Ajaokuta — The Beginning by Feyi fawehinmi

Ajaokuta — The Beginning by Feyi fawehinmi

As you’ve probably seen in the news, steelmaking in Britain is facing an existential crisis. After losing about £5bn in total, TATA are understandably fed up and have now thrown in the towel.

There are many reasons why this is the case but ultimately, the current price of steel in the market just doesn’t support steel making for a lot of countries.

Anyway, 3 years ago, I wrote about Ajaokuta and how the main issue was a technological problem — the blast furnace technology. Here’s the FT today:

“A blast furnace also represents a huge overhead cost because, once fired up, it typically runs for six to 10 years, giving an operator little flexibility. If it is shut down prematurely, cooling damages the brick lining”

A funny story I heard some years ago was that some manager at Ajaokuta turned off the blast furnace one time because it was wasting energy or something. And…well, you know the rest.
Today, I was roaming the internet and stumbled on a very interesting report that details the origin of Ajaokuta and how it came to be. The report itself, written in 1988, is here. But here’s the part that jumped out at me immediately:

Ajaokuta — The Beginning by Feyi fawehinmiAjaokuta — The Beginning by Feyi fawehinmi
Read the whole report if you can (you can jump to page 25 where it starts to get interesting). It’s quite fascinating and perhaps unsurprising that the thing is the giant white elephant that it is today. Read it as a story of Nigeria and not so much about steel.

Here’s one other part:

Ajaokuta — The Beginning by Feyi fawehinmi

It appears Nigeria trained engineers to work on the plant in India while trying to build the plant based on Soviet technology. The whole thing was a mess as the Soviets weren’t familiar with the technology that the Indian trained Nigerians demanded in the design.

It reminded me of the story of how the South Koreans built POSCO as narrated by Joe Studwell in How Asia Works:

Ajaokuta — The Beginning by Feyi fawehinmi

Such is life.

by Feyi Fawehinmi

Feyi Fawehinmi is an Accountant | Amateur Economist | Wannabe Photographer | Blog — aguntasolo.com | Tweets @doubleeph | Take the current when it serves or lose your ventures


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