Those who have been keeping up with the news about the Aluminum Smelter Company of Nigeria (ALSCON) and its privatization would likely agree that the ongoing legal disputes over its ownership have gone on for too long. These disputes are harming the country’s national interests, economic growth, efforts to lower iron and steel prices, and job creation.

Amidst this ownership disagreement, the Bureau of Public Enterprises (BPE), which represents the Federal Government and all Nigerians, has been working hard to ensure transparency, fairness, and Nigeria’s economic well-being. Unfortunately, some people are determined to prevent the company from reaching its full potential. Instead, they attack and try to manipulate BPE and its managers for their own gain.

Nigerians must ask themselves: where their patriotism is, in allowing this viable company to remain stagnant for almost two decades while the country suffers. The ongoing legal battles and financial complications paint a troubling picture. Despite this, BPE continues to navigate these challenges with resilience and a commitment to the rule of law, while others continue to oppose progress, denying Nigerians the benefits they deserve.

ALSCON, located in Ikot Abasi, Akwa-Ibom State, was established with an investment of US$3.2 billion by the Federal Government and was commissioned in October 1997.

The initial shareholders were: the Federal Government of Nigeria (FGN) and the Ferrostaal of Germany with a 70% and 30% shareholding ratio respectively. Subsequently Reynolds Incorporated acquired 10% of Ferrostaal’s shareholding in ALSCON. Consequently, the shareholding structure became FGN (70%), Ferrostaal (20%), and Reynolds (10%).

The plant had a nameplate capacity of 196,000 tonnes of aluminium ingots annually. ALSCON was established to utilise and enhance Nigeria’s huge gas reserves and to discourage gas flaring, which could be re-channelled to generate electricity for the smelter plant via a gas-to-power model.


ALSCON commenced operations on 15th October 1997 but had to cease production on 6th June 1999 due to the withdrawal of Reynolds, the technical partner, because of irreconcilable differences between Ferrostaal and Reynolds, inadequate working capital, insufficient gas supply, and lack of dredging of the Imo River to facilitate the importation of raw materials and exportation of aluminium ingots (finished product).

When the Federal Government decided to privatize ALSCON in 2004, two firms, BFIG and UC RUSAL (Dayson), were both prequalified to proceed to the financial bid opening stage, having been adjudged to both be technically competent to acquire 77.5% shares of ALSCON. UC RUSAL was later disqualified for submitting a conditional bid, which was against the terms of the transaction.

As the preferred bidder, BFIG failed to pay the initial deposit within the stipulated timeframe, leading to the termination of the transaction by the National Council on Privatization (NCP). With no reserve bidder, the NCP adopted the Willing Seller/Willing Buyer strategy to privatize ALSCON.

The National Council on Privatisation (NCP) established an Ad-Hoc Committee, chaired by the former Minister of Power and Steel, Senator Liyel Imoke. The committee included Mr. Akin Kekere-Ekun, the past Chairman of the Technical Committee of the NCP, and Dr. Julius Bala, another former Director General of the BPE, as members. Their mandate was to negotiate with Dayson on the basis of willing seller/willing buyer.

In 2006, when UC RUSAL/Dayson raised the issue of dredging, the BPE had obtained offers from various companies for dredging the Imo River between the range of $140 Million and $500 Million. UC RUSAL/Dayson offered to dredge the Imo River for the sum of US$120 Million.

Consequently, the BPE and UC RUSAL/Dayson signed an addendum to the SPA (Addendum No.1) on 14th November 2006 (Annexure 2) whereby it was agreed that the dredging would be undertaken by UC RUSAL/Dayson and the cost of this ($120 Million) was to be offset from the bid sum of $250 Million, thus UC RUSAL/Dayson only paid $130 Million for ALSCON.

In response to the termination of the transaction with BFIG, the company filed a lawsuit claiming that the offer had been revoked before the expiration of the payment deadline. However, both the Federal High Court and the Court of Appeal ruled against BFIG, leading them to appeal to the Supreme Court.

In 2012, the Supreme Court ordered specific performance, directing the BPE to execute the mutually agreed SSPA with BFIG. However, BFIG failed to accept the SSPA, and after the expiration of the agreement execution period, BPE terminated the transaction for non-compliance.

This termination has reignited the long-standing controversy surrounding the privatization of ALSCON. BFIG maintains that they are the rightful owners based on the Supreme Court’s order, while BPE argues that BFIG’s non-compliance justifies the termination of the transaction.

These are the key takeaways from the ongoing saga surrounding the Aluminum Smelter Company of Nigeria (ALSCON) and its associated legal and financial intricacies:

ALSCON Ownership: UC RUSAL/Dayson both won the initial bid for ALSCON but the Supreme Court later voided the purchase. They initiated arbitration and eventually settled with BPE, securing full legal ownership and an indemnity clause. BFIG challenged the sale to UC RUSAL, leading to protracted legal battles. Ultimately, they failed to pay the required sum as per the Supreme Court judgment and lost their claim.

Arbitration and Addendum: Two separate arbitrations were instituted. Dayson initiated further arbitration over BPE’s actions, ultimately reaching an amicable settlement through Addendum No.2. BPE honoured the sale, extended the indemnity clause, and agreed not to challenge the initial arbitration award. Dayson’s request for adjournment, the BPE suspects dilatory tactics and applied for discontinuation, which the tribunal granted.

