Timeline of Activities on Ajaokuta Steel Company Limited

🎰1958

Government conceptualised the steel industry. Foreign consultants advised that it was better to import steel than to construct and run a steel plant.

🎰1970

Messrs V/O TyazhPromExport (TPE) of defunct USSR contracted to carry out detailed geological studies of Nigeria regarding occurrence of raw materials suitable for iron and steel production

🎰1971

NSDA founded, with the responsibility for planning, construction and operation of steel plants as well as necessary geological surveys, market studies, and metallurgical research relevant to steel production.

🎰1973

NSDA commissioned (TPE) to prepare preliminary project report (PPR) for the proposed steel plant.

🎰1974

Preliminary Project Report (PPR) completed

🎰1974

Decision to site an integrated steel plant in Ajaokuta in former Kwara State

🎰1975

PPR accepted and TPE commissioned to prepare a detailed project report based on recommendations contained in the approved PPR

🎰1977

Detailed Project Report (DPR) was completed

🎰1977

Confirmation of viable deposits of iron ore, limestones and dolomite at Itakpe, Obajana & Osara respectively. These sites sit within the 100km radius of the Kabba – Okene – Lokoja – Katon-Karfe axis

🎰1977

Decision to site Iron Ore Production Plant in Itakpe within the same radius to serve as a raw materials feeder Plant for ASP

🎰July 1979

Contract for working drawings and the supply and installation Technological Equipment and Steel Structures of ASCL awarded to Messrs. TPE

🎰September 1979

ASCL established under Section 2 of National Steel Council Decree No 60 of 1979. ASCL incorporated as Limited Liability Company same year.

Same decree dissolved NSDA and established:

– Delta Steel Company Limited (DSC)

– Katsina Steel Rolling Mill Company Limited (KSRM)

– Jos Steel Rolling Mill Company Limited (JSRM)

– Osogbo Steel Rolling Mill Company Limited (OSRM)

– National Steel Raw Materials Exploration Agency, Kaduna

– National Metallurgical Development Centre, Jos (NMDC)

– National Iron-Ore Mining Company, Itakpe (NIOMCO)

🎰1980

Wimpey, UK awarded contract to build a Metallurgical Training Complex; Boskalis, Netherlands was contracted to build a river port while Indian forms, Pan African Consultancy Services Ltd. (PACs) & Metallurgical Engineering Consultants (MECON) were awarded Project management consultancy contracts

Other civil engineering works were awarded to Fougerolle Nigeria Limited/Fougerolle SA (raw material plants, coke oven, blast furnance thermal power plant); Bilfinger and Berger/Julius Berger Nigeria Limited (steelmaking shop and rolling mills), and Dumez Nigeria Limited/Dumez Afrique (auxiliary shops, lime and refractory plants)

🎰1983

Inauguration of Light Section Mill (LSM) and Wire Rolling Mill (WRM) of ASP

🎰1984

Light Section Mill (LSM) and Wire Rolling Mill (WRM) ran for a short period and were shut down due to lack of operating capital.

🎰1993

Messrs Engineering Consultants (Nig.) Limited (ECON) appointed consultants to the project to encourage indigenous participation in project management

🎰1996

TPE contract was terminated under Supplement 34 due to lack of funding.

🎰1997

Voest-Alpine Industries Services (VAIS) was assigned the task of elaborate evaluation of the state of the construction of the plant

🎰2000

TPE conducts Technical Audit of ASP.

🎰June 2003

FGN, under the privatization policy of the former President Olusegun Obasanjo administration, granted Messrs Solgas Energy of USA a 10-year Concession for rehabilitation, completion, management and operation of ASP

🎰August 2004

Cancellation of Concession Agreement with Messrs Solgas Energy of USA due to non–performance

🎰August 2004

FGN grants Messrs. GINL a 10-year concession (with option to extend for another 10 years) for the rehabilitation, completion, management and operation of ASP. GINL consequently took over ASP

🎰February 2005

FGN granted GINL a 10-year concession (with option to extend for another 10 years) for rehabilitation, completion, management and operation of NIOMCO. GINL consequently took over NIOMCO, Itapke

🎰February 2005

 

GINL purchased 80% of DSC shares from FGN through a Share Sale and Purchase Agreement. GINL moved into occupation and took management control of DSC

🎰October 2006

FGN granted GINL a 20-year concession in respect of the Central Rail line from Itakpe to Ajaokuta to Aladja

🎰May 2007

FGN entered into a Share Sale and Purchase Agreement (the Ajaokuta SPA) with GINL giving 60% of the issued share capital of ASCL to GINL.

 

🚧🚧NOTE:Effectively, GINL gained ownership control of ASP (60%) & DSC (80%); a 10-year concession with respect to NIOMCO (with option to extend for another 10 years) and a Railway Concession with a duration of 20 years from their effective dates

 

🎰October 2007

Minister of Mines and Steel Development, Alhaji Sarafa Tunji Ishola appointed and inaugurated an Administrative Panel of Enquiry (APE) to look into the activities of GINL in ASCL, DSC and NIOMCO

🎰December 2007

APE submitted its report and recommends the termination of the GINL Concession Agreements with respect to ASP and NIOMCO

🎰February 2008

14th February, FGN through the NRC, terminates the GINL October 2006 Concession Agreement with respect to the Itakpe-Ajaokuta-Aladja Central Railway.

