Rusal and Nigerian Government Come to Terms on Joint Ownership of Alscon
02 February 2018 by Staff
The Nigerian government and Russian Federation aluminium giant U. C. Rusal reached an agreement regarding the sale of the Aluminium Smelter Co. of Nigeria (Alscon). The out-of-court agreement ends ten years of uncertainty between the two parties over the plant’s ownership and future.
According to Reuters, Rusal and Nigeria’s mines ministry agreed to a split in ownership of the plant, with the government holding a minority interest to Rusal’s majority.
Kayode Fayemi, Minister of Mines and Steel Development, told the media that his government retained 20 percent of the plant and Rusal obtained the remaining 80 percent. However, a Rusal spokesperson is cited by Reuters as asserting that its ownership is 85 percent to the government’s 15 percent.
In any event, what is clear is that the settlement paved the way for the plant’s restart, which the parties agreed will happen in the next six months. Potlines at the plant were last operated in 2012.
“We feel that apart from the legal issues, Rusal are actually best placed to be able to reactivate the plant,” Fayemi explained.
The disagreement over the plant’s ownership has its roots in a 2012 decision by Nigeria’s supreme court invalidating an attempted sale of Alscon to Rusal. The court found that a 2007 sale to Bancorp Financial Investment Group took precedence, as the government didn’t have the authority to cancel it. The parties opted for mediation, leading to this week’s decision.
“The Alscon sale dispute is one of the long drawn ownership battles that has impacted Nigeria’s ability to stick to contracts,” opined Cheta Nwanze of Lagos’ SBM Intelligence.
“Now that the dispute has been resolved, the smelter can return to production which will obviously have a knock-on effect on various industries in the economy.”
Commissioned in 1997, Alscon’s plant is comprised of an aluminium smelter, a port facility, and a gas-fired power stationed. Located on the banks of the Imo River in the southern state of Akwa Ibom, the facility employs around 150 workers.