Maluku Steel : the Time is Now!
Congo`s Steel Industry is Ready to Pave the Future
by PD Lawton 14 May 2020
“The role of the Iron and Steel Industry in national industrialization is pre-eminent. This is because steel remains the basic raw material for a host of manufacturing activities and hence the material backbone for national economic development in general.”
The Forces Against Development
We are witnessing the breakdown of the Western liberal economic system as it shows itself to be nothing more than smoke and mirrors, the work of illusionists. It is a system that has kept most of Africa marinating in debt and under-development for the past several decades.
Across the continent, people are waking-up to realize the benefits of high-speed rail, not high-flying finance. The liberal /neoliberal illusionists may be able to create paper money that gets stuck in an ever-revolving door of IMF repayment schemes but their economic policies have proven incapable of building the physical economy.
Those illusionists in their ivory towers play with paper on the stock exchange. They don`t build tractor factories in Africa, high-speed railways or steel mills. And they teach their minions of economic hit men not to believe in such basic stuff.
Which is why, situated on the outskirts of the DRC`s capital city, Kinshasa, is a fully equipped steel plant which could be operating right now…. but isn`t.
image: Maluku`s administration building
Steel and the physical economy
A recent paper entitled `The Steel Industry : a Stimulus to National Development` by Nigerian metallurgical engineers, C Ocheri, OO Ajani, A Daniel and N Agbo, explains the pre-requisite of a steel industry as the basis for an industrialized economy.
“They [ steel industries] are basically strategic industries that serve the long term industrial needs of a nation through their unique role as feeder channels to myriads of other key establishments. No serious programme of industrialization can be contemplated without a strong steel base, at least a steel base that would grow with the visualized scope of general industrialization over a set period.”
“The Steel Industry will continue to serve as stimulus to national development and economy booster to industrial development of a country. The industry will serve as the backbone of industrialization of our great country, Nigeria if all the necessary parameters are put in place. The benefits of having a functional steel industry will translate to a functional country. It should also be noted that steel industry will contribute to all the facets of the economy, including the important role steel plays in economic development and growth.”
The Maluku Steel Plant was constructed in 1972. It shares history with its Nigerian counterpart, Ajaokuta, and countless potentially transformative projects across the continent. African leadership at the end of colonialism visualized an industrial Africa. Back then everyone understood that national development required manufacturing along with modern infrastructure and national electrification, all of which are related to the production of steel. It was also understood that these are of such paramount importance, especially energy production, that the State cannot afford not to invest.
It was presidents Kwame Nkrumah of Ghana and Abdel Nasser of Egypt who created the Organization of African Unity, whose primary function was to begin industrialization of all African states with immediate effect. Patrice Lumumba, D.R. Congo`s first elected Prime Minister shared their passion and warned:
“Political independence has no meaning if it is not accompanied by rapid economic and social development“. Speech at the All-African Conference in Leopoldville August, 1960
As the ideas of the OAU spread like wildfire continent wide, the imperial jack-boot was enforced. War was unleashed on Egypt following Nasser`s nationalization of the British-owned Suez Canal and London`s Foreign and Commonwealth Office sent out a memo demanding that the Ghanaian dragon ( Nkrumah) be slain while France floated fake currency in Guinea to undermine Sékou Touré`s government.
Africa was told that it must approach development gradually! More than half a century later and we are witness to the effects of the liberal economic system and its `Laissez-Faire` Free Trade system .
Authors, Ocheri, Ajani, Daniel and Agbo; come to the conclusion that at least in the case of Nigeria, we are witness to stolen decades:
“It should be noted that the steel industry was conceptualized as far back as 1958, because of the vital and strategic role of the steel industry in the transformation and reformation of the economy. If Nigeria ever desires to drop the toga of “underdeveloped economy” for that of “industrialized economy” catalyst and economy booster the industry must be completed and made operational. If the steel industry had been completed, commissioned and effectively operated thirty-four years ago as conceptualized in the vision of the initiators, Nigeria would have been a different country in terms of industrial and economic development today.”
They further state:
“The abandonment of the company [Ajaokuta] has contributed to the economy woes of the Nation.”
Maluku, a Symbol of Hope
Good news seldom comes out of the DRC. When Patrice Lumumba was assassinated in January 1961, after less than 1 year in office, his death extinguished not only the dream of national development and a modernized Congo. Having experienced what was unquestionably the most brutal colonial occupation in history under Belgian`s King Leopold II ; which led to mass scale depopulation, the Congolese nation continued to suffer . Lumumba had come to embody the light of hope at the end of hell. Was hope extinguished in the Congolese psyche the day he died?
