The Federal Ministry of Steel Development has signed an agreement with Premium Steel and Mines Limited (PSML) aimed at reviving and fully operationalising the former Delta Steel Company at Ovwian-Aladja in Delta State. The agreement is part of the Federal Government’s broader strategy to reposition Nigeria’s steel industry as a major driver of industrialisation, economic diversification and job creation.
Under the agreement, PSML has committed more than US$1.3 billion towards the rehabilitation and modernisation of the steel plant, as well as the exploration and exploitation of raw materials required to sustain production. The investment is expected to address one of the major challenges that has historically affected the plant reliable access to iron ore and other critical raw materials.
The agreement was structured through a Sub-lease and Operations Agreement involving the National Iron Ore Mining Company (NIOMCO), Itakpe, and PSML. The arrangement is intended to provide the framework required for the rehabilitation, operation and long-term sustainability of the integrated steel facility.
The Delta Steel Company, commissioned in 1982, has an installed production capacity of approximately one million tonnes of liquid steel annually. However, the facility experienced prolonged operational difficulties and eventually became largely inactive. The new investment programme is expected to restore the plant to its installed capacity and return it to commercial production within approximately 18 to 24 months, subject to sustained iron ore supply.
The revival is expected to generate significant economic benefits through increased domestic steel production, reduced dependence on imported steel products and the development of local industrial supply chains. A functional integrated steel plant could provide essential inputs for construction, manufacturing, engineering, automotive production, infrastructure and other industrial activities.
The project is also expected to stimulate activity beyond the steel plant itself. Increased production would create demand for mining, transportation, engineering, logistics and other supporting services. The government expects the development to contribute to employment generation and broader economic activity in Delta State and other parts of the country.
Another important component of the project is its potential impact on transportation infrastructure. The renewed operation of the plant is expected to increase freight movement along the Central Rail Line and improve utilisation of the Delta Steel Company jetty, creating stronger connections between raw-material sources, manufacturing facilities and domestic markets.
The Federal Government sees the revival of Delta Steel as part of a wider effort to rebuild Nigeria’s domestic industrial base. Developing a competitive steel industry is particularly important because steel is a foundational input for infrastructure and manufacturing, and increased local production could reduce pressure on foreign exchange associated with steel imports.
For investors, the project creates potential opportunities across the wider mining, metals, infrastructure, logistics, engineering and manufacturing value chains. The combination of a large-scale capital commitment and government support for raw-material supply could also encourage additional private-sector investment around the steel ecosystem.
The success of the initiative, however, will depend heavily on the reliable supply of iron ore, effective rehabilitation of the plant, operational efficiency and sustained policy support. The government’s agreement with PSML therefore represents an important first step, but consistent execution will be critical to converting the US$1.3 billion commitment into sustained commercial steel production.
