Lagos, Nigeria (Haaba) - The Nigerian government has approved a total of N650 million for the re-opening of the Ajaokuta Steel Company Limited (ASCL) and the National Iron Ore Mining Company (NIOMCO), Itakpe - both in Kogi State.

The Minister of Mining and Steel Development, Mrs. Diezani Alison-Madueke, who made this known to journalists yesterday in Abuja, said the money is to be used to resuscitate and re-operationalise some of the completed units of the two entities.

The units to be re-started at this stage include the section of the thermal power plant, the light section rolling mill, the wire rod mill and the engineering workshops. Mrs Madueke said the Bergeaud plant as well as minimal mining operations and processing are also to be re-operationalised under the arrangement.

"After a series of consultations and communication with the Presidency on the ministry's proposal on the way forward for the two entities, I am happy to report to you today that the Acting President has graciously approved the ministry's request to re-operationalise both entities, prior to privatisation.

It is the ministry's plan, therefore, to ensure that both entities commence operations, not later than the end of second quarter of this year. For the entities to remain afloat, we need approximately N650 million at this time. This is to get it moving and to ensure that it is running smoothly. The amount covers only operational costs, excluding of course the cost of salaries of workers which have already been built into the 2010 budget appropriation," she highlighted.

She said the rehabilitation of the entire departments of the steel mill would take much greater investment to achieve. "It will need the involvement of a joint venture partner to be able to move to that level. When we have seen how the plants are effectively run by the end of 2010, then we continue planning for 2011 and other subsequent years," she said.

The Federal Government had ordered the cancellation of the concession contract with the Global Infrastructures Limited but the Indian felt aggrieved and has taken Nigeria to the Arbitration Court in London.

On the cancellation of the concession contract with the company which was ordered in 2008, the minister said government took the decision based on the outcome of an investigative panel that looked into the operations of the steel company.

The government said it had so far spent a total of $6 billion on the Ajaokuta plant since its inception in 1979.

The government considers as the most critical and of economic importance the opportunity to use the entities as a means of promoting industrialisation, job creation, wealth generation, economic diversification and import substitution.

The minister said the government also considered the social implications of allowing the lay-off of close to 5,000 personnel and those on indirect employment to the tune of over 20,000 persons.