Nigeria’s strive for a thriving domestically-produced aluminium industry seems possible again as the federal government recently announced its renew interest and plan to revive the $3.2 billion Aluminium Smelter Company of Nigeria (ALSCON) in Ikot Abasi, Akwa Ibom Stat. It was stated that the company will contribute hugely to the nation’s Economy when fully operational. Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, expressed optimism in the impending renovation of the plant, characterizing it as an immense boost to investors’ trust, as contained in a statement made in Abuja by his spokesman, Louis Ibah.
Ekpo reiterated the administration of President Bola Tinubu’s steadfast dedication to luring and securing investments in the nation while assuring Investors of substantial returns on their capital. The minister’s assurance serve as a ray of hope for investors who have been hesitant to invest money into the moribund facility, which has lain dormant for years. According to Ekpo, ALSCON was one of the Nigerian companies that might have stimulated Economic Growth and created jobs through its value chain and operations, but sadly, mismanagement caused it to fail.
Critics cite signs of poor planning and mishandling.
Initially, the ALSCON was developed to strengthen Nigeria’s industrial base by providing premium aluminum to both domestic and foreign markets, hence lowering reliance on imports and generating employment. But over the years, the company has encountered an array of operational, financial, and legal difficulties. The project has been plagued by persistent delays, inadequate financing, and disputes over contracts for over twenty years. The initial aim of starting operations again by 2020 was pushed out to 2023 due to unforeseen circumstances.
Many Nigerians began to doubt the project’s viability and possible economic benefits after the most recent failure in 2023, which prompted new criticism of the project. Critics pointed to the rising expenses, frequent setbacks, and alleged lack of transparency as signs of poor planning and mishandling. With a yearly capacity of 193,000 tonnes, the ALSCON project was constructed in 1999. However, prior to closure in 1999, it only produced 40,000 tonnes of metal. The main cause of this termination was Reynolds’s departure, the technical partner, as a result of irreconcilable disputes.
Prolonged legal battle has hampered the project.
In 2004, the Nigerian government, acting through the Bureau of Public Enterprises (BPE), started the Privatization process with the intention of reviving ALSCON. The plant was sold to Rusal, a Russian business, for $250 million in 2006 following a competitive bidding process. Rusal acquired a 77.5% share in the company. 15% of the shares were owned by the Nigerian government, with the remaining 7.5% going to local communities and employees. A lengthy court battle and great controversy were brought about by the privatization of ALSCON.
Rusal’s purchase of ALSCON was disputed by BFI Group Corporation, a Nigerian-American consortium located in the United States that was first awarded the ALSCON bid in 2004 but was subsequently ruled ineligible by BPE. The Nigerian Supreme Court decided in BFI Group’s favor in 2012, reversing the sale and giving the business ownership. The plant’s operations and investments were hampered by the prolonged legal battle between BFI Group and Rusal over ownership rights, which resulted in the verdict not being promptly implemented.
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Due to the unresolved ownership issue, pending legal proceedings, and unstable Natural Gas supply—which is essential to ALSCON’s operations—the company has been mainly non-operational since 2007. Over 1,500 workers were employed by the plant during its height, but because of its inactivity the majority of them have been laid off. The Infrastructure of ALSCON has suffered greatly over time primarily due to years of mismanagement, low funding, and negligence. The factory’s machinery and equipment, such as its power plant and smelting pots, need extensive restoration before it commence operations.