Home Business FG, Global Steel sign agreement to resuscitation Itakpe iron ore, Ajaokuta steel coys

FG, Global Steel sign agreement to resuscitation Itakpe iron ore, Ajaokuta steel coys

by Business News Report

Federal Government and Global Steel have signed an agreement for the resuscitation of the Nigeria Iron Ore Mining Company (NIRONCO), Itakpe. The signing of the agreement, which took at the State House, Abuja on Monday, is aimed at revamping the Ajaokuta Steel Company in Kogi state. Dr Kayode Fayemi, the Minister of Solid Minerals signed on behalf of the Federal Government while Mr Pramod Mittal, Chairman of Global Steel, signed on behalf of the company.

Vice President Yemi Osinbajo, who presided over the event, urged the parties to stick to the terms of the agreement in order to achieve the objective of revamping the Itakpe and Ajaokuta companies within the agreed time.

“There are specific agreements that have been reached; there are specific conditions that have to be met and there are time lines which have been set in the agreements. I think it is very important that we keep to those timelines, and that we observe those agreements as faithfully as possible. There is no question at all that there might be situations where there might be slip offs of one kind or the other. But I hope that we might be able to accommodate each other in the spirit of the mediation and ensure that we keep the objective in sight. Which is, to make sure that this concession works and that eventually we are able to free up Ajaokuta for business as quickly as possible.’’

The vice president noted that the signing of the agreement was unique which informed the presence of the media and other stakeholders. “We are reasonably familiar with the history of all of what we have experienced with Ajaokuta and the iron mining corporation as well. It is very clear that this is one of those terrible failures of just basically getting things done over the years. I think that somehow or the other we let the ball drop so many years ago and somehow, we couldn’t get this back on track. Unfortunately, it has cost us a lot; the fact that we had an Ajaokuta Steel for so long and we had the iron mining company for so long and yet produced absolutely nothing is by itself a tragedy of immense proportions,’’ he said.

Osinbajo, however, noted that it was a good thing that the country is now able to recover from all that and move towards getting things right. He stated that everybody in Nigeria keeps talking about what the nation can do with steel, adding that it was “so obvious that steel is such an important requirement and we spent so much on it. “This is possibly the first concrete step towards ensuring that all of our complaints are dealt with and that we are able to, not too long from now, produce our own steel.

“So that we can save ourselves some foreign exchange and create jobs and opportunities for local investments and local individuals who would be interested in working with us on steel.’’ The vice president said that parties should not only congratulate themselves for the feat but also hold themselves to account in the next few months, which according to him would be absolutely critical.

He thanked Global Steel for being a useful partner in getting things done.

Osinbajo expressed optimism that the present administration would work closely with Mittal to ensure that both the iron ore mining company and Ajaokuta Steel operated efficiently. Fayemi had recalled that in 2008, the Umaru Yar’Adua administration revoked the Itakpe resuscitation contract that was concessioned to Global Steel by the Olusegun Obasanjo administration in 2005. The concessioning was to last 10 year.

He added that since the contract was revoked, both parties had been in arbitration and later went into mediation, which result is the current agreement signing. The minister said the determination of the Muhammadu Buhari administration to diversify the economy ignited the effort to ensure that Itape and Ajokuta came alive again.

According to him, the agreement to return the Iron Ore Mining Company to Global Steel was reached in London in June to enable it to complete its concession and ensure that Ajaokuta reverts back to the federal government. Fayemi said that in executing the agreement other areas such as the rail transportation and ports issues would be addressed by the Ministry of Transportation. He said that the Iron Ore Company was the core supplier of raw materials for major steel companies in the country and that government had spent $3.3 billion to import steel products since. He said there was enough iron ore deposit to sustain the local needs, especially the Ajaokuta and Delta steel company, Aladja, and thanked the Vice President for presiding over the execution agreement.

“It is our expectation that at the end of the review that is going to follow this execution we would have brought the Nigeria Iron Mining company back into full functioning. And also start the process of retaking the Ajaokuta plant and then putting it out to interested bidders who are already showing keen interest in its resuscitation,’’ he said.

He said the process would move the country from being a minerals nation to a mining nation and enable the country to process and add value to the mineral resources before exportation.

Mittal in a speech said that his company started operations in the country in 2004 with determination to produce steel for the country. He said the process was long but it was important that the steel sector was developed fast to speed up other types of development in the country. He said the company was poised to produce three million tons of steel in three years but added that for effectiveness the company would need rail, gas and power supplies. Mr Howard Richardson, the mediator, said that the mediation gave the best opportunity for wisdom and common sense to prevail and to give the steel industry in the country the best of all possible starts in the future.


Related Posts