Due to the country’s various challenges, the Nigerian government has stated that it will not be feasible anymore to resume the Ajaokuta steel plant before the Buhari administration term ends next year. Despite this, eleven other companies have expressed interest in the possibility of acquiring the plant on a concession basis. Olamilekan Adegbite, minister of mines and steel development, mentioned that 3 of the 11 bidders are from Russia when outlining his ministry’s accomplishments at President Muhammadu Buhari’s 9th edition scorecard series in Abuja.
The Soviets began construction on the steel company in Kogi State in 1979 and continued through the middle of the 1990s. However, the project was never finished, so the steel plant had yet to produce any steel. Additionally, it was mismanaged. Mr. Adegbite noted that one of the most significant impediments over Ajaokuta was the concession that had been made to Messers Global Steel Industries during the presidency of Olusegun Obasanjo. When things got out of hand, they decided to sue the country. The lawsuit lasted for nearly 12 years, but it was successfully resolved with the help of a passionate Nigerian lawyer working in the UK.
A revoke of an agreement with an Indian firm led to a lawsuit.
While Global Steel initially demanded $7 billion, the attorney was able to spot flaws in their argument, resulting in a $496 million settlement. The verdict was in Nigeria’s favor, according to Mr. Adegbite. To resolve a dispute with an Indian company on Ajaokuta steel, the Nigerian government consented to pay $496 million in September. In 2008, the federal government revoked a deal that had given the Indian company Global Steel Holdings Limited ownership of the steel plant and the National Iron Ore Mining Company, setting off the conflict. In cancelling the agreement, the Umar Yarádua administration claimed that the conditions of the concession at that period were not good for the country.
The minister stated the COVID-19 outbreak jeopardized the government’s goal of making the Ajaokuta steel mill operable by 2022. The procedure is now underway. Although he vowed in 2019 to launch Ajaokuta Steel before leaving office, but COVID-19 made that impossible. They commenced the processing in October 2019 when they travelled to Sochi, Russia, for a summit with Mr President, he stated. They engaged with the Russian administration, led by President Vladimir Putin, on the grounds of a bilateral meeting and President Muhammadu Buhari and the delegate asked them to assist them in reviving Ajaokuta Steel. Since the Soviets constructed it, they agreed.
COVID-19 impedes the reviving plans for the steel plant.
After the meeting, they returned to Nigeria, and he presented their plans to revive the Ajaokuta steel, stating that they would make all efforts to ensure that the idea was successful. They were to begin by doing the technical audit, during which they were to determine what was faulty, what required to be done, what required to be repaired, and so on. According to Mr Adegbite, this is the purpose for which the technical audit was designed.
Speaking further, he explained that the Russians were scheduled to arrive in March 2020 to initiate the three-month technical audit. They came to an agreement on the cost, and everything has been wrapped up and made available by the Nigerian government, but they were unable to complete the technical audit due to COVID-19 Outbreak. It was placed on hold. This continued throughout the years 2020 and 2021 without stopping. After that, they suggested that they take a different approach.
Concession would be reached to further the advancement of the plant.
At the moment, the country now engages with eleven foreign entities, and three of them are Russians. The minister asserted that investors are eager to invest their money in the company and see that it is successful. In the following two years, if they invested the right amount of money, they would begin steel production. The minister affirmed that the procedure was still in progress and that before they left the office, they would concession Ajaokuta to those who would contribute money and see to it that it functioned.
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