Connect with us

Solid Minerals

Ajaokuta reclaim: Finest intention, wrong direction (Part 1)

Published

8 years ago

on

By Our Reporters
LAGOS-ON August 1, 2016, Nigerians were excited over Federal Government bold decision to revitalise the steel sector when it signed a renegotiated concession agreement with an Indian steel company, Global Steel Holdings Limited, GSHL, for the Nigerian Iron Ore Mining Company, NIOMCO, Itakpe.
The new agreement indicates that Ajaokuta Steel Complex now reverted to the Federal Government, while GSHL retains NIOMCO.
The move according to the Minister of Solid Minerals Development, Dr Kayode Fayemi is in line with President Buhari repeated promise to diversify the Nigerian economy and create jobs through agriculture and extraction of solid minerals.
Despite the federal government finest intention to diversify the nation’s economy away from crude oil, apprehension is on red alert that this new agreement might be heading toward the wrong direction, direction of impossible redemption if urgent steps are not taken.
Why Nigerians should be worried
FG recovers Ajaokuta Steel from Global SteelGlobal Infrastructure Nigeria Limited, GINL, and Global Steel Holding Limited, GSHL is owned by Pramod Mittal. He is the younger brother of Lakshmi Mittal. Lakshmi is a renowned guru in the steel industry with successful tract records in South Africa, England and other countries.
He had a successful relationship with his younger, Pramod until he felt uncomfortable with his younger brother business style. They finally went their different way which promoted Pramod to set up Ispat Steel Company.Ispat started operation in India but got itself into Corporate Debt Restructure, CDR.
CDR is going to places in the guise of reviving industries but processed in collecting loans from banks, selling assets among others without the intension to pay back or revive any industry. In 2003, the Indian government took over Ispat from Pramod Mittal as result of owning 18 Indian banks over 800 million euros.
The take over of Ispat Steel by the Indian government forced Pramod Mittal to establish and registered Global Steel Holding Limited, which later came to Nigeria to do business. As at today, findings revealed that Global Steel Holding Limited has no record of any successful steel business anywhere in the world.
The deal signed by the Federal Government happens to be the biggest deal for Pramod in recent time. The question on the lips of some Nigerians is: What do we expect from a company that has no record of successful mine or steel business anywhere in the world rather than debt incurment and assets stripping?
 
 
How Global Steel came to Nigeria
The JUSTIA US Law in case a filed tiled MEMORANDUM OPINION, No. 04-06-00731-CV .SOLGAS ENERGY LIMITED, Appellant v.GLOBAL STEEL HOLDINGS LIMITED f/k/a Global Infrastructure Holdings Limited, Appellee. From the 38th Judicial District Court, Uvalde County, Texas. Trial Court No. 05-09-24,865-CV Honorable Mickey R. Pennington, Judge Presiding; Opinion by: Karen Angelini, Justice; Sitting: Karen Angelini, Justice, Sandee Bryan Marion, Justice, Steven C. Hilbig, Justice; Delivered and Filed: July 3, 2007 obtained by our correspondent gave a detailed background information on how Global Steel Holding Limited came to Nigeria.
 
