The Nigerian government has finally paid the sum of $496 million to settle a multi-billion dollar claim from Global Steel Holdings Limited to reclaim the Ajaokuta Steel Mill in Kogi State.
Recall that Global Steel entered the Nigerian steel industry in 2004 following five major concessions and share purchase agreements by the Olusegun Obasanjo administration.
However, when the late President Umaru Musa Yar’Adua’s new administration took office, things turned bad.
Because the firm was engaged in asset stripping, the government canceled Global Steel’s 10-year concession of Ajaokuta steel in June 2008.
Abubakar Malami, the Minister of Justice and Attorney General of the Federation, reportedly stated in September that they would settle the bill.
He said instead of paying the original claim of $5.258 billion by GSHL over the termination of the concessions by the Olusegun Obasanjo administration, Nigeria was able to secure a 91 percent reduction and will now pay $496 million only.
With this development, the Minister of justice said, President Muhammadu Buhari has now “rescued” the steel industry from interminable and complex disputes as well as saving the taxpayer from humongous damages.
After a protracted disagreement, the Federal Government and Global Steel Holdings Limited renegotiated the concession agreement for the Nigerian Iron Ore Mining Company (NIOMCO), Itakpe.
The agreement was reached after lengthy negotiations, and although there had been expectations that Nigeria would start making steel, those dreams were never realized.
Since 2008, there have been protracted negotiations to find a peaceful solution to the Ajaokuta conflict, paralyzing the nation’s steel and industrial sectors.
But the news medium quoted Malami, who it said led the negotiations, as having said that the government had managed to get a 91 percent cut on the original claims of $5.258 billion.