FG Signs Modified Agreement with Global Steel Holdings on NIOMCO

Kick-starts steel devt, takes over ownership of Ajaokuta
Global Steel Holdings to submit business plan within 105 days, says govt 

Kasim Sumaina in Abuja
The federal government has taken 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, according to the government, 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 yesterday at a short ceremony presided by Vice President Yemi Osinbajo in his office at the Presidential Villa.

Recently, President Muhammadu Buhari gave the 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.

Speaking at the event, Osinbajo hailed the mediation process that led to the resolution of the problems that made it impossible for the two national assets to be functional for years.
According to him, “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 many years.”

The vice president who said making the entities to work was a top priority of this administration, 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.”
Also, speaking the Minister of Solid Minerals Development, Dr. Kayode Fayemi, who signed on behalf of the government in the mediation process, said with the new agreement on NIOMCO, the next step is to commence the process of taking over Ajaokuta and ensuring that it is given out to a serious operator with proven technical and financial capacity.

Fayemi said: “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.
Fayemi described the settlement as a landmark development that would help the diversification plans of the President Muhammadu Buhari administration.

While responding, the Chairman of GSHL, Prammod Mittal, who signed on behalf of the company said, the company waited for eight years to achieve this ‘amicable’ settlement.

According to him, “My organisation was committed to the objectives of the agreement and guaranteed supply to Ajaokuta plant and Delta Steel Company, after which, it will 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, Richardson, lauded the government and GSHL for opting for mediation as a means of settling the dispute.

The negotiations for amicable resolution of the Ajaokuta crisis has dragged on since 2008, leaving the country’s steel and industrial sectors largely in comatose. Following this settlement, the steel sub sector is on the way to being revitalised and Nigeria’s industrial base solidified.

 Meanwhile, the federal government yesterday disclosed that following the signing of the modified agreement between it and Global Holdings Limited, the company is to submit its business plan for government’s approval within the next 105 days.

In a statement made available to journalists in Abuja, the federal government noted that the submission of business plan for approval is part of the timeline agreed upon by both parties for the revitalisation of the entity

It stated that under the new arrangement, the concessionaire is to implement the business plan as approved by the government.

According to the timeline released by the Ministry of Solid Minerals Development, GSHL would within 48 hours of the signing of the agreement gain access to NIOMCO plant at Itakpe, Kogi State, for due diligence.
The Minister of Solid Minerals Development, Fayemi, stated getting NIOMCO and Ajaokuta working would move Nigeria from just being a mineral-rich country to a mining nation.

He said: “Once the first phase of the agreement is accomplished, it is the intention of the federal government to quickly move into accomplishing the objectives of concessioning the Ajaokuta Steel Plant to the most competent operator.”
Under the new arrangement, the concessionaire is to implement the business plan as approved by the government.