New bauxite deal to boost value addition

The Ghana Integrated Aluminium Development Corporation (GIADEC) has reached a partnership deal with Mytilineos Energy and Metals toward building an alumina refinery in the country.

The agreement pertains to Project 3A, one of four projects under the Integrated Aluminium Industry (IAI) projects at Nyinahin-Mpasaaso in the Ashanti Region. Under terms of the agreement, Mytilineos – a Greek company – will spearhead the development of a bauxite mine and oversee construction of a cutting-edge alumina refinery.

This deal represents a departure from the conventional practice of exporting raw bauxite, signalling an end to decades of raw exports from Ghana. Instead, the focus will shift toward refining locally mined bauxite, with the resulting alumina serving as a crucial feedstock for the Volta Aluminium Company (VALCO) smelter.

At a ceremony to sign the agreement, President Nana Akufo-Addo underlined that building IAI in Ghana will have a transformational impact on the local economy along with its potential for wealth creation.

“We have mined and exported bauxite in its raw form since the 1940s, and have never achieved the goal of value addition or integration despite considerable efforts made by successive governments,” the president said.  

Given this, he lauded the progress GIADEC has made since its inception, working to leverage 900 million metric tonnes of bauxite and other holdings including the 100 percent takeover of VALCO.

Furthermore, he urged the board and management of GIADEC to continue driving the integration of bauxite-aluminum value chains by ensuring all aspects are developed.

President Akufo-Addo said the selection of a credible and leading global metallurgy and energy company, Mytilineos S.A., as GIADEC’s partner on Project 3A will pave the way for more investments from other global giants in the domestic aluminium industry.

To sustain the gains made so far, Mr. Akufo-Addo charged GIADEC and its partners to continue upholding world-class environmental standards in their operations.

“I am specifically aware of GIADEC’s unwavering commitment to world-class environmental standards, which informed their choice for the Project 3A selected partner. As such, government and relevant state agencies must ensure the strictest adherence and commitment to all national and global environmental and social performance standards,” he stated.

Mytilineos S.A. is said to have been selected through a three-round investor engagement process, launched by GIADEC in 2019, which attracted the interest of approximately 40 companies from across the world.

The project is expected to produce a minimum five million metric tonnes of bauxite and about two million tonnes of alumina annually.

Also speaking at the ceremony, Minister of Lands and Natural Resources, Samuel Abu Jinapor, said government will continue creating the right investment climate for businesses to thrive and provide the needed support toward the development of a fully functional IAI in Ghana.

Chief Executive Officer-GIADEC, Michael Ansah, on his part emphasised that executing Project 3A and all other projects under the IAI will contribute significantly to the economy.

He said: “GIADEC’s absolute requirement for Project 3A, and the approach presented by our partner, focuses on value addition as well as the social benefits that will accrue through creating over 1,500 jobs over time.

“We will ensure collaboration with local subcontractors, prioritise local talent and provide training programmes to align with cultural and environmental considerations,” Mr. Ansah said.

He further stressed that Mytilineos S.A. will be required to, first, undertake a mineral resource estimate (MRE) to validate and define the bauxite resources before constructing a mine and a refinery.

Meanwhile, Mr. Ansah noted that GIADEC will continue to drive the development of a vibrant downstream sector that takes full advantage of the ever-growing need for aluminium and aluminium-related products – especially the fast-growing domestic automobile industry.

Chief Strategy and M&A Officer-Mytilineos Energy & Metals, Elenos Karaindros, in a statement noted that his outfit has been a longstanding partner of Ghana, leveraging the country’s extensive experience in numerous power projects.

“We have gained a robust and unique understanding of the country’s energy sector, as well as its people and local environment. Today, we are pleased to embark on the next chapter of this enduring collaboration,” he stated.

He added that as operator of the EU’s vertically integrated aluminum complex, Mytilineos brings expertise across the value chain – prioritising value creation for all partners involved.

 

The post New bauxite deal to boost value addition appeared first on The Business & Financial Times.

Read Full Story