Something beautiful is needed to stop the haemorrhaging of this country which has everything needed to become an economic colossus, a heart that has room for all Africans.
Having begun negotiations in 2010, Global ITCM procured the contract as administrator of Maluku Steel in 2012. Global ITCM is owned by Jack Morrison, an American business man and two Congolese associates, Jacky Kasanga and Jean-Marie Kalumba. As the company celebrated the signing of the contract, as it aired on national television , little did they expect what was to come.
Image: The fully equipped plant as of 2020
Jack Morrison first visited Kinshasa in 2005 with the objective of buying scrap metal which was to be found in great quantity across the country . The American entrepreneur quickly realized the potential being lost in the export of scrap to countries abroad. He asked the government of the time ” why aren`t you doing something with this, it`s crazy!”
An unhealthy situation still exists across the continent which keeps Africa a raw materials market for the rest of the world.It is an economic crime, which sees raw material exported only to be imported back into the country as a processed product at huge cost.
Until relatively recent changes, even South Africa had few mineral beneficiation laws that require at least some degree of processing prior to export.
Global ITCM developed a long term strategy in order to challenge the status quo. Global acquired the concession rights to iron ore with the planned opening of at least one mine to supply Maluku.
The DRC has a staggering 9 billion tonnes of iron ore, as yet untapped. The return on iron as compared to copper is low but steel compared to copper has an immeasurable value for the economy.
As authors Ocheri, Ajani, Daniel and Agbo write:
“Statistical evidence indicates that the production of raw steel is attended to by over twenty types of ancillary industries and associated economic activities: These do not include continuing research into the further development, utilization and adoption of raw materials resources and technology .”
The DRC is uniquely endowed with almost every conceivable mineral, including some which are not to be found anywhere else in the world in any quantity. Those, combined with the waters of the world`s second most powerful river, the Congo River, give this country more potential than any other.
Oil contracts are easy to sign. Building a steel industry requires much greater effort. As authors Ocheri, Ajani, Daniel and Agbo write, it is the technical advance required to make steel which drives the economy forward.
“There is no doubt that actualization of the Steel company will bring about technology transfer to the country. This will open a new vista for our technological take-off. It is expected that when the Steel Company becomes functional, foreign investors would be attracted to participate in the steel development. Indeed, nothing can expedite and actualize the much talked about technology transfer to developing countries especially Nigeria like the take-off of the Ajaokuta Steel Company Limited and other steel industries.”
With the contract signed in 2012, Global ITCM was ready to proceed.
As is the case with Ajaokuta Steel, Maluku in its current state stands as a symbol of everything that has gone wrong for Africa. Liberal economics, administered through the IMF, has filtered down to many in positions in power who can only think along the lines of a myopic quick buck in the casino economy.
“A lot of money has been sunk into the company. Almost all the past leaders of the country lack the long term vision and patriotic will to complete the company and operate the steel industry. Some of them have been further confused by the major steel powers and their international collaborators like the International Monetary Fund, the World Bank and World Trade Organization hence their lack-cluster approach to completing the steel company. For some of them, it is pure unmitigated greed. They simply want to steal the money needed for the company and this company is the necessary backbone for any form of sustainable national development for the country in the immediate and distant future.
According to a pioneering Nigerian Economist, the late Dr. Pius Okigbo, in a lecture delivered at Institute Management and Technology, Enugu in 1980, warned that “No country can claim to be industrialized if it does not develop metalworking industries: it must have its own steelmaking as the basis of the ferrous metal industry. The steel fabricating industries multiply beyond count. The key lies in the establishment of iron and steel industry as the basic unit of any serious industrial development.”
Global ITCM encountered an array of anti-development forces. It would appear that in the case of certain elements within the DRC, including those of ministerial positions, their purpose was to ensure that every conceivable delay and obstacle was put along the road to progress and thwart operations at Maluku.
Someone somewhere has been prepared to put a stop to the development of Congo`s steel industry, at any cost.
Twenty years ago, Kinshasa had vast quantities of scrap that should have been utilized at Maluku but certain actors from within the previous government cared only for their own interests . All the scrap has since been exported, a limited number of people have benefited and the DRC continues to import steel.
