Pramod Mittal, the younger brother of billionaire Lakshmi Mittal, is getting a helping hand from Nigerian taxpayers. The Nigerian government has agreed to pay his company almost $500 million to settle a contract dispute, providing a possible way out of financial distress. Pramod’s firm, Global Steel Holdings Ltd. (GSH), won a settlement tied to a Soviet-era steel plant in Nigeria that has absorbed over $7 billion in public investment without producing any metal. This settlement represents about 1.5% of Nigeria’s foreign reserves and is the latest twist in the saga of the Ajaokuta steel mill, which has been a black hole for public funds.
Pramod’s involvement in the Ajaokuta project began in 2004 when he was awarded contracts to manage and later buy the steel mill. However, his company faced legal challenges, including a lawsuit from a US company and the cancellation of contracts by the Nigerian government. Despite these challenges, a settlement was reached last year, providing Pramod with a route out of insolvency. The Nigerian government has justified the agreement, stating that it frees the state to pursue its ambitions for the Ajaokuta site.
The Ajaokuta steel mill, located on the banks of the Niger River, has been a symbol of corruption and poor governance in Nigeria. The project has yet to produce any metal despite the massive public investment. The settlement with Pramod’s company has sparked debate over the future of the steel mill, with some advocating for its revival while others question its viability.
Pramod’s steel ambitions have taken him to various countries, including Bosnia, Bulgaria, Libya, Zimbabwe, and the Philippines, where his companies accumulated significant debts. His business ventures have been marred by legal battles, bankruptcies, and allegations of corruption. Despite these challenges, Pramod has continued to pursue international acquisitions and investments.
The settlement with the Nigerian government has provided Pramod with a lifeline, allowing him to address his financial obligations and potentially revive his business prospects. However, the controversy surrounding the Ajaokuta steel mill and the history of Pramod’s business ventures raise questions about the long-term sustainability of his operations.
The Nigerian government’s commitment to the Ajaokuta steel mill and its potential to create jobs reflects the complex dynamics of the steel industry in the country. As the saga of the steel mill continues, it remains to be seen how the settlement with Pramod’s company will impact the future of the project and the broader steel sector in Nigeria.