The case stated that: “In June of 2003, Solgas Energy Limited, a limited liability company incorporated under the laws of the Isle of Man, entered into an agreement (“Concession”) with the federal government of Nigeria and Ajaokuta Steel Company Limited, a Nigerian company wholly owned by the federal government of Nigeria. The Concession obligated Solgas to complete, refurbish and expand the Ajaokuta Steel Plant in Nigeria and to build a gas processing plant to supply the steel plant with electrical power.
In 2004, Solgas began searching for a subcontractor to assist it in preforming its obligations under the Concession. Solgas asserts that a subcontractor was sought to increase the efficiency and profitability of the steel plant. Global Steel counters that Solgas was primarily a natural gas company and needed the assistance of a steel company to fulfill its commitments.
Solga’s principal business office is located in Uvalde, Texas. Thomas Russell, the chairman and CEO of Solgas, stated that Solgas received e-mail correspondence from numerous representatives of the “Global Steel corporate family” “push[ing] hard for the opportunity to participate in the project.” Russell stated that the representatives identified themselves as working for “Ispat,” “LNM Holdings,” and “the Mittals.”
Russell further stated that “we were consistently told that we were dealing with ‘Ispat,’ a well-known Indian steel conglomerate, recognized for its expertise in revitalizing steel plants in the developing world.” In late 2003 and early 2004, Russell received four telephone calls from different representatives of LNM Holdings originating either in India or the United Kingdom expressing “Ispat’s interest in working with Solgas on the Ajaokuta Project.”
In response to a request for information regarding LNM Holdings, Russell stated that he received information via e-mail “regarding Ispat and Lakshmi Mittal, the President and Chairman of LNM Holdings/Ispat.” During the spring and summer of 2004, Pramod Mittal, president of Global Steel, contacted Russell at least three times by telephone to express thanks for inviting him to Nigeria to view the steel plant facility and to express interest in the project.
Global Steel also is incorporated under the laws of the Isle of Man, and its principal place of business is in Dubai. No representative of Global Steel ever traveled to Texas or the United States in connection with the project or conducted any negotiations or performed any work in Texas. No documents relevant to the project were executed in Texas.
In May of 2004,
Solgas and Global Steel entered into a Confidentiality Agreement. Global Steel was identified in the agreement as “Global Infrastructure Holdings, Ltd. (“GIHL”), their Subsidiaries and Affiliates, hereinafter referred to as (“LNM”).” The purpose of the agreement was to maintain the confidentiality of information exchanged as the parties pursued “discussions specifically regarding the possibility of pursuing a mutually beneficial business venture concerning the production of steel, the generation of power, and an LPG gas processing plant located in or near Ajaokuta, Kogi State, Nigeria.” The Confidentiality Agreement provided that it would be governed by Texas law.
On July 18, 2004, Solgas and Global Steel entered into a memorandum containing the terms pursuant to which the parties intended to pursue the fulfilment of the Concession obligations. The agreement was subject to the consent of the federal government of Nigeria. The memorandum provided that it would be governed by English law, and any dispute was to be resolved by arbitration “under LCIA Rules in London.”
On August 11, 2004, Solgas sent a letter to the federal government of Nigeria stating that Solgas had been unsuccessful in securing the necessary capital required to fulfill its obligations. The letter stated that Solgas sought to dissolve the Concession. On August 12, 2004, Solgas and the federal government of Nigeria entered into an agreement terminating the Concession. After the termination of the Concession with Solgas, Global Steel entered a new concession agreement with the federal government of Nigeria relating to the steel plant.
-To Be Continued
Related Topics:
Click to comment

Solid Minerals

FG Fingers Foreigners Sponsoring Banditry For Illegal Mining

Published

7 months ago

on

October 1, 2023

By

The Nigerian Government has threatened to come down heavily on foreigners sponsoring bandictory as a way of sustaining illegal mining activities in parts of the country.

The warning was handed down in Abuja by Minister, Solid Minerals Development, Dr Oladele Alake, while receiving a delegation of the Nigeria-China Chamber of Mines led by its National President, Dr. Olugbenga Ajala.

Details of these were contained in a statement released by Head, Press & PR, Ministry of Solid Minerals Development, Alaba Balogun over the weekend.

The statement cited, Dr Alake, thus, “The government will come down firmly on these unscrupulous foreign operators sponsoring banditry to perpetrate illegal mining: let me use this medium to appeal through you to tell those sponsors to desist or face the full wrath of the law.”

According to Dr Alake, the Ministry is committed to establishing a multi-agency task force that will end the activities of illegal miners and their collaborators.

The Minster made it clear that the FG had given illegal miners a 30-day-ultimatum to legitimise their businesses, quit Nigeria or incur the wrath of the law.

According to him, this will help “to streamline and structure the Small-Scale Artisanal Miners for maximum yield to the Federal Government.”

The delegation paid a courtesy call on the Minsiter at the Ministry’s headquarters in Abuja.

Continue Reading

Energy

Fuel Scarcity: Govt Yet to Increase Pump Prices – NMDPRA

Published

1 year ago

on

December 1, 2022

By

A long queue at an NNPC fuel station

By Edozie Obasi-Eze

 

Amidst heightening uncertainties in the domestic petroleum products market characterised by scarcity and irregular pricing, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has declared that there’s no intention to review pump prices upwards.

