Lands Minister backs calls for strategic investor to revive VALCO

Government officials are exploring the possibility of bringing in a strategic investor to boost the Volta Aluminium Company (VALCO) back to full production levels. Emmanuel Armah-Kofi Buah, the Minister for Lands and Natural Resources, has cautioned that VALCO's current state is unsustainable and operating far below its full capacity.

Mr Buah emphasized during a policy discussion in Accra that the smelter is bleeding due to its underutilized infrastructure and needs significant investment to revitalize the company and Ghana's aluminium industry ambitions.

VALCO possesses five potlines, but only a portion of the facility is currently operational. The government faces challenges in allocating limited public resources, making it impractical to sustain the company indefinitely. The priority should be to make VALCO productive and commercially viable, rather than simply preserving its existing structure. The minister's stance aligns with broader government efforts to enhance Ghana's minerals sector and maximize the value derived from the country's natural resources.

VALCO remains a crucial element in Ghana's plan to establish an integrated aluminium industry by linking bauxite mining, processing, and downstream manufacturing. Restoring VALCO's capacity could have far-reaching effects, including job creation, industrial development, and the expansion of Ghana's aluminium value chain. However, the proposal for a strategic investor may prompt questions about the nature of the investment arrangement, including capital investment, potline rehabilitation, future capacity, employment, ownership, local participation, and power costs.

The government will need to align any partnership with its broader objective of developing an integrated aluminium industry. The VALCO board chairman has countered the government's assessment, asserting that VALCO's financial situation is better than suggested. This differing viewpoint signals ongoing deliberations on how best to steer the future of the state-owned smelter.