'Ruling on Alscon may damage Russia-Nigeria relations'
“The decision by the Nigerian Supreme Court on Alscon (Aluminum Smelter Company of Nigeria) may damage investment and economic cooperation between Russia and Nigeria,” the Ministry said in a statement.
On Monday Nigeria's Supreme Court ruled against the sale of the former state-owned Alscon to Russia's RUSAL, the world's largest aluminum producer, saying it should have gone to US-based firm BFI Group.
"The appellant's (BFI Group) bid he sum of $410 million and was preferred by the respondent. The appellant was declared winner of the auction conducted on 14th June 2004," the Supreme Court ruled.
BFI Group tendered for Alscon in 2004, but was later disqualified by the Nigerian regulator because of alleged bribery. In 2007 Rusal acquired a 75% stake for around $250 million. Currently Rusal owns 85%, while the Nigerian government holds the rest of the asset. Rusal’s assets in Nigeria include an aluminum smelter with annual capacity of 120,000 tonnes, a gas-fired power station and a port.
The Nigerian authorities started a probe into the Alscon deal in 2009 as lawmakers believed the aluminum firm was worth up to $3 billion and was sold at a cut price. They also claim Rusal paid only $130 million of the agreed $250 million for Alscon.
However, Rusal said on Monday the ruling between BPE and BFI Group cannot affect Rusal's ownership of Alscon shares, as it concerns the claims of BFI Group against BPE of Nigeria.
Though the plant in Nigeria is considered Rusal’s largest asset in Africa, experts say, revoking the deal would hardly affect the company. Alscon’s production accounts to a tiny 15,000 tonnes or 0.36% of Rusal’s output. Rusal says that high operating costs as well as disruptions in gas supply keeps the plant from working at full capacity.