The federal government of Nigeria has disclosed that it had agreed to pay $496 million to settle a multi-billion dollar claim from Global Steel Holdings Limited following the termination of a contract to upgrade the country’s steel plants.
The Federal Government after a prolonged dispute signed a renegotiated concession agreement with Global Steel Holdings Limited for the Nigerian Iron Ore Mining Company (NIOMCO), Itakpe.
The agreement had taken place after years of mediation and there had been hopes that Nigeria would begin to produce steel. But that never materialised.
The negotiations for amicable resolution of the Ajaokuta crisis had dragged on since 2008, leaving the country’s steel and industrial sectors largely in comatose.
Global Steel Holdings Limited, an Indian company, won the concession of the Ajaokuta steel mill for 10 years, but the agreement was revoked when the federal government accused the firm of asset stripping, a development that led to a court case between the two parties.
