The Ghana Integrated Aluminum Development Corporation (GIADEC) is confident of attracting over US$6billion private capital to actualise a harmonised aluminium industry.
The country envisioned an integrated industry soon after independence, but GIADEC is now stepping up efforts to develop a comprehensive aluminium industry in line with the country’s renewed commitment to use its bauxite endowments to become an automobile and industrial hub within the continent.
It is also banking on the integrated aluminium development plan to unlock the potential of Ghana’s construction, pharmaceutical, electric cable manufacturing and packaging industries.
To achieve this, GIADEC – a state-owned entity that controls smelter firm VALCO and the country’s bauxite resources – is seeking private partners to, among other things, exploit bauxite deposits, establish refineries and retrofit VALCO into a state-of-the-art plant.
The plans will position Ghana to import raw bauxite from its West African neighbours for refining purposes. South Africa boasts the continent’s only modern refinery although Africa is endowed with enormous bauxite resources.
With emphasis on value addition, GIADEC’s Chief Executive Officer, Michael Ansah, said the firm is conscious of Ghana’s past mistakes in natural resource exploitation and is determined to take a different trajectory. “So, what we have done is that we have broken this up into four projects to make sure that we can bring investors who can take the risk. So we are not putting all the risk in one basket; we are diversifying the risk,” he said.
The first of four projects is the expansion of an existing mine at Awaso and development of the country’s first refinery, which is currently being carried out with a local partner. The second is to develop a mine at Nyinahin and Mpasaso, in the Ashanti Region, along with a refinery solution. Under this, a contract has been already signed with Rocksure International Limited, a wholly- Ghanaian owned firm.
Under the third project, GIADEC is seeking a partner to develop a second mine in the Nyinahin area with a refinery solution.
The final project is modernisation and retrofitting of the VALCO smelter that will lead to an expansion of the plant’s capacity. “Now, if we execute all these we’re looking at about US$6billion worth of investment into these four projects – all private sector sourced; so, no government investment is going into this,” he said.
A well-integrated aluminium industry could spur other sectors of the economy, bringing real value to an economy that has long suffered from raw material exports. “The value this will bring to the economy in terms of economic transformation, the whole industrial transformation agenda and everything we’re doing is hugely significant,” Mr. Ansah further stated.
The masterplan, the CEO reiterated, is strategically designed and defined to diversify risk and deliver real value to the state and prospective private partners. Explaining further, he said: “It is important that we understand the four projects together constitute everything we are doing; none of the projects stand individually, though they are being executed with different partners”.
VALCO as a pivot
The Volta Aluminium Company (VALCO), the country’s only smelter, has operated largely without any real linkage to the economy over the years, as it has had to import all of its alumina due to lack of a refinery. A smelter extracts aluminum from bauxite -sedimentary rock. Although Ghana has been producing bauxite, which is the principal ore of alumina needed by VALCO, it is exported in its raw state… just like the country’s other natural resources.
However, with an integrated aluminium industry in the offing, the plant will take centre-stage under the new GIADEC strategy; acting as a pivot between the upstream industry and the downstream sector.
“We have obtained Cabinet’s approval to identify and engage a strategic partner. To revamp this plant, we need around US$700million of investment; and we are not scrapping the entire plant but replacing the lines that produce the aluminium – we are replacing certain equipment. We are refurbishing the other supporting plant infrastructure they have there to bring it to world-class standard, so that with new technology, with new equipment, we will be able to produce efficiently. VALCO has existed without any linkages at all in Ghana, but this one makes it an integral part of what we’re doing under the GIADEC umbrella,” Mr. Ansah emphasised.
Although Mr. Ansah sees development of the aluminium industry as crucial to the country’s industrial aspirations, he admitted that the four projects will take time to be fully implemented.
