Gov’t outlines two-phase plan to revamp VALCO; transformation to cost $600m

The Ministry of Lands and Natural Resources has outlined a two-phase plan to turn around operations of the Volta Aluminium Company (VALCO), with an estimated cost of $600 million for its full transformation.

Chief Executive Officer of the Volta Aluminum Company, Mr. Robert Makila Sambian, disclosed this when addressing the media on the progress of VALCO regarding what is needed to turn around the struggling state-owned smelter.

According to him, the turnaround strategy is divided into two distinct phases, with Phase One focusing on optimisation and Phase Two focusing on transformation.

“Of course, there are two phases. The phase one is the optimisation, and the phase two is the transformation. So with the optimisation, the estimates we have made so far, I think is in the order of 70 million dollars,” he stated.

He explained that Phase Two, which is the major transformation phase, also has two approaches under consideration.

“There are seemingly two in one kind of phases there. There is one aspect we just look at Greenfield. Dig, phase gap and construct new pot line state-of-the-art technology inhibited by existing structures,” he said.

The second approach, he noted, involves modernising the existing pot lines.

“There is another approach where you would want to modernise the existing pot lines,” he added.

Mr. Sambian revealed that VALCO currently has only two pot lines in operation, while three pot lines remain idle, with parts of the idle lines cannibalized to sustain the operational ones.

“As we are striving between the two pot lines operating currently, there are three pot lines that are idle. In fact, we have cannibalised parts of those pot lines to support the presence of the existing two pot lines, which are not even fully populated,” he disclosed.

He clarified that the $600 million estimate is for the comprehensive revamping of all pot lines.

On the issue of strategic investors for the smelter, Mr. Sambian confirmed that negotiations are underway following Cabinet approval.

“It is true that the Minister of Lands and Natural Resources has put together a team following cabinet’s approval for us to negotiate and present a report to the cabinet to take a decision on getting investments into VALCO,” he said.

The government has in recent years reiterated its commitment to revive VALCO as part of its Integrated Aluminium Development agenda, which seeks to leverage Ghana’s bauxite resources to feed the smelter and drive industrialization.

VALCO, established in 1967, has over the decades faced operational challenges, largely due to power supply constraints and lack of investment, resulting in the shutdown of most of its pot lines.