This was contained in an advisory issued by General Manager, Corporate Communications, NMDPRA, Kimchi Apollo.

He stated that the Nigerian National Petroleum Corporation Limited (NNPCL) had imported PMS with current stock levels sufficient for 34 days.

In an attempt to address panic buying and speculations which have seen price of Premium Motor Spirit (PMS) oscillate between N180-N250 in the Lagos area, Apollo assured that there was enough quantity of the product in the country already.

He said, “Consequently, marketers and the general public are advised to avoid panic buying, diversion of products and hoarding.

“In keeping with the Authority’s responsibilities as outlined in the Petroleum Industry Act (PIA), the Authority assures the public that it would continue to monitor the supply and distribution of petroleum products nationwide, especially during this holiday season.”

Continue Reading

Solid Minerals

DIVERSIFICATION: RMAFC inspects mining activities in Ondo

Published

2 years ago

on

September 27, 2022

By

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) says it is verifying and reconciling revenue collections in the Solid Minerals Sector of the economy.

The Federal Commissioner, RMAFC, Chief Tokunbo Ajasin, stated this at a strategic meeting on the commission’s 2022 nationwide monitoring of revenue collections of the Nigerian mining sector in Akure on Monday at the state Ministry of Finance Conference Hall.

This is contained in a statement by Mr Banjo Egunjobi, the Head of Media Unit of the ministry.

Read also>>>Darkness Envelopes Nigeria as National Grid Collapses For 7th time in 2022

Ajasin said 25 enterprises exported minerals in 2019 with no record of royalty payment, while about N2.76 billion outstanding liabilities had been established against 2,119 mining companies nationwide.

He said that this arose from failure to pay the Annual Service Fees for their company titles.

According to the Federal Commissioner, the Commission is empowered to monitor all revenue accruals from the extractive industries to ensure prompt and accurate remittances to the Federation Accounts.

He added that the monitoring was a follow-up on the 2016 exercise to assess the challenges hindering optimum revenue collection from the sector.

Ajasin said the monitoring comprised revenue collections and the activities of miners in the state.

According to him, the major issues of concern to the Commission is the Nigeria Extractive Industries Transparent Initiative NEITI 2020 report.

He added that the number of defaulting companies would be determined after engagements.

“There is also the issue of underpayment of royalty by 25 enterprises that exported minerals in 2019 with no record of royalty payments.

“These companies owe the government about N482 million in overdue royalty.

He said the 2,119 mining companies’ default nationwide arose from the failure to pay the annual service fees for their respective mineral titles.

Ajasin also said the Commission’s mandate in the extractive sector was to recover the established liabilities owed to the Federation Account.

He, therefore, urged participants to explore the opportunities in the state to harness the revenue potential in the Solid Minerals sector to boost Internally Generated Revenue.

The State Commissioner for Finance, Mr Wale Akinterinwa, stated that the process of allocating the 13 per cent derivation on crude oil paid to the states across the federation depended on the effective monitoring of revenue and the collection of established liabilities from mineral resources.

Akinterinwa noted that the cooperation given by the state Ministry of Finance, Ministry of Energy, Mines and Mineral Resources and others to enforce payment of the reported liabilities  would assist in fulfilling the objectives of the exercise and a means of engaging some Strategic Revenue Drive  for the state.

The commissioner said the present administration of Gov. Oluwarotimi Akeredolu would do everything at its disposal to facilitate the collection of revenue as listed in the NEITI Audit Report 2022.

He, therefore, urged stakeholders to accord full cooperation to the RMAFC team and be committed to achieving the desired goal.

Also the Permanent Secretary of the Ministry, Rev. Jide Ekpobomini, said sourcing for a quick alternative to all income was necessary and could not be overemphasised.

He said government revenue inflows would  surely be boosted if the sector was vigorously harnessed.

Also his counterpart from Ministry of Energy, Mines and Mineral Resources, Mr Wemimo Ogunsanmi, said the state government had initiated a strategic mineral development plan to exploit the solid minerals sector, hence the establishment of the ministry.

Continue Reading

Copyright © 2022. Biztellers, powered by Alphaxristi.