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Nigeria revokes sale of firms to Global Steel

Nigeria revokes sale of firms to Global Steel
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First Published: Fri, Apr 04 2008. 12 47 AM IST
Updated: Fri, Apr 04 2008. 12 47 AM IST
Lagos, Nigeria: Nigeria said it is revoking a deal that gave control of two state-owned steel firms to Global Infrastructure (Nigeria) Ltd, or GINL, saying the company failed to meet performance targets.
GINL is part of Global Steel Holdings (GSH), promoted by the Mittal family, which has also promoted India’s Ispat Industries.
Deals that handed over Ajaokuta Steel Co. Ltd and National Iron Ore Mining Co. Ltd to Global Infrastructure (Nigeria) Ltd, “were largely skewed in favour of the concessionaire to the detriment of” Nigeria, President Umaru Yar’Adua’s office said in a statement.
Global Infrastructure committed several breaches, including failing to pay agreed fees while stripping and exporting plant and equipment, said the statement.
The deals were signed in 2004 under Olusegun Obasanjo, Yar’Adua’s predecessor.
In a statement on Thursday, GSH said it had “not been receiving the promised support from the Federal Government of Nigeria (FGN).” It added that the firm had spent $500 million in reviving the plants. The statement said the company had asked the Nigerian government to “resolve the differences” in February and “invoked international arbitration proceedings....in April”
“Without any reference to such arbitration, FGN unilaterally by its letter dated 1st April 2008 rescinded” the agreement, the statement added.
“We are still talking to the government...,” said Vinod Mittal, managing director of Ispat Industries, in New Delhi.
Mint’s Maitreyee Handique in New Delhi contributed to this story.
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First Published: Fri, Apr 04 2008. 12 47 AM IST