FG, firm sign $400m deal to boost local steel production

Nigeria’s long-awaited steel revolution may finally be taking shape as the Federal Government on Wednesday announced the signing of a $400 million cooperation agreement with Stellar Steel Company Limited, a Chinese-backed firm, to establish a major steel plant in Ewekoro, Ogun State.

The deal, signed in Abuja between the Federal Ministry of Steel Development and Stellar Steel, marks one of the biggest foreign direct investment commitments in Nigeria’s steel sector in nearly a decade.

Backed by Chinese parent groups Galaxy Group and RSIN Group, both headquartered in Fuzhou, Fujian Province, the new plant is expected to commence operations by mid-2026.

A statement issued by the ministry’s Public Information Officer, Ijomah Opia, said the agreement was signed by the Minister of Steel Development, Prince Shuaibu Abubakar Audu, and the President of Inner Galaxy Group, Mr Li, on behalf of Stellar Steel.

The statement read, “The Federal Ministry of Steel Development has signed a Joint Strategic Cooperation Declaration with Stellar Steel Company Limited. Stellar Steel Company Limited is a steel-manufacturing enterprise established to operate in Nigeria, with major investment backing from Chinese parent groups: Galaxy Group and RSIN Group based in Fuzhou, Fujian Province, China.

“The company has committed approximately US$450 million for a steel plant project in Ogun State, Nigeria, scheduled to begin operations by mid-2026. This landmark partnership is aimed at revitalising Nigeria’s steel industry and reducing the nation’s dependence on imported steel products.”

The Minister of Steel Development, Abubakar Audu signed the agreement when he hosted Mr Li, President of Inner Galaxy Group and other members of the Stellar Steel Company Limited in the Ministry’s Headquarters in Abuja.

According to Audu, the collaboration aligns with the Federal Government’s goal of achieving 10 million tonnes of crude steel production per annum by 2030, a major step toward industrial self-reliance and economic diversification.

The Minister further stated that the Federal Ministry of Steel Development will facilitate policy and infrastructure support, including the inclusion of Stellar Steel’s logistics projects in the National Infrastructure Plan and access to available fiscal incentives.

The statement explained that the agreement will facilitate, “Development of a localised iron ore supply chain to reduce import dependence and save over $1bn in foreign exchange annually.

“Creation of more than 2,000 direct and 20,000 indirect jobs across the steel value chain. Promotion of green steel production using clean and energy-efficient technologies and strengthening Nigeria’s position as a regional steel manufacturing hub in West Africa”, it added.

Audu also stated that in return, Stellar Steel will prioritise local recruitment and training, partnering with Nigerian universities to build technical and managerial expertise in steel production.

On his part, Shuaibu emphasised that this strategic cooperation marks a new era for Nigeria’s steel industry and demonstrates the government’s commitment to sustainable industrial growth and economic transformation.

Responding, the leader of the delegation, Mr Li, assured the minister that Stellar Steel Company Limited will respect all agreements reached and will ensure the completion of the project in record time and assured that all safety standards will be observed.

Li was accompanied during the visit by the Vice Chairman of RSIN Group, You Xiastian; Vice President of Inner Galaxy Group,  Jackie Den and Mr Yin, Director of RSIN Group.

Li recalled that the minister had earlier performed the groundbreaking ceremony of the Ogun plant in April 2025.

Both parties reaffirmed that the partnership would strengthen Nigeria’s industrial base, create jobs, and promote technology transfer across the steel ecosystem.

Speaking at the signing, representatives of both parties emphasised that the partnership would strengthen Nigeria’s industrial base, create jobs, and foster technology transfer in the sector.

Nigeria’s steel story has long been defined by unfulfilled potential.

Despite possessing one of Africa’s largest iron ore deposits, the country still imports over $4 billion worth of steel products annually, with local production contributing less than 10 per cent of domestic demand.

The government hopes that projects like Stellar Steel’s Ewekoro plant will fill the void left by the moribund Ajaokuta Steel Complex, which has remained idle for decades despite billions of dollars in public investment.

Source: Punch