18th February, NRC wrote to GINL withdrawing the termination letter

🎰April 2008

President Yar’Adua cancels the FGN’s 2005 Concession of NIOMCO to GINL due to failure of GINL to show capacity for carrying the concession forward thereby revoking all rights in the Agreement. FGN is also convinced that the agreement was skewed in favour of GINL.

 

🚧🚧NOTE: If FGN had waited 25 more days, it could have taken advantage of clauses 3.2 & 12.1 of Ajaokuta SPA. GINL had an obligation to pay US$162m by 25th May 2008 for the purchase of ASCL shares – and it was apparent that this payment would not have been made by the due date

 

🎰April 2008

GINL took the FGN to the International Chamber of Commerce Court of Arbitration (ICC) claiming huge damages for wrongful termination and breach of Contractual Agreements in respect of ASCL and NIOMCO. The Arbitration dragged for 4 years

🎰December 2012

FGN under former President Goodluck Jonathan takes a view that an out-of-court settlement represented the best option to resolve the logjam with GINL, having taken legal advice that the cost of termination may be substantial. The AGF/MoJ constitutes a team to negotiate with GlNL on behalf of FGN

🎰January-May 2013

FGN negotiating team met three times with GINL resulting in a “Framework Settlement Agreement (FSA)” dated 1 May 2013. Federal Government resolved through mediation and conciliation between its negotiation team and GINL, to re-concession NIOMCO to GlNL for 7 years and take back ASCL from GINL

🎰December 2014

To implement the points agreed to in the Settlement Agreement three further meetings were held. The first was held on 5 June 2014 and the second was held on 30 and 31 July 2014. Paragraph 2 of the minutes of the meeting of 30 and 31 July 2014 required the prompt conclusion of the NIOMCO modified concession agreement

🎰14th June 2016

Not entirely satisfied with the terms of the initial MCA, the Ministry of Mines and Steel Development led by the Minister, Dr. ‘Kayode Fayemi, initiated a modified NIOMCO Concession Agreement (MCA) as an Addendum to the 2013 FSA

🎰July 2016

The Addendum to the MCA, contains the following key advantages to Nigeria:

– While GINL’s claim at arbitration was for a revalidation of original Concession Agreement, the MCA provides for an initial 7-year term (in consideration of the fact that GINL had already utilised 3 years of the original Agreement;

– Concession Fee was improved from 3% in former Concession Agreement to 4% of Annual turnover in the Modified Concession Agreement;

– The Renewal of the Modified Concession Agreement is no longer automatic as in the initial concession agreement;

– While the former Agreement stipulated that the concession was to be undertaken for the purpose of the Concessionnaire, the MCA stipulates that the concession is undertaken for the mutual benefit of the parties;

– Supplying the requirements of Ajaokuta Steel Co. Ltd. as a priority customer, before selling any excess to any other third party customer; and

– FGN is to constitute a Monitoring Committee consisting not more than Seven (7), Two (2) of whom shall be nominated by GINL better than the former which stipulates that the concessionaire shall appoint Three Fifths of the Board and the FGN Two Fifths

🎰August 2016

Framework Settlement Agreement from the Jonathan Administration and the subsequent Modified NIOMCO Concession Agreement, executed by both parties, under the Chairmanship of the Vice President of the Federal Republic of Nigeria and Chairman, National Council on Privatization, Prof. Yemi Osinbajo, SAN

🎰August 2016

Ministry of Mines and Steel Development presents status update on the MCA to House of Reps. Sub-Committee on signed MCA with GINL and NIOMCO, under the aegis of the House Committee on Privatization

🎰September 2016

Ministry of Mines and Steel Development presents status update on Ajaokuta at 2-day interactive Session between House Committee on Steel and Iron & Steel Stakeholders

🎰June 2017

The 2017 Appropriation Act is signed into Law, with N2.096,500,000 budgeted under MMSD for advancing the concessioning of the ASCL” (Reference: FMOSM76314197)

🎰July 2017

MMSD presents at the Public Hearing on the Call to consider the original Builders of the Ajaokuta Steel Plant in the proposed Negotiation for the completion, reactivation and operation of the Project

🎰As at 1st March 2018

• FGN grants GINL the access to the NIOMCO Concession Areas in Itakpe for the conduct of detailed Technical and Financial Due Diligence as stipulated in the FSA

• Both the Federal Government and GINL complete full Tax and Legal Audits of NIOMCO

• GINL has concluded the Due Diligence for NIOMCO

• Messrs Greenwich Trust Limited are engaged as Transaction Advisors on Due Diligence for NIOMCO

• PriceWaterhouseCoopers (PwC) is engaged to review the final inter Company indebtedness and financial audits for Ajaokuta

• Approval of Demobilization Payment to Messrs KOCH for rehabilitation work undertaken to improve NIOMCO Plant after GINL’s exit in 2008

🎰April 2018

FGN expects Technical Audit for Ajaokuta to be completed and the process for soliciting Expressions of Interest from interested Core Investors to commence.

🚧🚧NOTE: On-going Technical Audit is being conducted by in-house personnel at ASCL.

by administrator News