Nigeria, UC Rusal sign agreement on Aluminum Smelter Company

Cyril Okonkwo, Abuja

An aluminum smelter

The Nigerian government and leading global aluminum company, UC Rusal, have signed an agreement for the revival of the Aluminum Smelter Company of Nigeria, ALSCON, Ikot Abasi, Akwa Ibom State, Southern Nigeria.

Minister of Mines and Steel Development, Kayode Fayemi, stated this while briefing State House correspondents after the Federal Executive Council meeting presided over by President Muhammadu Buhari.

The agreement, which was signed under the auspices of the Bureau of Public Enterprises, BPE, gives 80% ownership of the company to UC Rusal while Nigeria retains 20%.
Fayemi said UC Rusal was given six months to activate the company and bring it back to use.

On how the issue of ownership tussle between DFIG and UC Rusal was resolved, the minister said that the first bidder failed to meet the deadline to pay the $41 million 10% agreed.

He said based on the approval of the National Council on Privatization, NCP, the new agreement was signed with UC Rusal.

Fayemi said, “It was when the first preferred bidder was unable to meet the deadline for the 10%, it was then offered to the second bidder, which was UC Rusal.  The first bidder ended up in court over this matter.  The Supreme Court also pronounced on it… which again the first bidder failed to meet.”

According to the minister, it was in that context that government came in and sought the approval of the National Council on Privatization to offer it to the second bidder.

ALSCON to add 430 megawatts to national grid         Mr. Fayemi said the aluminum company, when activated would add 430 megawatts of electricity to the national grid.
He said there were other issues that government would deal with for the new owners to succeed.

He said, “There are also issues that we have to protect them against and things that we must deal.  Gas, for example, is a supply that government has committed to, but then it is a matter we have to discuss with the Minister of Petroleum.”

Issues on Ajeokuta being resolved
The mines and steel development minister also said issues on the Ajeokuta Steel Company in Kogi State, North Central Nigeria were being resolved.

He said the international auditing firm, Price Waterhouse Coopers, has completed the audit of the company in terms of the inter-company debt between the concessionaire and the federal government.

He said this would enable government to move to the next stage of the plan to concession the company and to appoint a transaction advisor for it.

The minister said Ajaokuta would also bring additional megawatts of electricity to the national grid.
“One of the things that is critical to us is the power component of that plant; Ajaokuta has 110 megawatts of electricity,”  he said.

Fayemi said also stated that the private owners of the Delta Steel Company, Aladja, Delta State, Southern Nigeria has notified government that the company was being brought back to life.

He said the steel sector was “regaining its pride of place but there is still a lot of challenges because resources are finite.”
Fayemi, who said he briefed council on the approvals given to his ministry since 2015, said the approvals covered ten policy and projects-related initiatives.

Amaka E. Nliam