The Federal Government has signed a Sub-lease and Operations Agreement with Premium Steel and Mines Limited (PSML) to revive and fully operationalise the moribund Delta Steel Company, Ovwian-Aladja, Delta State, with the company committing over $1.3 billion to the project.

The agreement, executed on Thursday between the National Iron Ore Mining Company (NIOMCO), Itakpe, and PSML, is expected to pave the way for the rehabilitation and modernisation of the steel plant and the resumption of integrated steel production.

The development is part of the Federal Government’s efforts to reposition Nigeria’s steel industry as a major driver of industrialisation, economic diversification, job creation and reduced dependence on imported steel products.

The Delta Steel Plant, commissioned in 1982 with an installed capacity of one million tonnes of liquid steel annually, was established as an integrated steel plant but operated at only about 25 per cent of its designed capacity before prolonged operational challenges forced its shutdown.

In 2005, the Federal Government privatised the company to Global Infrastructure Holdings Limited in an effort to attract private capital for its revival. The Asset Management Corporation of Nigeria subsequently sold the company to PSML in 2015 to recover unserviceable debts.

Since then, the plant has not operated as an integrated steel facility, a situation the administration of President Bola Ahmed Tinubu is seeking to reverse.

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Under the new agreement, PSML has committed more than $1.3 billion to raw material exploration and exploitation, rehabilitation and modernisation of the steel plant, with the aim of achieving full production capacity of one million metric tonnes of liquid steel annually.

The company has also pledged to reactivate the integrated steel plant and commence commercial operations within 18 to 24 months, subject to sustained iron ore supply.

Speaking on the agreement, Minister of Steel Development, Prince Shuaibu Abubakar Audu, said the revival of the Delta Steel Company was in line with President Tinubu’s Renewed Hope Agenda and efforts to strengthen local manufacturing and create employment opportunities.

Audu said, “The revival of Delta Steel Company is not merely about bringing an old industrial facility back to life. It is about restoring Nigeria’s capacity to produce steel locally, creating opportunities for our young people, supporting downstream industries and strengthening the foundation for sustainable industrialisation.”

He said the Federal Government would continue to work with credible private-sector investors to unlock Nigeria’s steel potential while ensuring access to raw materials, infrastructure, policy coordination and an enabling business environment.

The ministry identified reliable access to iron ore, particularly from NIOMCO, Itakpe, as well as dependable electricity, logistics and other supporting infrastructure as critical to the success of the project.

The project is expected to facilitate the reactivation of NIOMCO and development of the Ajabanoko iron ore deposits, while supporting the rehabilitation and commercial operation of PSML.

It is also projected to create about 5,000 direct and more than 20,000 indirect jobs, attract over $1.3 billion in investment and contribute to the Federal Government’s target of producing 10 million tonnes of liquid steel annually by 2030.

The revival is further expected to boost rail and maritime logistics through increased freight movement along the Central Rail Line and greater utilisation of the Delta Steel Company jetty.

The Federal Government, however, stressed that the agreement must result in actual mine development, plant rehabilitation, commercial steel production and sustainable employment within the agreed 18 to 24-month implementation period.

The Ministry of Steel Development commended the Ministries of Justice and Solid Minerals Development for their support and PSML for its commitment to reviving the strategic industrial asset.

The government said the initiative was aimed at transforming Nigeria into a competitive steel-producing nation capable of meeting a substantial proportion of domestic demand and becoming a major player in Africa’s steel and metals value chain.