Image: conveyor belts on the factory floor
Global ITCM experienced more than flagrant theft of its raw material. A succession of events, seemingly unrelated at the time, placed numerous obstacles in the way of progress. This underhand campaign went on for years. Bureaucratic fulfilments that lasted months and left investors exasperated were multiple and became apparent as deliberate delaying manoeuvres.
The Italian engineering firm contracted by Global, had their technicians kidnapped and robbed. Unharmed but intimidated by the experience, they left Kinshasa without completing their work.
Global was hit by members of the previous administration intent on self-serving corruption in the form of bribes and shares in the company. Antagonistic practices only increased when such demands were refused.
All the while money spent by Global mounted up to a colossal sum. With the plant not operating, the situation became increasingly unsustainable.
By 2018 president of Global, Jack Morrison, nearly paid for the stresses with his life. He was left hospitalised, unable to walk and his health ruined by a stroke.
Looking back on what has cost him so dearly he says:
“Something was taken that I truly believed in! I have come a long ways. I know that. But, I still have a long ways to go. One of the most important things that was taken away through someone else’s greed, was my health and the opportunity to make a difference in, not only my life, but in so many others.”
“I don`t have room for depression. I think I will have made a hell of a difference!”
The entrepreneur, despite everything is still fighting for this project.
“I want 500 people back at work – that`s it! ” Given that in the DRC a household can support as many as 10 people ; “that`s easy 5000 people with a better life “, Jack exclaims.
Image: SOSIDER accommodation
Before being bought by Global, Maluku was managed by The Iron and Steel Corporation Exploitation ( SOSIDER – Société Sidérurgique de Maluku), owned by the DRC government. SOSIDER encompasses corporate responsibility. Included in that are 2 schools which currently place around 2000 students, one hospital with 30 beds where 3 full-time doctors and 9 nurses treat an average of 150 to 200 patients daily. There are also 1305 staff houses .
Image: SOSIDER staff housing
The Way Forward
Maluku is fully equipped and powered. It can be operational tomorrow. There is 375,000 square foot of steel producing potential!
The plant`s energy requirements are already in place. Maluku has its very own power supply, all 300 miles of it, a direct line to the Inga Dam hydro-electric power plant.
The plant will initially produce rebar for concrete reinforcement essential for construction and infrastructure. Ironically the national infrastructure is currently so poor that it is not possible to transport scrap from other regions of the vast country to Kinshasa for processing.
Image: Steel billets
Initially the rebar will be have to be produced from imported billets of steel but procurement of Congo`s own iron ore will forego the need to import.
Jacky Kisanga , a partner in Global,says that Congo cannot afford not to have Maluku reopened. He is optimistic about the future:
“The mill has everything to offer the country. At the moment we import low quality rebar when we could be producing our own of a higher standard! This country is in the construction phase. Everywhere you look around Kinshasa building work is in progress. The government is funding 1000s of new homes.
We are constructing a bridge across the Congo River to connect Brazzaville and Kinshasa. It is an exciting, positive project! It is a joint venture between the governments of DRC and Republic of Congo. There is soon going to be a huge market for trade in Kinshasa!”
And he is right! Kinshasa will become one of, if not the, largest city, in Africa.
The government have already informed Global ITCM that the contract for Maluku has been re-started , having been on hold . Global are now looking for new investment.
As the saying goes `new brooms sweep clean ` . Felix Tshisekedi was elected Congo`s president in January 2019. Son of the late Etienne Tshisekedi, Congolese statesman and leader of the main opposition party, UDPS (L’Union pour la Démocratie et le Progrès Social ), the new president is intent on the development of a fully industrialized economy for the DRC.
He has taken on fighting corruption as one of his many important missions and has already imprisoned a prominent government minister for embezzelment. One of his first acts as president was to declare his intention of ending hostilities in the troubled eastern regions. He has appointed to the post a new minister, Claude Ibalanky , and requested further assistance of the United Nations. Peace and stability are the objectives and they will be achieved as President Tshisekedi opens the door to Congo`s future.
He and his new government are determined the DRC will become a steel producing nation.
USA – Jack Morrison : firstname.lastname@example.org
DRC – Jacky Kisanga : email@example.com
For all other enquiries:
UK – PD Lawton : firstname.lastname@example.org
The Steel Industry : a Stimulus to National Development` by C Ocheri, OO Ajani, A Daniel and N Agbo