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Aluminium smelter could generate millions for government, expert says
By Eugene Davis
the prices of aluminium are higher and are above 1,900 per tonne.
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He was speaking with journalists on the margins of a two-day downstream aluminium industry workshop at the Royal Senchi Hotel under the auspices of GIADEC together with its partner, ODI, independent global a airs think tank, formerly known as the Overseas Development Institute.
The bene ts range from about US$200m to half a million dollars(U$500m) in terms of value chain, that is only for the smelting but not the entire value chain.”he explained.
The economic bene ts that are expected to accrue the country when it fully develops an aluminium smelter could range from two hundred million(200m) to half a million dollars(500m), a senior Research O cer at International Economic Development Group, ODI, Mr. Derrick Abudu has projected.
Ghana’s government through Ghana Integrated Aluminium Development Corporation (GIADEC) is preparing a draft policy framework in conjunction with its partners such as
VALCO, GBCL, Rocksure and MoTI.
For Mr. Abudu, investments are needed especially in the downstream sector, saying “yes we have done something, the rst one has to do with potential revenue, so if we invest x amount, what potential revenue can we get, or if we subsidise smelting or cost of power what potential can we get and to that e ect we are looking at the range of about half a million dollars if we provide some kind of subsidy and
Ghana has a roadmap which spans from now till 2025, with sectored targets, which seeks to achieve an energy deal that will subsidize the power cost for the sector and have a competitive cost structure and by 2030 once all these foundation policies are in place, it is expected to attract enormous investment into the sector and by 2035 will achieve much higher targets, Mr. Abudu noted.
Investments needed
Further he stated “we need investments but the reason power is important is because it makes about 32percent of the cost of production, alumina which is a key input is more expensive but the thing with alumina is that everyone buys it at the global market price so you have no control, what you have got control is the cost of power, you can vary that, the cost of primary aluminium is cheap and that is what is supplied to the downstream and once they have a cheap input then you can have incentive structure -once I have got a cheaper input coming in, I have the incentive to be able to rope in more investments because that will mean my returns are much higher.”
On what ODI has done in terms of job creation in the downstream sector, he said “we have done some quantitative analysis and we looking at a bare minimum of about 20,000 jobs generated if it comes into fruition, we also have bene ts in export –so these are exports in terms of higher value added to downstream products so like nished products; aluminium doors, cables, sinks and the bene ts will also come in
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Story continued from page 12 that form and import replacement.
At the moment, we import significant proportions, so Ghana imports most of these items and replacing them will be very valuable for the country.”
Valco is the second largest smelter in Sub-Saharan Africa and is a major producer of primary aluminium. Today, the company produces approximately 50,000 tonnes of aluminium per annum out of its installed capacity of 200,000 tonnes per annum.
Currently, the company is 100percent owned by GIADEC. As the only existing smelter in the country, Valco is integral to the development of the Integrat- ed Aluminium Industry in Ghana. Under Project 4, GIADEC seeks to partner a strategic investor to upgrade the plant’s equipment and technology to improve e ciency and increase its capacity to 300,000 tonnes per annum.
The VALCO smelter is currently running on two out of its ve potlines and producing about 50,000 tonnes of primary aluminium per year, out of its installed capacity of 200,000 tonnes. The other 3 potlines have been shut down, and beyond repairs due to lack of maintenance and repairs over the years. VALCO has the capacity for direct employment of over 1,200 Ghanaians but currently employs 705 Ghanaians.
