By Engr. Anthony Madagua
I borrowed the title of this article from Chapter 10 of my book” The Betrayal of the Nigerian Steel Dream-Delta Steel Saga” published in 2013. That chapter 10 started with a teaser that states “Merchandising, commerce without manufacturing will not take the people out of poverty and cannot bring prosperity to the nation”. The book generally discussed the rise and fall of the Nigerian Steel dream epitomized by the total collapse of the Delta Steel Company Ovwian-Aladja in Delta State, the role of the various stakeholders, how feasible is it to develop a nation without steel and the way forward citing examples from India, Turkey, Iran etc.
Delta Steel Company was the first integrated steel plant completed, commissioned and operated in Nigeria and the sub-Saharan Africa with an installed capacity of 1million tons per annum of various light steel products. The steel plant whose construction started in 1979 was commissioned on schedule in 1983. The plant is expandable to 2.5 million tons per annum to produce flat sheets. An integrated steel plantunlike mini steel plants and rolling mills has all the functions for primary steel production as all the major facilities and the necessary ancillary facilities (from smelting of iron ore to rolled products) are located together in one place. While Nigeria has about 101 steel companies/plants, only two are integrated plants located at Ajaokuta and Ovwian-Aladja, though Ajaokuta is yet to be uncompleted. Integrated steel plant defines the technological capability for steel production of any nation and is the foundation upon which any virile steel industry thrives.
The well-thought plan to industrialize Nigeria through the establishments of these two integrated steel plants, the three inland rolling mills at Jos, Katsina and Oshogbo, the National Iron Mining Company at Itakpe, National Steel Raw Material Development Agency Kaduna and the National Metallurgical Development Centre Jos covered the entire value chain for the development and growth a virile steel industry, but was truncated by myriad of challenges largely instituted and festered by all stakeholders.
As a former CEO of the Delta Steel Company, I had believed and still believe that a company like the former Delta Steel had no business depending on government fully and based on this conviction, I embarked on repositioning the company by re-starting production activities which had stopped for about 6 years prior to my assumption of office. It was coincidental that the privatization of the steel plants was on and our effort was misinterpreted as attempt to truncate privatization. I recall my pleadings with the former President Olusegun Obasanjo GCFR to give my management the opportunity to reposition the company and more importantly that the privatization be treated with great caution as steel is a strategic to the development of any nation. I have followed closely the growth of state-owned integrated steel plants like POSCO South Korea, Hadded Saudi Arabia,Bhilai, Bokaro, Roukerla, Durgapur all in India, BaoSteelChina and the unique roles these plants played in the industrializationof their various countries. Unfortunately, we were completely misunderstood which we paid dearly for. It is worthy of mention that the performances of these steel plants and that of other state-owned enterprises like Aramco, Oil and Natural Gas Corporation India, Ethiopian Airlines, China Railways and many others featuring in Forbes Global Fortune Companies 500 and 2000 informed my second book titled “Who Says Government Has No Business in Business” published in 2015.
Fast forward, Delta Steel was privatized in February 2005 and by 2011, the plant was run aground by the core investor and the company had also accumulated over N40billion in local debt, even though the plant was purchased for N3.25 billion. This led AMCON to take the company into receivership in 2011. The steel plant was resold by AMCON in 2015. 10 years after this second sale by AMCON, the plant is yet to restart production. The three inland rolling mills at Jos, Katsina and Oshogbo also privatized in 2006 have remained closed down. Jos and Oshogbo were never operated since their privatization. Katsina was shut down shortly after privatization.
British Steel Scunthorpe isone of the UK’s premier steel plants, producing a variety of products including heavy plates, sections, and rails and it is UK’s only remaining primary steelmaking facility (integrated steel plant),following the closure of the last blast furnace at Port Talbot Steel works in Wales. The steel plant at Scunthorpe was acquired by Chinese Group Jingye in 2020 after series of privatization and ownership changes.
The UK government desirous of commencing migration to green steel production wanted the steel plants at Scunthorpe and Talbot to decommission the blast furnaces and transit to less emissions-intensive electric arc furnace technology which interestingly is the technology that is made to lie fallow at the Delta Steel Plant. Hence, the UK government just like it did at its Talbot Steel works under Tata Steel, its owner after privatization,also offered a grant of 500million pounds of public fund toJingye to help with the intended upgrade and keep the Scunthorpe steelworks operating. Jingye reportedly rejected this offer stating it was not enough to keep the site financially viable and wanted more than twice that amount, potentially up to 1 billion pounds, with few guarantees of keeping the plant open.
