Nigeria EAF Steel Mill Equipment: Project Guide

A new electric arc furnace meltshop in Nigeria is a three-block buy: the EAF that melts scrap, the ladle furnace that refines the heat, and the continuous caster that turns liquid steel into billet. For a buyer planning greenfield melt capacity, three things decide whether the plant runs profitably or sits idle: the equipment scope, the power dependency, and the scrap supply.

Why Nigeria is buying meltshop equipment now

Nigeria produces roughly 1.2 million tonnes of steel a year against demand near 10 million tonnes, and the import bill runs over $4 billion in foreign exchange annually, per the Federal Ministry of Steel Development. That gap is the whole reason a new meltshop pencils out. At the August 2025 National Steel Summit, Vice President Kashim Shettima said Nigeria aims to produce 10 million tonnes of liquid steel annually by 2030, a private-sector-led programme the government expects to create over 500,000 direct and indirect jobs, as reported by Vanguard. The Federal Ministry of Steel Development is auditing legacy assets like Ajaokuta and Delta Steel (now Premium Steel and Mines) for restart alongside new builds.

The route there is scrap-based steelmaking through the electric arc furnace. The current ~1.2 Mt is produced mostly by scrap-fed EAFs, per the Ecofin Agency, because an EAF mini-mill costs a fraction of an integrated blast-furnace complex and commissions in 18 to 30 months rather than the better part of a decade. This guide is for the buyer side: the sponsor, engineering lead, or procurement manager scoping a meltshop and preparing to issue RFQs to international furnace OEMs.

The meltshop scope: what you are actually buying

A meltshop is a connected line, not one machine, so the RFQ has to specify each block plus the interfaces between them. Get the boundaries wrong and you end up with three vendors blaming each other on the commissioning floor.

The electric arc furnace

The EAF is the heart of the plant. A modern unit melts scrap (and sometimes direct-reduced iron) using graphite electrodes that strike an arc at thousands of degrees. The scope covers the furnace shell and roof, the tilting platform, the electrode arms and regulation system, the water-cooled panels, the off-gas and fume-extraction train, and the furnace transformer, the single most expensive long-lead item in the package. Sizing is the first decision: a 30-tonne to 50-tonne tap-weight furnace suits a mill targeting 300,000 to 600,000 tonnes a year of long products, the band most Nigerian indigenous projects sit in. Transformer rating, tap-to-tap time, and product mix all flow from tap weight, so fix it first.

The ladle furnace and secondary metallurgy

Liquid steel leaving the EAF is not ready to cast. The ladle furnace reheats and refines it, trimming the chemistry, raising the temperature, and homogenising the heat so the caster gets a consistent feed. For rebar and basic sections, a single ladle furnace is usually enough; for tighter grades you add wire-feeding, argon stirring, and sometimes vacuum degassing. Specify the metallurgy you need today and the connection points for what you might add later, because retrofitting it into a cramped bay is painful.

The continuous caster

The continuous caster solidifies liquid steel into billet, the semi-finished product that feeds a rolling mill. For the Nigerian long-product market, a billet caster with three to six strands is the standard buy, covering the tundish, the moulds and oscillation system, secondary cooling and withdrawal, cutting torches, and the cooling beds. Strand count and section size must match both the EAF tap rate and the downstream rolling mill, so the caster cannot be specified in isolation. Our guide to hot rolling mill equipment suppliers in Nigeria covers where billet feeds next.

Around these three core blocks sit the auxiliaries that decide whether the meltshop runs: the scrap yard and charging cranes, water treatment, the dedusting bag-house, the level-2 automation that ties furnace, ladle, and caster into one control logic, and the substation that steps grid power down to furnace voltage. First-time sponsors routinely under-scope these, and they are exactly where commissioning delays hide.

The power-supply reality you cannot ignore

This sinks more Nigerian plants than any furnace specification. An electric arc furnace is an enormous, spiky electrical load: a 40-tonne furnace can draw 30 to 40 megawatts in bursts during melt-down, and the Nigerian grid does not reliably deliver that to most industrial sites. The transmission build-out is anchored by the Presidential Power Initiative with Siemens, a roughly $2.3 billion Phase 1 programme to add about 7,000 MW to the grid, as covered by Businessday, but that does not yet mean firm, high-quality power at every industrial estate.

