Feasibility Report on Iron Ore Mining and Carbon Steel Production in Nigeria

Steel, the quintessential material of modern civilization, underpins everything from towering skyscrapers and intricate machinery to everyday appliances and vehicles. Its versatility, strength, and relative affordability have cemented its position as a cornerstone of industrial progress.

Steel is an alloy of iron and carbon, with varying amounts of other elements such as manganese, chromium, nickel, and vanadium. It is one of the most widely used materials in construction, manufacturing, and engineering due to its strength, durability, and versatility.

Steel is essential in industries such as automotive, construction, shipbuilding, energy, and consumer goods, making it a fundamental component of modern infrastructure and industrialization.

Steel is classified based on its composition and application. The primary types include:

Carbon Steel – Comprising about ninety percent (90%) of steel production, carbon steel contains varying levels of carbon and is widely used in construction and manufacturing.

Alloy Steel – Contains elements like chromium, molybdenum, and nickel to enhance specific properties such as corrosion resistance, strength, or heat resistance.

Stainless Steel – Known for its high resistance to corrosion due to chromium content, it is commonly used in kitchenware, medical instruments, and construction.

Tool Steel – Contains tungsten, molybdenum, and vanadium, making it ideal for cutting and drilling tools.

Structural Steel – Used in buildings, bridges, and infrastructure projects due to its load-bearing capabilities.

The global steel market was valued at USD 16.24 billion in 2024 and is expected to grow significantly, reaching USD 27.84 billion in 2025 and USD 53.48 billion by 2033, with a compound annual growth rate (CAGR) of eight point fifty percent (8.50%) during the forecast period (2025–2033). The rapid growth is driven by increasing urbanization, infrastructure development, and industrialization, particularly in emerging markets.

Several key trends are shaping the steel industry which includes

Urbanization and Infrastructure Development: The rising demand for housing, roads, bridges, and commercial structures fuels steel consumption globally.

Green and Sustainable Steel Production: Governments and industries are investing in eco-friendly steel production methods to reduce carbon emissions.

Technological Advancements: Innovations in steel processing, such as electric arc furnaces and hydrogen-based reduction, enhance efficiency and sustainability.

Automotive and Manufacturing Growth: The expansion of the automotive and heavy machinery sectors continues to drive demand for specialized steel grades.

Supply Chain Disruptions: Geopolitical tensions and trade restrictions impact raw material availability and pricing.

The global steel industry is concentrated among major producers, notably ArcelorMittal, China Baowu Steel Group, Nippon Steel Corporation, POSCO, Tata Steel, JFE Holdings, Shougang Group, HBIS Group, and Hyundai Steel, all of which wield substantial influence over market dynamics.

Steel production in Nigeria dates back to the 1950s when efforts were made to establish local steel manufacturing capabilities. The Ajaokuta Steel Company Limited (ASCL), founded in the late 1970s, was intended to be the backbone of Nigeria’s industrialization.

However, due to mismanagement, inadequate funding, and inconsistent government policies, the facility has yet to reach full production capacity. Other steel companies have since emerged to fill the gap, though Nigeria remains highly dependent on steel imports.

Nigeria’s steel market is experiencing substantial growth, driven by urbanization, population increase, and infrastructure development. The country has an estimated annual steel consumption of nearly ten million (10,000,000) tons, a significant portion of which is imported. The construction and oil & gas sectors are major consumers of steel products, underscoring the need for increased local production.

Nigeria’s domestic steel production is supported by a number of key manufacturers. Among them, Quantum Steels Nigeria Ltd. stands out as a leading producer of high-quality steel bars and rods.

African Steel Mills (Nig) Limited contributes a diverse range of products, including rebars and wire rods, while Emeife Industries Limited specializes in steel pipes and industrial materials. Fortunate Steel & Industrial Materials Company focuses on manufacturing steel for both construction and industrial applications.

Hongxing Steel Company produces a variety of steel products for local and regional markets, and Kam Industries is a major player in the production of galvanized steel and roofing sheets.

Despite their presence, these companies do not meet the nation’s total demand, leading to high import dependency.

The Nigerian steel industry faces several challenges, including:

High Import Dependency: Despite local production efforts, over 60% of steel used is imported, straining foreign exchange reserves.

Infrastructural Deficiencies: Poor electricity supply, outdated facilities, and weak transportation networks hinder production efficiency.

Inconsistent Government Policies: Policy instability discourages long-term investments in the sector.

Funding Limitations: Access to capital is a significant barrier for steel producers looking to expand operations.

Raw Material Constraints: While Nigeria has abundant iron ore deposits, inadequate mining infrastructure limits domestic supply.

Market Competition: Imported steel from China, India, and Europe is often cheaper than locally produced steel, affecting competitiveness.

Despite these challenges, Nigeria’s steel industry holds significant growth potential, driven by:

Increased Government Support: Policies aimed at reducing import dependency and promoting local production are being implemented.

Infrastructure Investments: Road, railway, and housing projects are expected to boost steel demand.

Public-Private Partnerships (PPP): Collaborations between the government and private investors can enhance production capabilities.

Technological Advancements: Adoption of modern steel manufacturing technologies can improve efficiency and output.

Regional Market Expansion: With the African Continental Free Trade Agreement (AfCFTA), Nigerian steel producers can access broader markets within Africa.

The Nigerian steel industry plays a critical role in economic growth and industrialization. While challenges such as high import dependency and inadequate infrastructure persist, strategic investments, policy stability, and increased local production capacity can transform the sector into a self-sufficient and globally competitive industry.

Table of Contents

EXECUTIVE SUMMARY 1.0 Business Overview 1.1 Description of the Business 1.2 Core Values, Vision and Mission Statement 1.3 Value Proposition 1.4 Obtaining a Mining Permit in Nigeria and Associated fees 1.5 Occurrence and Distribution of Iron Ore in Nigeria 1.6 Critical Success Factor of the Business 1.7 Current Status of Business 1.8 Description of the Business Industry 1.9 Contribution to Local and National Economy 2. Marketing Plan 2.1 Description of the Product 2.2 Product Packaging and Delivery 2.3 The Opportunity 2.4 Pricing Strategy 2.5 Target Market 2.6 Distribution and Delivery Strategy 2.7 Promotional Strategy 2.8 Competition 3. Production Plan 3.1 Description of the Location 3.2 Raw Materials 3.3 Production Equipment 3.4 Production Process 3.5 Production Cost 3.6 Stock Control Process 3.7 Pre-Operating Activities and Expenses 3.7.1 Operating Activities and Expenses 3.8 Project Implementation Schedule 4.0 Organizational and Management Plan 4.1 Company Profile and Ownership Structure 4.2 Profile of the Promoters 4.3 Management and Governance 4.3.2 Management Support Units 4.4 Details of Salary Schedule 5. Financial Plan 5.1 Financial Assumption 5.2 Start - Up Capital Estimation 5.3 Source of Capital 5.4 Security of Loan 5.5 Loan Repayment Plan 5.6 Profit and Loss Analysis 5.7 Cash Flow Statement 5.8 Viability Analysis 5.9 Net Book Value (NBV) 5.10 Statement of Financial Position 5.11 Investor Returns Analysis 5.12 Investment Consideration 6.0 Business Risk and Mitigation Factors 6.1 Business Risks 6.2 SWOT Analysis

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