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09/07/2016

Business Nigeria And Indian Firm Reach Agreement On Ajaokuta Steel Company

Nigeria And Indian Firm Reach Agreement On Ajaokuta Steel Company

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Barring any last minute change in plans, an
amicable resolution of the ownership crisis
surrounding the Ajaokuta Steel Complex might be
reached early August when the Nigerian government
and Messrs Global Steel Holdings Limited, and
Indian firm, are scheduled to sign terms of
settlement.

The signing of the terms of settlement will free
Ajaokuta Steel Complex from all contractual
encumbrances that had left it uncompleted and non-
functional for decades, PREMIUM TIMES has
learned.

Negotiations for amicable resolution of the
ownership crisis of the foremost steel company has
dragged on since 2008, leaving the country’s steel
and industrial sectors largely paralysed.

Those familiar with the negotiations told PREMIUM
TIMES President Muhammadu Buhari had already
given approval for the execution of the “modified
concession agreement with Global Steel Holdings
Limited, following reports of the mediation
meetings forwarded to him from the Justice
ministry.”

The mediation meetings, reliable sources said,
recently held in London, United Kingdom.

The London meetings followed months of
negotiations between the Federal Government and
Global Steel Holdings, coordinated by an
international mediator, Phillip Howell-Richardson.
The Nigerian government’s team to the series of
meetings was led by the Minister of Solid Minerals
Development, Kayode Fayemi, whose ministry is
responsible for the steel sector, our sources said.

The team also comprised top officials of the
Ministry of Solid Minerals development and Ministry
of Justice.

The Chairman of GSHL, Prammod Mittal, led the
consortium’s team to the meetings.

Insiders said part of the agreements reached during
the last meeting was that the Ajaokuta Steel
Complex reverts to the Nigerian government fully,
while its sister company, Nigerian Iron Ore Mining
Company (NIOMCO) would be retained by GSHL
under existing concession agreement but with
Ajaokuta plant gaining priority access to the iron ore
from NIOMCO.

President Buhari has repeatedly promised to
diversify the Nigerian economy and create jobs
through agriculture and extraction of solid minerals.

Mr. Fayemi, who resumed work as Minister of Solid
Minerals Development on November 11, 2015, had
in many fora restated the Federal Government’s
commitment to ensuring that the AjaokutaSteel
Complex is revitalised.

The multi-billion dollar Ajaokuta Steel Company is
regarded as one steel complex with capacity to help
trigger the much-needed industrialisation of the
country as well as stimulate growth in the iron and
steel sub sector.

Several investors had expressed interest in the
completion and running of the plant, including the
Russian and Ukranian original builders of the plant;
a Chinese consortium and many indigenous steel
companies.

Sources at the Ministry of Solid Minerals
Development said once all encumbrances have been
removed, government would conduct a transparent
bid exercise that would be determined purely by
technical competence and financial capacity.

Global Steel could not be reached for comments
Friday, but the Ministry of Solid Minerals
Development confirmed serious negotiation was
apace.

Olayinka Oyebode, the chief press secretary to
Minister Fayemi said he was aware of the ongoing
negotiation, but that he had no mandate from to
divulge its details.

The mediator, Mr. Howell-Richardson, was not
available when PREMIUM TIMES called his office.
His staff, Nicky Doble, said only the mediator could
discuss the matter.

Mr. Howell-Richardson’s cellphone failed to connect
the multiple times our reporter called.

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