Nigeria has signed a $496m agreement to settle a claim by Indian firms Global Steel Holdings (GSH) and Global Infrastructure Steel over the termination of a contract to upgrade the country’s steel plants.

The agreement was signed under the alternative dispute resolution framework of the International Chamber of Commerce, as reported by Bloomberg News.

In a document verified by his spokesman, Nigerian Justice Minister Abubakar Malami that the move had ‘rescued’ Nigeria’s steel industry from complex disputes.

Between 2004 and 2007, Global Steel acquired rights to five major concessions and share purchase contracts in the country, including access to its iron ore reserves and central railway network.

In 2008, Nigeria cancelled an agreement that gave Global Infrastructure (Nigeria), a unit of GSH, the control of two state-owned steel firms, Ajaokuta Steel and the National Iron Ore Mining Co.

The government claimed that the agreement was biased in favour of the concessionaire to the country’s detriment.

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Later that year, Global Steel challenged the revocation at the International Chamber of Commerce, Court of Arbitration in Paris.

Reuters quoted Malami, who led the negotiations, as saying that Nigeria had managed to reduce the original claims of $5.258bn.

Malami added: “I pay tribute to President (Muhammadu) Buhari for his dedication to resolving this problem and wrestling back a crown jewel of our national industrialisation plans rather than leaving the endeavour to the future administration to deal with.”

Said to be Africa’s largest steel complex, Ajaokuta Steel is intended to help Nigeria reduce its dependence on oil.

The plant is due to be commissioned and is expected to have the capacity to produce up to five million tonnes of steel a year.

It has been under construction since 1979 and its completion has been a key focus for President Muhammadu Buhari, who is due to leave office in May next year.