With the threat of imminent closure facing Scunthorpe Steelworksafter its Chinese owners Jingye halted orders of major raw materials such as coking coal and iron ore, the Members of Parliaments who have left for their Easter holidays on Tuesday 8, April2025 and were not due to return to Parliament until 22nd were recalled and had a rare Saturday12, April 2025 sitting to discuss the draft bill that will prevent the plant’s imminent closure with thousands of jobs at stake. The UK Prime Minster Keir Starmer said “The future of British Steel hangs in the balance” and this step “enables the UK government to preserve capability and ensure public safety,” After pushing the Steel Industry (Special Measures) Bill through both Houses in a matter of hours and also receiving royal assent, the UK government on Monday 14April, 2025, took the “landmark’ control of British Steel Scunthorpe.Without continued production and securing fresh supplies, the furnaces at Britain’s only source of virgin steel would be forced to close.
The UK government further took measures including deployment of the Royal Navy to escort a vital ‘cargo of coking coal’ shipment to Scunthorpe’s steelworks to avoid sudden stoppage of the blast furnaces amid allegations that Jingye was to divert and sell off this important steel making raw materials.
Chris McDonald, Labour MP for Stockton North and former chief executive of the UK’s steel innovation centre, told Members of Parliament that “global steel isn’t a free market – it’s shaped by state power”. The UK Prime Minister posited that the UK cannot afford to be the only member of G7 without capability to produce virgin steel. He further said “steel made in Britain “will be the backbone as we get Britain building once more,” adding: “Our industry is the pride of our history – and I want it to be our future, too.”
It is to be recalled that in January 2025, former President Joe Biden blocked a $14.3 billion acquisition of US Steel by Japan’s Nippon Steel saying “As I have said many times, steel production – and the steel workers who produce it – are the backbone of our nation. He further posited that “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.” President Donald Trump who also initially opposed the acquisition on Monday 7 April 2025 ordered the Committee on Foreign Investment to review the deal to assist “in determining whether further action in this matter may be appropriate,” and recommend on whether measures suggested by U.S. Steel and Nippon “are sufficient to mitigate any national security risks.
These recent happeningsshow the extent countries go to ensure their steel production capability is sustained, clearly underscoring theuniversally acclaimed mantra that steel is the bedrock of industrialization.
Lessons to be learnt.
- Just like the UK government averted the loss of steel production capability in the UK, the Federal government of Nigeria must do likewise if Nigeria must aspire to develop and industrialize. Ironically, the consulting firm to the BPE on review and formulation of a national policy for the metal sector in August 2003 had posited that “the steel industry does not necessarily be strategic or special to a nation and It does not matter whether you make steel or import it as long as supply is reliable and cheap”. The seminar which took place on 14th August 2003 had in attendance erudite scholar Dr. Sanusi A. Mohammed Secretary General African Iron and Steel Association who opposed this position.
- Taking a cue from the United States of America, the Federal government of Nigeria must keep a tab on the steel industry just as it is doing for the petroleum and the financial sectors of the economy. Government must have business in business as a means of developing, industrializing and creating wealth for its citizens. To avert the disastrous results usually associated with government agency, government must provide the necessary leadership in all its entrepreneurial endeavoursto achieve desired results similar to the Aramcos, China Railways, Ethiopian Airlines etc.
It is heartwarming that the Federal government of Nigeriaunder the Renewed Hope Agenda thought it wise to establish a stand-alone ministry for steel development. The new ministry hasgladly hit the ground running by putting in place strategic initiatives to move the steel sector forward. However, more pragmatic works still need to be cone but very critical ones should include:
-speedy completion and operationalization of Ajaokuta using any format that will guarantee sustainability and growth.
– re-operationalization of the former Delta Steel Company by engaging with the new owners to ensure that the objectives for establishing the company is not truncated or sabotaged.
– Re-operationalization of the three inland rolling mills to guarantee availability of semi-finished products for the downstream industries.
In conclusion, no nation has ever industrialized without a virile steel Industry; Nigeria cannot try to be an exception.
Engr. Anthony Madagua is a consultant and former MD of the Delta Steel Company.
