Nigeria’s 2022 settlement of the long-running Ajaokuta Steel Company and National Iron Ore Mining Company (NIOMCO) dispute with Global Steel Holdings Limited has continued to attract questions over how the country moved from declaring the matter resolved to agreeing to pay hundreds of millions of dollars.
In September 2022, then Attorney-General of the Federation and Minister of Justice, Abubakar Malami, announced that the Federal Government had reached a settlement with Global Steel, reducing the company’s claim from $5.258 billion to $496 million.
Malami described the agreement as a 91 per cent reduction and said it had brought an end to a “long-standing contractual dispute”. The settlement agreement reportedly took effect on 19 August 2022 following mediation under the International Chamber of Commerce’s Alternative Dispute Resolution framework.
But the settlement raised questions because previous governments had already announced the recovery of the Ajaokuta assets.
From concession to controversy
The dispute dates back to the 2004–2007 period, when Global Steel obtained several concessions and share-purchase agreements covering Nigeria’s steel industry, including Ajaokuta Steel, Delta Steel, iron-ore reserves and parts of the railway network.
The contracts were terminated in 2008 by the Umaru Yar’Adua administration, after which Global Steel commenced arbitration proceedings at the ICC Court of Arbitration in Paris.
The legal battle subsequently produced several attempts at settlement.
In 2013, then Senator representing Kogi West, Smart Adeyemi, said the Goodluck Jonathan administration had recovered Ajaokuta Steel without “any attendant financial obligation whatsoever”, according to TheCable.
Four years later, in September 2017, then Minister of Mines and Steel Development Kayode Fayemi also announced that the Federal Government had resolved the outstanding issues surrounding Ajaokuta and had regained ownership of the facilities.
The Buhari administration had earlier approved a modified concession agreement with Global Steel in 2016, allowing the company to retain NIOMCO in Itakpe. Fayemi later said the agreements had been executed and that the Federal Government had retrieved full ownership of the mills.
Then came another claim
Despite those earlier declarations, Global Steel resurfaced with a renewed threat of arbitration in 2020.
According to the Federal Government, the company threatened to pursue damages of more than $10 billion over the terminated contracts. Its claim was subsequently put at $5.258 billion before the 2022 settlement was reached.
The Federal Government ultimately agreed to pay $496 million.
Malami defended the agreement, saying the settlement protected Nigeria from potentially much larger liabilities and returned Ajaokuta and NIOMCO to government control.
However, the sequence of events — from the reported recovery of the assets without financial obligations, through subsequent declarations that ownership had been fully restored, to the eventual $496 million settlement — has continued to prompt questions about the legal and financial history of the Ajaokuta concessions.
TheCable subsequently reported that Global Steel had withdrawn claims for compensation in 2013, raising further questions about the basis of the later settlement. It also reported that allegations surrounding the original concessions, including claims of asset stripping and breaches of contractual terms, remained unresolved.
The Ajaokuta saga therefore remains more than a story about a steel plant. It is a complicated trail of concessions, cancellations, settlements, ownership claims and billions of dollars in potential liabilities — with the $496 million agreement representing another major chapter in a dispute that Nigeria had previously appeared to have already settled.
