The article discusses the ongoing discussions between Rusal and the Nigerian government to potentially restart the Alscon smelter, which had been suspended a decade ago due to financial losses.
It is well-known that Rusal, a prominent player in the aluminum industry from Russia, is in intense discussions with the Nigerian government.
The reason? To breathe life back into the decade-long dormant Alscon smelter in Nigeria.
In 2012, a venture producing 22,000 tonnes of aluminum, accounting for 11% of its annual output capacity, came to a sudden halt in 2013.
This was attributed to a dwindling gas supply and a significant decline in aluminum prices.
Why the Suspension?
Let’s backpedal to the earlier part of 2013.
The inability to secure a steady gas supply and a steep decline in aluminium prices forced Rusal to hit the pause button on operations at the plant.
The financial losses were too significant to bear, and the smelter lay in a suspended state for nearly a decade.
The Crucial Summit
The Russia-Africa summit in St. Petersburg aimed to enhance cooperation between Russia and African nations.Petersburg became a potential turning point for Alscon.
Nigeria’s Vice President, Kashim Shettima, met with Rusal’s management to discuss the possible revival of Alscon’s production.
Reuters released an official statement from Shettima’s office, highlighting the crucial role of restarting the plant for the common good.
“Restarting production at this plant sooner is vital for everyone.
Let’s back our words with action; the Nigerian people deserve better,” emphasized Shettima.
Rusal’s Position
Famous for its record production of 3.8 million tonnes of aluminium in 2022, Rusal acknowledged the ongoing negotiations but refrained from providing further details at this stage.
Currently, Rusal owns an 85% stake in Alscon, with the remaining shares held by the Nigerian government.
Confirming the talks, a Rusal statement from Russian news agency TASS stated, “We confirm that we are holding negotiations with the government of Nigeria on the resumption of Alscon plant operations.”
Background
Vice President Kashim Shettima, representing President Tinubu at the ongoing Russia-Africa summit hosted by Russia’s President Vladimir Putin, made an impassioned plea to Russian companies.
He urged them to capitalize on the tremendous potential in Nigeria and consider investing beyond commodity trading.
“Given the current geopolitical situation, we should explore real-time investments along with commodity trading.”
We urge Russian companies to leverage Nigeria’s immense potential as the largest market in Africa and invest in strategic sectors to maximize benefits.”
The Story of Alscon
Founded in 1989, ALSCON came into being through a joint venture involving the Nigerian government and two technical partners.
It commenced operations in 1997.
Nestled in Ikot Abasi, Akwa Ibom state, the company was supposedly privatized to UC Rusal in 2004 for around $250 million.
However, a 2012 Supreme Court ruling declared UC Rusal not the true owner of the company, leading to an immediate reclamation by the Bureau of Public Enterprises (BPE) and transfer to the real owner- BFIG.
The revival of the Alscon smelter holds immense potential for both Rusal and the Nigerian government. Not only will it contribute significantly to Nigeria’s economy, but it will also secure a steady supply of aluminium for Rusal.
Currently, all attention is focused on the ongoing negotiations, with optimism for an imminent agreement.
for more info do follow /piggybank.ng
FAQs
Why did Rusal suspend operations at the Alscon smelter?
Rusal suspended operations due to unreliable gas supplies and a drop in aluminium prices.
Who currently owns the majority stake in Alscon?
Rusal holds an 85% ownership stake in Alscon.
What is Vice President Kashim Shettima’s stance on the Alscon smelter?
Shettima emphasizes the importance of resuming operations at the plant for everyone’s benefit.
When was Alscon incorporated and when did it start its operations?
Alscon was incorporated in 1989 and began operations in 1997.
Who is the declared true owner of Alscon according to the 2012 Supreme Court ruling?
According to the ruling, BFIG is the true owner of Alscon.
Discover more from FHC-NG.COM
Subscribe to get the latest posts sent to your email.