*Document reveals 10 yrs renewal with GINL
24 August 2016, Sweetcrude, Lagos — Less than one month after the Federal Government signed a new agreement to reclaim Ajaokuta Steel Company and concession the National Iron Ore Mining Company, NIOMCO, Itakpe, to Global Infrastructure Company, SweetcrudeReports can authoritatively reveal that the Minister of Solid Minerals Development, Dr. John Olukayode Fayemi copied and pasted an agreement dated December 12, 2014, and addressed to former President Goodluck Jonathan.
The document obtained by our correspondent titled HAGF/SH/2014/Vol.2/121 prepared by the office of the Honourable Attorney General of the Federation and the Federal Ministry of Justice (under the leadership of Mohammed Bello Ajoke) which was addressed to former President Goodluck Jonathan is the same agreement signed on August 1, 2016 witnessed by Vice President Yemi Osinbajo, Minister of Solid Minerals Development Dr. Kayode Fayemi, Pramod Mittal of Global Infrastructure Nigeria Limited and representatives of London Court of Arbitration.
The copy and paste are so obvious that mistakes made in 2014 agreement were repeated in the 2016 agreement.
For instance, page 9 section, 7.1.2 of Adoke’s 2014 concession agreement contains a typographical error stating COMPLETE instead of COMPETE. The same error was repeated on August 1, 2016, concession agreement in page 9 section 7.12, meaning that it was Adoke’s deal Fayemi executed.
After the signing of the August 1, 2016, agreement, Dr. Fayemi said that he negotiated a better deal for Nigeria whereby GINL will pay an increase concession fee from three percent turnover to four percent turn over to the Federal Government. This is contained in page 7 section 5 under Concession Fee. However, the same terms are contained in Adoke’s memo to former President Goodluck Jonathan in page 3 (b) under An increase in the Concession Fee.
Another evidence of copy-paste and element of deceit on the part of Dr. Fayemi was his comment before and after the signing of the August agreement is that he said saved the country from paying $500 million to $700 million to GINL which he described as a substantial achievement. However, on page 2 and 3 under (a) Zero Damage of Adoke’s memo to former President Goodluck Jonathan, he (Adoke) said he was able to negotiate zero damages and a waiver of $525 million on behalf of Nigeria.
Contrary to the seven years period given to GINL to complete their initial 10 years concession agreement, page 6 section 4 of August 1, 2016, agreement and Adoke 2014 agreement under COMMENCEMENT and DURATION, there is an option to renew the concession agreement for another 10 years with GINL.
More worrisome is that August 1, 2016, the agreement contains terms asking Nigeria to pay for the deterioration of equipment which occurred during the eight years pendency of the case in arbitration.
In page 6 section 4A 1 under CONDITION PRECEDENT states “The Obligations of the Parties under this Agreement are conditioned upon the performance of the following matters (each, a “Condition Precedent”) by the Grantor to the reasonable satisfaction of the Concessionaire and or waiver thereof by the Concessionaire:
(a) provision by the Grantor of full access to the Concession Area and all related documentation and information for the conduct of the Due Diligence and the preparation of the Due Diligence Report;
(b) rehabilitation of all plant, equipment and other facilities comprised in the Concession Area to the state in which such facilities were as at 1 April 2008, including remediation of all loss of material, deterioration of equipment, theft, loss of design drawings, spare parts or consumables provided that the Concessionaire may undertake the performance of this Condition Precedent upon commercial terms to be agreed by the Parties after the completion of the Due Diligence.
(c) full hand over to the Concessionaire of the Concession Area, including all uncompleted facilities, spares and other assets comprised therein, and all design document drawings, catalogues, manuals and other related documents
By implication, page 6, section 4A (b) means that Nigeria is also going to pay to rehabilitate NIOMCO back to the state it was in 2008, pay for any missing documents and design etc.
The commercial agreement to settle the condition precedent is that if Nigeria fails to undertake the repairs, GINL shall do so and pass the bills to Nigeria. An estimate of the rehabilitation cost arrived at €500m (500 million euros). 8. Section 7 which spans from page 9 to 10 contains obligations of Grantor (Nigeria) to GINL in the course of their operations.
7.1.14 of the agreement states that any competent authority in Nigeria or any part thereof will directly, or indirectly, levy or impose on Concessionaire and each such company shall be exempt from any fiscal charge arising out of the generation and/or consumption of power and energy made available from captive sources. This means that NIOMCO under GINL will not pay electricity bill
Also, 7.1.15 of the agreement states that Nigeria has the responsibility for the payment of salaries, allowances and all emoluments of the staff of NIOMCO.
7.2 (b) added that the Grantor (Nigeria) hereby agrees to facilitate all necessary lawful exemption from Fiscal Charges required to enhance the profitability of the Concession. This means that GINL is to benefit from ALL fiscal incentives, tax exceptions and even export charges when selling Nigeria’s ore overseas but will sell Iron Ore to Ajaokuta Steel Company Limited at the normal commercial price as stated in page 13, 8.1.22 of the agreement.