Business Hilights
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Confusion still rages on fate of Ajaokuta Steel Complex

Contrary to claims by the Federal Government that it will soon take decision on what happens to the Ajaokuta Steel Complex, there are serious indications that the matter surrounding the re-concessioning, may linger till next year.

Whereas a director of Global Steel Holdings Limited, concessionaire of the Ajaokuta Steel Company Limited, Dr. S. O. Nwanbuokei, that the dispute between the Federal Government and the Indian firm had not been resolved, the government in a statement issued by the Permanent Secretary, Ministry of Mines and Steel Development, Mr. Mohammed Abbas, said decision is yet to be taken.

According to government,  “His (Nwanbuokei) claims contradict the position of the Minister of Mines and Steel Development, Dr. Kayode Fayemi, who reaffirmed the Federal Government’s ownership of the Ajaokuta Steel Complex during the just concluded Nigerian Mining Week, as he had done in similar forums.

“The ministry’s position, as stated by the minister, is that Ajaokuta Steel Complex belongs to the Federal Government of Nigeria and there is no contention about this fact.

“The Federal Government does not need any mediation to determine its ownership of Ajaokuta Steel Complex as the integrated steel complex has always been the property of the Federal Government.”

“It must be stated clearly that concession of an asset does not make one lose the ownership of the asset. In the case of Ajaokuta Steel Complex, the Federal Government remains the actual owner of the asset, while the concession arrangement was in place. This situation has not changed after the entire concession arrangement crumbled.

“The position of the government is that having ceded the National Iron Ore Mining Company, Itakpe to the GSHL for the remaining concession period, as part of the agreement reached during the mediation, government will at the appropriate time take a decision on how best to put Ajaokuta Steel Complex to profitable use.

“This includes engaging a new core investor with proven financial and technical capacity to turn around, complete and run the steel complex profitably. This is still the position of the government.”

Business Hilights gathered that the Indian firm had won the concession of the Ajaokuta and Itakpe firms for 10 years but the agreement was revoked when the Federal Government accused the firm of asset-stripping.

The matter was subject to court action which had continued to linger and there is no plan by any of the party to consider out of court settlement. This scenario therefore points to the fact that misunderstanding will continue to linger as the investor is not ready to lose the volume of investments which it claims to have been made in the plants before now.