Nigeria, Indian Firm Reach Agreement on Ajaokuta Steel Company

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By Yekini Jimoh in Lokoja with agency report

The multi-billion dollar Ajaokuta Iron and Steel Company will soon come out of bondage following an amicable resolution of the ownership crisis surrounding the company.

According to online news website, Premium Times, the parties could reach an agreement when the federal government and Messrs Global Steel Holdings Limited, and Indian firm, meet next month and are scheduled to sign the terms of settlement.

The signing of the terms of settlement, according to the source, would free Ajaokuta Steel Complex from all contractual encumbrances that had left it uncompleted and non-functional for decades.

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 disclosed that 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 Muhammadu Buhari had repeatedly promised to diversify the Nigerian economy and create jobs through agriculture and extraction of solid minerals.

Fayemi, who resumed work as Minister of Solid Minerals Development on November 11, 2015, had at many fora restated the federal government’s commitment to ensuring that the Ajaokuta Steel 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.

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

Olayinka Oyebode, the Chief Press Secretary to Fayemi, said he was aware of the ongoing negotiation, but that he had no mandate to divulge its details.