Gas Supply Issues: The government initially agreed to subsidize gas supply to ALSCON at $0.30/MMSCF, aiming to support the Aluminium industry. The government failed to consistently pay the subsidy, eventually leading to gas supply disruption and plant shutdown. Unpaid subsidy to SPDC accumulated to N1.8 billion as of December 2013.

In August 2020, the National Council on Privatisation (NCP) approved a proposal to pay off ALSCON’s legacy debt to SPDC resulting from the unpaid subsidy by the Federal Government. The approved payment plan consists of an initial payment of 60 percent, followed by 20 percent payments within six and twelve months, respectively. The approval was forwarded to the Minister of Finance, Budget, and National Planning for implementation. The Ministry of Finance reviewed the approval and passed it on to the Budget Office of the Federation. The Budget Office requested ALSCON’s management to submit a business plan through the BPE, which they did. We learnt that the payment process has been initiated in the office  of the DG-Budget .

UC RUSAL, the operator of the plant, has claimed that operating above the concessionary gas rate given to them during privatisation is not financially viable. To address this, the Bureau and the Minister of Mines and Steel Development took steps to have the aluminium industry recognized as a strategic industry eligible for purchasing gas at a concessionary rate.

However, the implementation of this approval was complicated by the passage of the Petroleum Industry Act (PIA), which transferred the responsibility of approving gas pricing to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). To ensure the implementation of the concessionary rate previously approved, the Bureau engaged with NMDPRA and other relevant stakeholders to grant ALSCON the required concession.

Despite their classification as a strategic industry, ALSCON rejected the concessionary gas rate and requested a lower cost, which was deemed to be below the production cost of gas producers. UC RUSAL was asked to provide their financial assumptions, but they have shown no intention to operate the plant and continue to utilize various excuses to delay or postpone its operation.

An Inter-agency Committee was convened on 3rd August 2023. At the meeting, UC RUSAL/ALSCON’s management provided their financial model indicating an all-inclusive price of gas at US$1.00. This will be nearly impossible for any local gas supplier to accept, more so, given that the transportation cost for gas is now US$0.997/MMSCF.

UC RUSAL/ALSCON’s management is not willing to entertain the offer of US$1.725/MMSCF despite FGN having gone to such lengths to facilitate a concessionary price of gas for ALSCON. UC RUSAL/ALSCON continues to maintain that any price above its proposed all-inclusive rate of U$1.00/MMSCF, is not economically viable.

Legal Issues:

The Supreme Court directed the Bureau of Public Enterprises (BPE) to execute a Share Purchase Agreement (SPA) with BFIG, the preferred bidder for ALSCON. However, the process faced setbacks as BFIG attempted to renegotiate terms. Subsequently, BPE terminated the transaction for non-compliance.

This triggered a ripple effect, leading UC RUSAL to initiate arbitration proceedings at the London Court of International Arbitration (LCIA) over ALSCON’s legal ownership. A consent award was reached, affirming BPE’s compliance with the Supreme Court judgment and granting legal title to Dayson Holding Ltd.

Dayson pursued another arbitration, citing BPE’s failure to indemnify against BFIG’s claims and a disputed demand for $120million. Addendum No. 2 was executed, extending indemnity and confirming ALSCON’s sale. The facility was handed over to UC RUSAL on 27th February 2007.

Despite these efforts, BFIG’s dissatisfaction persisted, rejecting the SPA due to alleged annexure issues. BPE terminated the transaction, citing non-compliance with the Supreme Court judgment.


The Federal Government should investigate the controversial €100 million Deutsche Bank transfer (code ACKS 0298-2020). Until this matter is resolved, there cannot be a final close for the sale of ALSCON

It is important to consider whether the DC Rusal has produced any significant quantity of Aluminum or made a difference in the Nigerian Aluminum and labor market. If they are not producing anything, then why hold on to such an asset? RUSAL has failed to operate the plant since taking over ALSCON in 2007 (17 years ago) due to various reasons, including lack of adequate investments and cessation of gas supply due to accrued debts.

On the other hand, BFIG had initiated another legal action at the Federal High Court. This led to the decision of the Court of Appeal, which confirmed and sought to enforce the orders of the Supreme Court. The court ordered that: BPE (Bureau of Public Enterprises) provides the mutually agreed SPA (Share Purchase Agreement) Exhibit BPE 1 for execution by the parties. This will enable BFIG to pay the agreed 10 percent of US$410 Million (i.e., the sum of US $41 Million) within 15 working days from the date of the execution of the SPA, by the agreement dated 20/5/2004. The remaining 90 percent balance of the bid price shall be paid within 90 calendar days, as ordered by the Supreme Court.

The BPE fulfilled its obligations as ordered by the Supreme Court and the Court of Appeal when it provided the mutually agreed SSPA (Share Sale and Purchase Agreement) dated 20th May 2004, which was duly executed by the parties in March 2019.

What is important to Nigerians is that the Federal Government should investigate the activities in ALSCON, confirm the claim of payment of 100 Million Euros to the government and put a high-powered committee that will ensure that ALSCON works again.

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