The Federal Government on Monday took a major
step in its plan to revitalise the steel sector as it signed a renegotiated
concession agreement with Global Steel Holdings Limited for the Nigerian Iron
Ore Mining Company (NIOMCO), Itakpe.
By the new agreement, the Ajaokuta Steel
Complex has now reverted to the Federal Government, effectively freeing the
entity from all contractual encumbrances that had left it uncompleted and
non-functional for decades, while GSHL retains NIOMCO.
The new agreement, which came after four
years of mediation, was signed at a short ceremony presided by the Vice
President, Yemi Osinbajo, in his office at the presidential villa on Monday.
The Minister of Solid Minerals Development,
Kayode Fayemi, signed on behalf of the government, while the Chairman of GSHL,
Prammod Mittal, signed on behalf of the company.
The Minister of State for Solid Minerals
Development, Abubakar Bwari; the International Mediator, Phillip
Howell-Richardson, and top officials of the Ministries of Justice and Solid
Minerals Development also witnessed the signing ceremony.
Speaking at the event, Prof Osinbajo hailed
the mediation process that led to the resolution of the problem that had made
it impossible for the two national assets to be functional for years.
“It is one of the cases of failures,” Mr.
Osinbajo said. “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.”
The Vice President said making the entities
to work remained a top priority of the administration, and urged GSHL to keep
to the various timelines in the agreement in the spirit of mediation.
He added that it was important the concession
work “so that Ajaokuta can take off too.”
Mr. Fayemi, who led the Federal Government
side in the mediation process, said 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 starts the
process of retaking Ajaokuta and then give it to a new operator, Mr. Fayemi said
“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.”
Mr. Fayemi described the settlement as a
landmark development that would help the diversification plans of the President
Muhammadu Buhari administration.
The GSHL Chairman, Mr Mittal, said the
company waited for eight years to achieve this amicable settlement.
He said his 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.
He 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 government and GSHL for opting for mediation as a means of settling
the dispute.
Negotiations for amicable resolution of the
Ajaokuta crisis had dragged on since 2008, leaving the country’s steel and
industrial sectors largely comatose.
Following this settlement, the steel sub
sector is on the way to being revitalized and Nigeria’s industrial base
solidified, officials said.
Dispute over the ownership of the Ajaokuta
Steel Complex and NIOMCO had made it impossible 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 held in London, United
Kingdom.
The Federal Government team to the series of
meetings was led by Mr. Fayemi, whose ministry is responsible for the steel
sector.
One major highlight of the settlement is that
the Federal Government was able to negotiate a higher concession fee payable to
the it from three per cent of turnover to four per cent of turnover.
Also, the government was assured guaranteed
and continued supply of iron ore to Ajaokuta Steel Company Limited as a
priority customer.
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