The Nigerian Steel Saga: Clearing the Air on Misleading Reports
We would like to address the recent reports in Bloomberg and other media outlets regarding the Nigerian government’s payment of US$496 million to Global. It is disappointing that the media did not contact us or the UK-based mediator appointed by the International Chamber of Commerce (ICC) ADR Unit, Paris, Mr Phillip Howell-Richardson, before releasing their stories.
The truth of the matter is that we were wronged by the Nigerian government after operating from 2004 – 2008. We were dispossessed and subjected to a lengthy settlement process from 2013 – 2022, ultimately receiving only the equivalent of our sunk costs with interest in 2023. It is regrettable that Bloomberg has allowed itself to be used by our creditors to tarnish our reputation in this prolonged ordeal.
Bloomberg, through its mining and metals reporter William Clowes, has made six false assertions. We can demonstrate that these assertions are indeed false.
Firstly, Bloomberg claimed that Ajaokuta Company never produced steel. However, following our concession in 2004, billets were rolled out as rebars and sold across Nigeria for construction purposes. Financial accounts of Ajaokuta Steel Company Ltd would have shown figures under “Sales” had Bloomberg checked.
Secondly, Bloomberg stated that Ajaokuta was given to us to manage and buy in 2004. This is incorrect. We were given a concession to manage Ajaokuta in 2004, and in May 2007 its majority shares were sold to us to expand production.
Thirdly, Bloomberg reported that after the Ajaokuta concession was entered in 2004, the Nigerian government terminated the contract three years later. This is false. In May 2007, the Nigerian government entered a share sale agreement pursuant to which we acquired 60% of the shares of Ajaokuta Steel Company Ltd. Months later, all our rights were terminated in five long-term contracts.
Fourthly, Bloomberg claimed that “seemingly out of the blue” the government announced the $496m payment. This is incorrect. We filed arbitration in 2008 and went through settlement attempts under the ICC ADR framework while the arbitration was kept in abeyance.
Additionally, it was falsely claimed that we were “systematically cannibalising” assets from Ajaokuta and this was the reason for termination of the share purchase in 2008. The allegation of asset cannibalisation was a false mischaracterisation of the commercial network arrangement that involved the cooperation of Delta and Ajaokuta in billet to rebars steel production.
Lastly, Bloomberg assumes that money spent running a plant from 2004 to 2008 ceases to exist as sunk costs. This indicates either financial illiteracy or mischief.
We had expected a minimum figure of $901m (the PWC recommendation), not the $496m figure obtained from our financial predicament. We only accepted the buyout due to our dire financial state – a fact that the FGN obviously capitalised on.
The buyout mediation was conducted transparently under the ICC ADR framework led by one of the UK’s foremost mediators, Mr Phillip Howell-Richardson. It lasted from January 2020 to August 2022, during which the Nigerian government appointed PwC to advise it on our $5.2 billion claim.
In conclusion, we urge the public and the media to seek the truth behind the Nigerian Steel Saga. It is crucial for the real story to be told.
