Nigeria has taken a significant step towards reviving its dormant aluminium smelter in Akwa Ibom with the signing of a $1.2 billion agreement with Chinese state-owned engineering firm, CNCEC.
According to a report by Reuters, Mr. Epkerikpe Ekpo, the Minister of Petroleum Resources (gas), disclosed the deal on Monday with the aim of revitalizing the 135 million standard cubic feet per day gas processing plant at the Aluminium Smelter Company of Nigeria (ALSCON).
The contract, signed with BFI Group, the core investor in ALSCON, marks a crucial milestone in restarting the smelter after years of inactivity due to legal disputes and financial challenges.
Once operational, the plant is projected to produce one million tons of aluminium annually and generate up to 540 megawatts of electricity, contributing significantly to Nigeria’s industrial and energy sectors.
The plant’s revival will enable Nigeria to develop various stages of aluminium production, positioning the nation as a leading aluminium producer in Africa and on the global stage.
The development is expected to create jobs, stimulate economic growth, and reduce reliance on imported aluminium products.
ALSCON’s Managing Director, Dmitriy Zaviyalov, had earlier revealed that restarting the plant would require a $500 million investment.
The funds will be allocated towards revitalizing dormant equipment and acquiring power-generating sets to address energy challenges.
During a visit to President Bola Tinubu, ALSCON Chairman Alexey Arnautov emphasized that deploying $500 million within a defined timeline could significantly improve the company’s operations and contribute to Nigeria’s industrial growth.
Established in 1997, the Aluminium Smelter Company of Nigeria ceased operations in 2000.
In 2007, United Company RUSAL (UC RUSAL), a Russian conglomerate, acquired an 85 percent stake in the plant, leaving the Nigerian government with the remaining shares.
After acquiring ALSCON, RUSAL undertook modernization efforts, boosting the facility’s annual production capacity to 193,000 tonnes of aluminium.
However, the unreliable gas supply led to the suspension of operations in March 2013.
Despite various government initiatives to restore operations, progress has been limited.
In July 2023, Vice President Kashim Shettima engaged UC RUSAL and other stakeholders during the Russia-Africa Summit to deliberate on reactivating the plant.
The recent agreement with CNCEC marks a significant breakthrough in Nigeria’s efforts to revive its aluminium industry.
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