Nigeria’s federal government is in advanced talks to sign a roughly $2 billion agreement with a Chinese investor to revive the long-dormant Ajaokuta Steel Company before the end of 2026, under a production-sharing model rather than an outright sale. Built in 1984 with installed capacity of 1.3 million tonnes per year, the plant has never achieved full production due to decades of legal disputes, concession controversies and policy inconsistency. Under the sliding-scale structure being negotiated, the still-unnamed Chinese investor could initially take 60 to 70 percent of output as investment repayment, declining to zero over five to ten years. The Ministry of Steel Development says Ajaokuta needs $1.5 to $2 billion for revival and is explicitly seeking investors with the financial strength, technical expertise and track record to rehabilitate and operate the facility — with the core infrastructure assessed as viable despite obsolete equipment.
Project Details
Key Issues / Risks
Deal not yet signed; identity of Chinese investor undisclosed; decades of prior failed concessionaire deals and legal disputes create credibility risk; NIOMCO iron ore feedstock mine remains non-operational, creating a value-chain gap; some analysts argue the plant's blast-furnace technology is outdated versus modern DRI+EAF routes; government debt profile limits ability to offer sovereign guarantees.
Latest Development (Detail)
July 2026: Minister of Steel Development said government is on course to sign the agreement before end of 2026; a steel rolling mill could begin operations within six months of project launch per the investor's technical team.
What Happens Next
Signing of definitive investment agreement (targeted before end of 2026); mobilisation of rehabilitation works; resolution of NIOMCO feedstock supply.
Commercial Opportunity
Genuinely open opportunity for steel/heavy industry investors, equipment suppliers, engineering firms and co-financiers — government is explicitly still evaluating partners and structure ahead of a final signature, and additional capacity beyond the lead Chinese investor is likely needed.