The federal government has agreed to pay $496m to settle to settle a multi-billion dollar claim from Global Steel Holdings Limited, following the termination of a contract to upgrade the country’s steel plants
Mining.com quoted the attorney general of the federation and minister of justice, Mr. Abubakar Malami as confirming the resolve of the federal government to pay the claims.
After a prolonged dispute, the federal government had signed a renegotiated concession agreement with Global Steel Holdings Limited for the Nigerian Iron Ore Mining Company (NIOMCO), Itakpe.
The agreement had taken place after years of mediation and there had been hopes that Nigeria would begin to produce steel. But that never materialised.
The negotiations for amicable resolution of the Ajaokuta crisis had dragged on since 2008, leaving the country’s steel and industrial sectors largely in comatose.
Malami was also quoted as saying that the government had managed to get a 91 per cent cut on the original claims of $5.258 billion.
“I pay tribute to President (Muhammadu) Buhari for his dedication to resolving this problem and wrestling back a crown jewel of our national industrialisation plans rather than leaving the endeavour to the future administration to deal with,” he was quoted as saying.
Global Steel Holdings Limited acquired Nigeria’s entire state steel industry via five major concessions and share purchase contracts.
The deal also included access to Nigeria’s iron ore reserves and the central railway network.
However, the contracts were revoked in 2008 when the federal government accused the firm of asset stripping – a development that led to a court case between the two parties.
To resolve the matter, NIOMCO was reportedly ceded to the GSHL for the remaining period of the concession in line with an agreement reached during mediation talks.
Between 2011 and 2020, Global Steel and the Nigerian government made several attempts to settle but the efforts did not yield the expected result.
Global Steel sought arbitration at the International Chamber of Commerce, Court of Arbitration in Paris the same year.
