Dangote vs BUA: between the half truths and lies over mining rights

By Obinna Ezugwu

In recent weeks, Nigerians have been treated to series of allegations and counter allegations in what has become a protracted legal tussle between Dangote Group and BUA Cement over ownership of Mining Lease No. 2541 located between the border communities of Oguda-Ubo in Okene, Kogi State and Obu-Okpella in Edo State; from which Mining Lease Nos. 18912 and 18913 “granted” to Edo Cement, formally Bendel Cement and Okpella Cement respectively by the Edo State Government in 1997, and which are now subject of the protracted dispute, were carved out.

Rabiu

Although the case is presently pending before a Federal High Court sitting in Benin City, it seems obvious that certain parties feel it is not in their interest to allow the law to take its course, and have therefore resorted to self help through media and physical attacks. Within this period, physical confrontations at the mining site have led to injury and loss of man hours.

As a consequence of these confrontations, the Kogi State High Court in October 2017, sentenced the Chief Security Officer of BUA Group, Mr Bulus Golit to one year imprisonment without option of fine, for attacking Dangote Group’s officials and workers in the said location.

Interestingly, it is a dispute that predates both the Dangote group which entered the fray in 2016 when it formally acquired the said Mining Lease from AICO Ado Ibrahim & Company Ltd upon the completion of its acquisition process which started in 2014 and BUA which had taken over Edo Cement.

With the acquisition, Dangote Group took over the ML 2541 and therefore, the dispute with BUA. It has been a tale of confrontations as thugs allegedly employed by BUA unleashed attacks on staff of Dangote Group on a number of occasions. But BUA had also accused Dangote of using thugs to disrupt its operations.

Last week, the Ministry of Mines and Steel Development through the Edo State government, in a bid to restore order, instructed both parties to vacate the site to avoid further break down of law and order. The Edo governor, Mr. Godwin Obaseki who conveyed the instruction noted that parties involved in the crisis were in court, therefore, the government had decided that further mining in the community be suspended to allow for peaceful resolution in court.

“We are following the rule of law. There is a dispute, it is not unusual to have disputes over assets but there are laid down methods of resolving disputes of this nature,” the governor said.

“What we understand as a government is that there is dispute or claim between two parties over an existing mining right and the Mining Act of 2007 is quite clear. The Federal Ministry of Mines decides on how to award or issue leases.

“In this particular case, there are multiple claims and they have gone to court. We have a letter from the Federal Ministry of Mines and Power instructing that the party currently mining that particular site should vacate pending the outcome of the decision in court. So the position of Edo State Government today is that the court orders must be obeyed.”

It is a move that may have helped to curtail further physical confrontations, but may do little to end a rift that has lingered for more than a decade. And apparently, more lingering litigation is to be expected. But how did it get to this point?

It was in 1974 that AICO, Dangote Groups predecessor-in-title first acquired the Mining Lease No. 17825 from then Ministry of Petroleum and Mineral Resources, which later in 2007, became Mining Lease No. 2541 when the company’s application for renewal was granted by the ministry and the name was changed. The Ministry having been satisfied with AICO’s application, granted the Mining Lease. No. 2541 for the renewable period of 25 years effective from 1st February 2008 and to expire on 31 January, 2033.

While AICO’s ownership of the said lease continued unchallenged for years, trouble, however, began in 1993 when the then government of Edo State carved out the Mining Lease Nos. 18912 and 18913 and granted same to Edo Cement, feeling perhaps that since those were within the state’s territory, it ought to have control over them.

To provide a background. The Mining Lease No. 2541 is domiciled in Okene, Kogi State, but spreads to Obu Community in Edo. It was therefore, the part that spread to Edo that the state government granted to Edo Cement as Mining Lease Nos. 18912 and 18913 which are now subject of dispute, BUA having acquired same from Edo Cement.

However, the attempt by the Edo government in this regard, was resisted by the Federal Government which made it clear to the state that it had no powers to allocate mining lease as such powers could only be exercised by the Federal Government.

Thus, while BUA’s claim to the said leases 18912 and 18913 is predicated on the fact that it acquired same from Edo Cement, Dangote Group which as pointed out earlier, had entered into an agreement with AICO for the transfer of Mining Lease No. 2541 and following which AICO applied to the Ministry for the approval of the transfer, and in a letter dated February 05, 2016, the Ministry wrote to convey approval for the transfer, is maintaining that the leases were illegal since they were carved out from the Mining Lease 2541 by a state government that had no powers to do so.