So almost every serious Nigerian EAF project budgets for captive power, usually gas-fired generation sized to carry the furnace load, with grid power as backup rather than the primary feed. The captive plant can rival the meltshop itself in capex, and it must be specified in parallel because the furnace transformer and the generation set have to be electrically compatible. Scope the EAF without scoping the power island and you get a furnace that cannot run at rated output. Mills cluster where gas and grid access are best: the Lagos-Ogun corridor, the Niger Delta near Ovwian-Aladja, and the Kwara base. Our Nigeria energy infrastructure guide covers how power shapes industrial siting.

Scrap feed: the input that decides plant economics

An EAF eats scrap, and Nigeria’s scrap market makes or breaks the business case. African Industries Group operates what it describes as the largest shredder in sub-Saharan Africa, a signal of how central scrap processing is to the indigenous model. Domestic collection is informal and fragmented, ferrous quality varies, and a meltshop that cannot secure a steady charge runs below capacity no matter how good the furnace is.

Two things follow for the buyer. First, the scrap yard, shredder or shear, and magnet-and-grab cranes are part of the project scope, not a separate problem to solve after commissioning, and the charging system and off-gas train have to tolerate the contamination and moisture in mixed local scrap. Second, sponsors planning long term often pair the EAF with a direct-reduced iron (DRI) stream to dilute scrap-quality risk, which is why Nigeria’s iron-ore ambition at Itakpe matters even to a nominally scrap-based plant. The DRI and pelletizing side is a distinct line covered in our DRI and pelletizing plant guide for Nigeria.

The named buyers and projects

The Nigerian meltshop buyer set is small and nameable, which makes targeted procurement engagement possible. African Industries Group (AIG) is the largest integrated player, running multiple plants with capacity around 1.2 million tonnes a year and a $600 million iron ore mine in Kaduna behind its push toward a full iron-ore-to-steel route, as covered by Leadership. KAM Holding in Kwara State runs an EAF line producing around 600,000 tonnes a year of liquid steel, per its own corporate materials. Premium Steel & Mines at Ovwian-Aladja, the former Delta Steel complex, is a brownfield DRI-EAF restart targeting 1 million tonnes of liquid steel and reportedly needing around $220 million to reach full operation, per Businessday, meaning replacement furnaces, casters, refractories, and automation across the whole flow.

Newer builds extend the list: the Federal Ministry of Steel Development has flagged a $400 million Stellar Steel plant in Ogun State, and integrated-steel sponsors such as SONNEX feed the pipeline the 10-Mt-by-2030 plan depends on. Each is a meltshop-equipment RFQ in waiting. For the full sector picture, this guide sits under the Nigeria steel and metal fabrication guide.

How an EAF meltshop project phases

Sponsors who treat the meltshop as one giant purchase order usually stall. The projects that move break the capex into phases:

Phase 1, power island and civils. Secure gas supply or grid capacity, build the substation and captive-power plant, pour the meltshop bay foundations. Nothing else commissions until power is firm.

Phase 2, the core meltshop. Order the long-lead items first, because the furnace transformer and EAF shell can carry lead times of 12 months or more. Then the ladle furnace, then the caster, sequenced so it arrives ready to tie into a tested furnace.

Phase 3, scrap and auxiliary systems. Scrap yard, shredder or shear, water treatment, dedusting, and automation, procured in parallel with Phase 2 but commissioned before hot trials.

Phase 4, ramp-up. Hot commissioning, heat trials, caster start-up, and the climb to rated output as the scrap chain and operating crew mature.

On budgeting, public industry data puts a new EAF mini-mill in the $300 to $500 million range depending on capacity and scope. For a per-tonne check, SteelOnTheNet lists average capital costs of roughly $143 per tonne of annual capacity for an EAF and about $85 per tonne for a billet caster (2018 basis), on top of which you add ladle metallurgy, captive power, scrap handling, and Nigerian site civils. Treat these as indicative planning ranges, not quotations; the only firm number comes from a vendor against your tonnage, product mix, and site, which is exactly why a clean RFQ matters.

On financing, external reserves crossed $50 billion in early 2026 per the World Bank’s Nigeria overview, and the post-2023 reforms in the US Department of State 2025 Investment Climate Statement mean FX for machinery imports is far less of a blocker than it was. Most meltshop capex is paid through confirmed letters of credit from Tier-1 Nigerian banks, often strengthened with export-credit-agency cover from the supplier’s home market. The deeper FX, local-content, and procurement mechanics are covered in our Nigeria steel and metal fabrication guide.

