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FG reclaims Ajaokuta Steel Company, vows to make it work

By News Express on 02/08/2016

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After a lot of legal and bureaucratic hiccups, the federal government yesterday announced its takeover of the Ajaokuta Steel Complex, as it signed a renegotiated concession agreement with Global Steel Holdings Limited for the Nigerian Iron Ore Mining Company (NIOMCO), Itakpe.


With this latest agreement, the business concern has now been freed from all contractual encumbrances which rendered it comatose for decades, while GSHL retains NIOMCO.

Coming after about four years of mediation, the truce was reached at a brief ceremony presided by Vice President Yemi Osinbajo, at the State House yesterday. The mediation meetings were severally held in London, United Kingdom.

While the Minister of Solid Minerals Development, Kayode Fayemi, signed on behalf of the government, Chairman of GSHL, Prammod Mittal, did same for his company.

Also at the event as witnesses were Minister of State for Solid Minerals Development, Abubakar Bwari; the International Mediator, Phillip Howell-Richardson, and top officials of both the Ministries of Justice and Solid Minerals Development.

A major highlight of the truce is that government was able to achieve a higher concession fee payable to it from three per cent of turnover to four per cent.

Also, the government was assured guaranteed and continued supply of iron ore to Ajaokuta Steel Company Limited as a priority customer.

In his remark, Vice President Osinbajo hailed the mediation process which led to the resolution of the logjam which had stalled the functionality of the two national assets for years.

“It is one of the cases of failures.

It is a tragedy of immense proportion that we have both Ajaokuta Steel Complex and NIOMCO and couldn’t get anything out of them for years,” Osinbajo lamented.

While stressing that making the concerns work remained the administration’s top priority, the VP urged GSHL to keep to the various timelines in the agreement in the spirit of mediation, adding that “it is important the concession works so that Ajaokuta can take off too.”

Also speaking, Fayemi, who was at the head of the federal government’s team, assured that with the new agreement on NIOMCO, the next step was to commence the process of taking over Ajaokuta and ensuring that it was given out to a serious operator with proven technical and financial capacity.

“It is our expectation that we would accomplish two things – bring NIOMCO to full function and start the process of retaking Ajaokuta and then give it to a new operator. With this, we will move from being just a mineral nation to a mining nation.

“Once the first phase of the agreement is accomplished, it is the intention of the FGN to quickly move into accomplishing the objectives of concessioning the Ajaokuta Steel Plant to the most competent operator who meets the requirements of credible track record, technical capacity and financial competence.

“Overall, we are confident that this landmark settlement is a pointer to what to expect in the government’s determination to fix the Nigerian mining sector. This is one of the key milestones in the Road Map for the growth and development of the Nigerian mining sector. And I want to thank our team from the Federal Ministries of Justice and Solid Minerals for their hard work and also thank GSHL for sticking to the provisions of the laws in seeking resolutions to the problem,” Fayemi added.

The minister further described the truce as a landmark development that would help the diversification plans of the President Muhammadu Buhari administration.

In his remark, the GSHL Chairman, Mr Mittal, said his company waited for eight years to achieve this amicable settlement, assuring that the organisation was committed to the objectives of the agreement and guaranteed supply to Ajaokuta plant and Delta Steel Company, after which it would sell what is left to other interested parties.

Mittal also assured the government of its readiness to commence operation soon, adding that in the next two years Nigeria would begin to produce steel.

The International Mediator, Mr Richardson, lauded the two parties for opting for mediation as a means of settling the dispute, which had been on since 2008, leaving the country’s steel and industrial sectors largely non-functional.

Dispute over the ownership of the entities had made it difficult for government to make any long‐term plans for the concession or privatisation of the two companies.

President Buhari gave approval for the execution of the modified concession agreement with Global Steel Holdings Limited, after he received the reports of the mediation meetings from the Ministry of Justice.

The mediation meetings were severally held in London, United Kingdom.

•Sourced from Blueprint. Photo shows Ajaokuta Steel Complex. 

Source News Express

Posted 02/08/2016 1:20:37 PM


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