Business News of Tuesday, 5 December 2017
Keen for a sizeable slice of Ghana’s $450bn bauxite deposits, the Akufo-Addo government has indicated it will soon introduce a new law aimed at building an integrated aluminium industry.
Parliament has been signalled to expect a new integrated Aluminium and Bauxite Development Authority Bill before it, to do what several governments have struggled to do after Kwame Nkrumah laid the foundations in the 60’s to make Ghana an aluminium-exporting powerhouse.
The New Patriotic Party (NPP) government has turned to its own economic czar, Vice-President Dr. Mahamudu Bawumia to lead efforts to mine, refine, smelt and fabricate it.
Of particular importance is the yet to be exploited bauxite deposits at Tano Offin Forest reserve in the Ashanti region.
Already the Vice-President has been to China to offer 5% of Ghana’s bauxite for $20bn.
But government is wrestling with local firm Exton Cubic for rights to exploit deposits in Kyekyewere, Mpasaso and Kyirayaso in the Ashanti region.
The firm owned by Ibrahim Mahama, brother to former President Mahama had its mining lease revoked September 4.
Dr. Mahamudu Bawumia, addressing a roundtable discussion on adding value to the primary product, made it clear government plans to get serious with bauxite exploitation.
The Vice President also indicated that government wants to depart from simply exporting bauxite – something the Ghana Bauxite Company even struggles to do
The big cash is in selling it as processed alumina, he pointed out. Bauxite goes for $60 per metric tonne but process it and it can fetch as much as $2,000 tonnes.
Vice President Dr. Bawumia noted Ghana can be getting revenue from bauxite for as long as 100 years if more than two million metric tonnes of alumina is produced.
Bauxite was first discovered in 1914 in Ghana by Sir Albert Kitson. However, it has not been exploited to their fullest potential, with just half of its capacity being mined.
Moreover, there have been major reductions in the amount of bauxite that has been shipped from Ghana.
In 2011, there was a significant drop of 22 % as compared to the previous year and consequently, there has been a decline in the sales figures from the export of bauxite.
In addition, the failure of Ghana Bauxite Company in transporting bauxite to the Takoradi Port, situated 240 kilometres away from the company’s location in Awaso, has proved detrimental for its operations.
The Western Rail Lines of Ghana are in a deplorable condition that is leading to heavy losses for the company over the past few years as it continues to use the more expensive mode, roads, to carry the ore to the port.