Conventional channels that are losing steam

The old way an OEM reached a Nigerian meltshop buyer, fly in for a trade fair, appoint a distributor, post a rep to Lagos, still works in patches, but the economics have tightened.

Trade fairs. The West Africa Industrialisation, Manufacturing & Trade exhibition in Lagos and the Nigeria Manufacturing & Equipment expo gather genuine buyers, but a capital-equipment stand with booth, freight, hospitality, and senior-engineer time lands at $20,000 to $80,000, and per-qualified-lead cost realistically sits at $300 to $900 or more. Buyer density for heavy meltshop kit thins as the fairs broaden toward general manufacturing.

Field sales representatives. A senior expat rep posted to Lagos, fully loaded with housing, schooling, hardship allowance, and security, runs $300,000 to $500,000 a year; even a strong Nigerian sales engineer runs $80,000 to $150,000. One rep covers one or two mills. Per-qualified-lead cost lands in the $500 to $1,200+ band, and it does not scale across a buyer set spread from Kwara to Delta to Ogun.

Distributor and trading-house lock-in. OEMs historically reached mills through Apapa and Onne trading houses, but margin erosion is real, and the largest mills now prefer direct OEM relationships with a local agent on after-sales rather than a distributor markup on a multi-million-dollar furnace order. Embassy trade missions open doors at the executive level but produce introductions, not purchase orders. The takeaway for a buyer is the mirror image: the OEM that wins your RFQ is rarely the one with the flashiest booth, but the one that engaged your engineering team early and quoted a scope that ties together.

Get your meltshop specification in front of the right OEMs

If you are scoping an EAF meltshop in Nigeria and want a clean, vendor-neutral procurement process, send us your project parameters: target tonnage, product mix (rebar, sections, billet for sale), power situation (grid, captive gas, or both), scrap versus DRI feed plan, and site location. Contact us and we will route your spec to qualified international furnace, ladle, and caster OEMs and keep the RFQ organised so you get comparable bids rather than three incompatible proposals. For direct procurement enquiries, email burak@papaverai.com.

This is the same engine that helps equipment suppliers reach buyers like you. A qualified procurement connection costs $150 to $300 to surface through it, against the $300 to $900+ of a trade-fair lead or the $500 to $1,200+ of a field rep, and the cost compounds downward as the engine learns the market rather than scaling linearly. See how it works.

FAQ

What equipment does a basic EAF meltshop in Nigeria need? Three core blocks plus auxiliaries: an electric arc furnace (with its transformer, electrode system, and fume extraction), a ladle furnace for secondary metallurgy, and a continuous billet caster. Around them sit the scrap yard and charging cranes, water treatment, dedusting, level-2 automation, and a substation or captive-power island sized to carry the furnace load.

How much does an EAF mini-mill cost to build in Nigeria? Public industry data puts a new EAF mini-mill in the $300 to $500 million range, with SteelOnTheNet listing roughly $143 per tonne of annual capacity for the EAF and $85 per tonne for a billet caster on a 2018 basis. These are indicative planning figures only; a firm number comes from a vendor quoting against your tonnage, product mix, captive-power needs, and site.

Why is power supply the biggest risk in a Nigerian EAF project? An EAF draws tens of megawatts in spiky bursts during melt-down, and the grid does not reliably deliver that to most sites despite the Siemens-backed Presidential Power Initiative adding capacity. Almost every serious meltshop budgets for captive gas-fired power sized to the furnace load. Scope the power island in parallel with the furnace, never after it.

Is scrap or DRI the right feed for a Nigerian EAF? Scrap is the dominant and cheapest route today, but local scrap is fragmented and variable in quality. Sponsors planning long term often add a direct-reduced iron stream to dilute supply risk, which connects to Nigeria’s Itakpe iron-ore and DRI ambitions. Design the charging system and off-gas train for the feed mix you realistically expect.

Who are the main meltshop equipment buyers in Nigeria? African Industries Group (around 1.2 Mt/yr and a $600m Kaduna iron ore mine), KAM Holding in Kwara (around 600,000 t/yr of EAF steel), Premium Steel & Mines at Ovwian-Aladja (a brownfield DRI-EAF restart toward 1 Mt needing about $220m), plus newer private builds such as the $400m Stellar Steel plant in Ogun State and integrated-steel sponsors like SONNEX feeding the 10-Mt-by-2030 target.

This guide sits under the broader Nigeria industrial and procurement landscape, which covers FX, local content, and federal procurement in depth.