And even so, the Federal Government through the defunct Ministry of Petroleum and Mineral Resources in a letter dated 12 November 1993, wrote to the Edo government directing it not to grant the said mining leases as they overlaped AICO’s then existing Mining Lease No. 17825 (which later became 2541).

Aliko Dangote

The continued rift over ownership and legality of the Mining Lease Nos. 18912 and 18913 had prompted a meeting between AICO management and Edo Cement presided over by then Minister for Solid Minerals under Olusegun Obasanjo, Mrs. Oby Ezekwesili in 2006 with a view to resolving the issues. At the end of the meeting, the minister was said to have insisted that the Edo State government had no right to grant the two mining leases and consequently declared them illegal.

The ministry, it is understood, has continued to maintain its stance. It was probably in view of this that the CEO of BUA Group, Abdulsamad Rabiu in a recent letter to President Muhammadu Buhari tilted: “A Cry for Help: Wanton Abuse of Power by a serving minister geared towards sabotaging operations of BUA Cement,” accused top officials of the ministry of attempting to divert the course of justice in the dispute

The BUA CEO in the letter, said: “We are writing to your Excellency, the President of the Federal Republic of Nigeria as our last recourse in view of recent clandestine actions, activities and conduct of a senior minister, the Honourable Minister of Mines and Steel Development (herein referred to as the Minister) in collaboration with Dangote Group and their cohorts capable of undermining peace and security in Edo State and operations in and around our BUA Cement Okpella Plant.”

Perhaps in further bid to whip up sentiments, he accused Dangote group of trying to create a monopoly in the cement industry, citing the Ibeto Cement example among others, which, according to him, would be inimical to the industry.

“The actions of Dangote Group with the collusion and connivance of highly placed officials of government especially the Minister is directed towards destroying the business of BUA cement with the ultimate goal of creating a monopoly in the cement industry in Nigeria and control the entire cement industry and market in the country.

“This with due respect should not be allowed in a democracy and a free market. Allowing such eventual monopoly is not only inimical to the growth of the cement industry and its attendant effect on the cost of construction and housing delivery to the mass of Nigerians, but also the economic wellbeing of the nation as a whole. It is worrisome that Dangote Group with all its visibility and international reputation is displaying such utter lack of respect for and trust in the Nigerian Judiciary.”

In a response, however, Dangote Group in a statement signed by its management, explained that BUA presently has not less than 10 quarry and two mining leases in the same area where it has only the ML 2541 and therefore that the allegation of it wanting to have a monopoly was mischievous.

“BUA Group in its desperation equally wants the public to believe that its survival and operations depend solely on Mining Lease No. 2541 which belongs to the Dangote Group,” it said.

“This is also not true as available records at the Ministry of Mines show that BUA Group currently holds not less than 10 Quarry Leases (Quarry Lease Nos. 9806, 22636, 19143, 8023, 8024, 7961, 21681, 11972 and 9559) and 2 Mining Leases (Mining Lease Nos. 79 and 785) around the general area where Dangote Group’s sole Mining Lease No. 2541 is located and BUA has always been mining on those leases even up till date.

“It is misleading for BUA to falsely accuse Dangote of undermining its operations and attempting to create a monopoly in the Cement Industry in Nigeria, as we have always coexisted peacefully with other competitors in Obajana and Ibese.”

Yet, while BUA had accused Dangote Group of not respecting court order as according to it, “the court has maintained that Status Quo be maintained (This includes BUA’s current ownership of our mines in Edo State),” Dangote Group has in a response clarified that there was no such order and instead, challenged BUA to produce such if it existed.

“There is no Status Quo Order made by any Court that allows BUA to continue mining over the disputed Mining Lease area. In fact there is no Status Quo Order at all,” Dangote Group said.

“It is critical for us to point out that there is currently pending, a Motion for Interlocutory Injunction dated 27 April 2016 seeking to restrain the BUA Group from continuing with its illegal mining activities on the Mining Lease Area but in spite of having been served with this Application and contrary to all tenets of the law which forbid a party served with an Interlocutory Injunction Motion from taking any step in respect of the subject matter of the Suit, the BUA Group has in utter disdain to the Court continued with its illegal mining activities.”

With the federal government intervening to stop mining activities in the area pending the decision of the court, physical attacks may have been curtailed. Nonetheless, the war of words is expected to continue. Apparently, there appears to be an orchestrated attempt by BUA to use the press to blackmail Dangote and rubbish it’s brand. However, the strategy appears to have backfired as investigations by Hallmark reveal that the public largely perceive Dangote as the victims in all this “roforofo” fight.