian Alaj, Delta State..
PSML plans to start commercial production within two years
The sublease and operation agreement signed between the National Iron Ore Mining Company (NIOMCO) and PSML is aimed at ensuring stable iron ore supplies for the integrated steel complex.
Under the agreement, PSML has committed to invest more than $1.3 billion in the exploration of raw materials, the development of the mine, as well as in the reconstruction and modernization of the plant. The company plans to start commercial operation within 18-24 months and bring the complex to its design capacity of one million tons of liquid steel per year.
Commissioned in 1982, Delta Steel operated at approximately 25 percent of its design capacity before encountering prolonged operational difficulties. Although the rolling mill of the plant was subsequently rebuilt, the enterprise has not functioned as an integrated steel mill since it was acquired by PSML in 2015.
Project in support of NIOMCO and Nigeria's steel production target by 2030
The project is also expected to support the resumption of NIOMCO operations and the development of the Ajabanoko iron ore deposits, while increasing freight traffic on the Central Railway Line and using the Delta Steel jetty berth.
According to the ministry, investments can create about 5,000 direct and more than 20,000 indirect jobs. The rebuilt plant will also contribute to Nigeria's goal of increasing annual liquid steel production capacity to 10 million tons by 2030.
However, the timetable for the resumption of work still depends on the availability of iron ore, reliable power supply, logistical infrastructure and completion of the necessary work to restore the plant.
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