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The Federal Government says it has agreed to pay $496 million to settle a multibillion dollar claim by Global Steel Holdings Limited over the control of Ajaokuta Steel Company.

Attorney-General Abubakar Malami said the government will pay the company $496 million instead of $5.258 billion demanded by the firm, to settle the dispute. A statement by Mr Malami’s spokesperson, Umar Gwandu, says the deal was reached under the alternative dispute resolution framework of the International Chamber of Commerce.

Located in Kogi State, Ajaokuta was meant to catapult Nigeria to industrialization like many countries were doing decades ago. It was built by the Soviets between 1979 and the mid-1990s.

Ajaokuta has never produced steel as the project was never completed. The project has gulped billions of dollars since inception.