• Friday, July 19, 2024
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Nigeria woos Russia with Ajaokuta Steel, ALSCON revival


St. Petersburg, Russia || In a bid to revive the Ajaokuta Steel Mill project and the Aluminium Smelter Company of Nigeria (ALSCON), two moribund assets, the largest economy in Africa has proposed a partnership with the Federation of Russia at the second Russia-Africa Summit in St Petersburg, Russia.

At a sideline panel session themed “Russia–Africa: Prospects for Energy Cooperation,” Gabriel Aduda, Permanent Secretary Political and Economic Affairs Office, Office of the Secretary to the Government of the Federal Republic of Nigeria said talks have been positive so far on the deals.

Aduda said that Nigeria has initiated talks with Russia to partner in reviving the Ajaokuta Steel Mill which has also been moribund for years.

According to him, the focus of his discourse Friday, was to bring back Russian cooperation and partnership to resuscitate the plant that was already 94 percent complete and bring it back on board.

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“Yesterday, July 27, 2023, we had a very long discussion with United Company (UC) RUSAL and we’re looking at the revitalisation of our aluminium plant in Nigeria that has been moribund for about upwards of 10 to 15 years.

“We think that engaging with UC RUSAL who have the expertise from this end will help us to develop that and bring the plant back on board,” he said.

According to the permanent secretary, reviving the plant will lead to socioeconomic gains for the partners. “The moment we do that, then you can see profits for both of us.

“UC RUSAL will make it money and Nigeria, of course, will create jobs to benefit from what all other side contracts bring like direct and indirect jobs, and reduction in migration to Europe, etc,” he said.

“The resuscitation starts later this year and right now we are looking to finalise agreement on cash cap, which should be done in the coming weeks.”

Read also: Putin writes-off $23bn to further cozy up with Africa

Brief history of ALSCON incorporation and privatisation

ALSCON was incorporated in 1989 with the Federal Government of Nigeria (FGN), Ferostaal AG of Germany and Reynolds of America as share-holders on an equity holding of 70 percent, 20 percent and 10 percent, respectively.

The company was established in order to utilise and enhance the country’s gas reserve and to discourage gas flaring, since the natural gas being flared would be needed to generate electricity for the smelter plant.

Other objectives for which ALSCON was established was to establish a self-sustaining company, provide employment to Nigerians and create an avenue for transfer and acquisition of technology etc.

In September 2002, BPE commenced the privatisation process of ALSCON. Five companies expressed interest in ALSCON; namely: ALCOA Incorporated of America, Glencore AG of Switzerland, UC RUSAL of Russia, ALCAN of Canada and Ferostaal AG of Germany.

Most of the above-mentioned companies shortlisted for the ALSCON bid failed to submit technical and financial bids; for that reason the privatisation process was aborted.