* Seeks to quadruple capacity to 5.6 million tonnes
* Deal would involve $6 billion upgrade
* Loans signed, including $500 mln for airport terminals
By Lucy Hornby
BEIJING, July 11 Chinese state-owned metals
trader Sinosteel is in talks to take over a state-owned steel
mill in Nigeria and expand its capacity to 5.6 millions tonnes
from 1.3 million, Nigeria's mining minister said on Thursday
during a visit to Beijing.
The steel mill sale and upgrade would mean investment into
Nigeria of around $6 billion, Minister of Mines and Steel
Development Musa Mohammed Sada told Reuters.
Sinosteel did not confirm or deny the talks when contacted.
Nigeria, Africa's largest crude oil producer, is looking to
China for cheap funding to help it move up the value chain from
exports of raw materials, a goal that has been hampered by
A delegation of over a dozen ministers led by President
Goodluck Jonathan is visiting China this week soliciting loans
for infrastructure that Finance Minister Ngozi Okonjo-Iweala
said last week could amount to $3 billion.
"We have had discussions with Sinosteel... We would hope
they will be able to reach some agreement and transfer the
management to them," he said. The government holds 80 percent of
the mill, with the remainder held by employees and the local
Nigeria is delineating its iron ore deposits with a view to
opening bids by the end of the year, he added.
"We have a steel programme to produce steel within the
country, but the size of the deposits we have of iron ore is
more than what we can consume locally, so there is also (a need
for) infrastructure development," Sada said.
During the visit, China Ex-Im Bank agreed to lend $500
million to Nigeria to build airport terminals in Lagos, Abuja,
Port Harcourt and Kano. The 20-year loan is at a 2 percent
interest rate with a 30 percent local content provision,
Aviation Minister Stella Oduah said.
"It's free money, so we're happy," she said.
China, the world's most populous country and second-largest
economy, has made several cheap loans to African nations in the
past few years as it competes with Western powers like the
United States for access to the continent's abundant natural
resources and growing market for imported goods.
Nigeria is seeking Chinese help to develop petrochemicals,
metals smelting, roads and port infrastructure and even add
cold-storage capacity at airports for exports of fresh
agricultural products, to maintain economic growth that has
averaged 7 percent a year for the past five years - but which
economists say has been too dependent on crude oil.
China and Nigeria signed a framework agreement between the
China Development Bank and Nigeria's First Bank,
details of which were not provided, as well as accords covering
visas, cultural exchange and economic and technical cooperation.
The lending is part of a $7.9 billion external borrowing
plan approved by Nigeria's national assembly last year as the
government seeks to increase cheaper external borrowing and
limit domestic debt.
Chinese firms are already active in road-building, mining
and construction in Nigeria, all of which require more steel.
But a glut of steel capacity in China may make it more
economic to sell steel to Africa than to build new mills there.
(Editing by Tim Cocks and Tom Pfeiffer)