Union cautions ministry on planned privatisation of Ajaokuta, Itakpe ore mining coys



Uba Group

The Nigerian Union of Mine Workers has warned the Ministry of Mines and Steel Development to “tread with caution in the ongoing privatisation of Ajaokuta Steel Company and the National Iron Ore Mining Company, Itakpe,” alleging that the process is flawed and must be reviewed by the incoming administration to ascertain its credibility and conformity with extant laws.

“All actions of the Ministry of Mines and Steel Development (MMSD) and the Infrastructure Concession Regulatory Commission (ICRC) should be painstakingly reviewed by the in-coming Administration as we are not sure of whose interest the Ministry is serving,” the Union said in a statement, on Wednesday.

In the statement signed by the National President of the Union, Hamza Mohammed and titled ‘Ajaokuta Steel Plant and National Iron Ore Mining Company, Itakpe Concession – This rush will crash the train,’ the union called on President Muhammadu Buhari to urgently intervene in what it described as a hasty attempt to privatize ASCO and NIOMCO.

The Union made reference to advertisements in ThisDay and Punch newspapers of 21st April, 2023 in which the Federal Government, through the Ministry of Mines and Steel Development and the Infrastructure Concession Regulatory Commission, called for bids from organizations interested in investing in Ajaokuta Steel Plant and the National Iron Ore Mining Company on a public private partnership model.

The statement said, “This present government is in Transition Mode, and has about 33 Days to hand-over to a new Administration. What it could not do in eight (8) years, should not be hurriedly and improperly done in less than 30 days.

“Mr. President should urgently intervene; his good name is being soiled, as it is bandied around that everything done is directed by him.

“It is easy to recall that in a rush to inject private hands in the Ajaokuta Steel Plant and National Iron Ore Mining Company, the Federal Government in 2003 hurriedly signed a 10-year concession agreement with Solgas Energy of USA. This concession only lasted for a little more than one year, with Solgas throwing in the towel due to lack of capacity.

“In 2005, another 10-year concession agreement was hurriedly entered into with Global Steel Holdings owned by Pramod Mittal without due diligence by the relevant Government Agencies.

“The concession agreements were solely handled and messed up by the same Ministry of Mines and Steel Development with unverified claims that it was a directive from the then President Obasanjo.

“Following the inauguration of the Late President Musa Yar’adua’s Government, and the complaints of Nigerians, the agreement was reviewed by the Engr. Inuwa Magaji Commission of Inquiry. The outcome of that inquiry led to the Government terminating the second Concession agreement.”

The union recalled that the consequences of the triple actions of hurried privatization, lack of due diligence and the actions of the new government “resulted in Nigeria paying over $400,000,000 USD to GINL as an out of Court settlement through a process that lasted 15 years.”

The union advised the Olamilekan Adegbite – led management of the Ministry of Mines and Steel Development to thread with caution, stating that “the ministry is treading the same old path again with the current efforts, and this time around, the processes are not only haphazard but against the laws of the Federal Republic of Nigeria.

“The process should follow the due processes in line with the laws of the country.”

Stressing the importance of adhering to laid down rules in the privatization of ASCO and NIOMCO, the union argued that “No law should be circumvented, as doing so would demean national pride and nationhood,” adding that ‘”the six-week threshold stipulated by law be the ground rule and must be respected and adhered to.”

It further argued that the advertisement for public procurement fell short of the stipulated six weeks.

“Section 68 of the Finance Act 2020 which clearly amended Section 25, Sub Section (2) (a) and (b) of the Public Procurement Act, 2007 states that advertisements for Parastatals and Ministerial Tenders should not be less than four (4) weeks from the date of publication, if the process is within the thresh-hold of the Ministry. If, however, it would require the consideration and approval of the Federal Executive Council, the time line is six (6) weeks.

“We want to put it on record that this very process falls within the threshold of the six (6) weeks provision, and not four (4) weeks contemplated in the Advertisement,” the Union said, adding that “sections 2 to 5 of the ICRC Act confirm our observation above and is strengthened by Sections 55 and 56 of the Public Procurement Act, 2007 on disposal of Public Assets.


“While the Nigerian Union of Mines Workers is not against private investments in the steel sector, we will not hesitate to draw the attention of the Federal Government and indeed Nigerians to the rush and speed of the process as it might put the two companies back into the same mess that President Muhammadu Buhari tried hard to bring them out of.”