Bauxite industry poised for a potential $1trn revenue windfall
Ghana’s vast bauxite resource base of over 900 million metric tonnes holds great promise for the country’s economic development. According to the Minister of Lands and Natural Resources, Samuel Jinapor, a comprehensive development of an integrated aluminium industry could create nearly 2 million sustainable jobs and generate an anticipated US$1 trillion in total revenue for the country.
Mr. Jinapor stressed the importance of value addition in unlocking the real benefits of Ghana’s mineral resources. While raw bauxite currently sells for around US$40 to US$60 per metric tonne, refined bauxite (alumina) sells for over US$400 per metric tonne, with primary aluminium produced from alumina fetching up to US$2,000 per metric tonne. Building a fully-fledged integrated aluminium industry would therefore require planning and long-term investment, with emphasis on local value addition.
The Ghana Integrated Aluminium Development Corporation (GIADEC) has been working to develop a master-plan for the industry since 2019, focusing mainly on the upstream industry – mining, refining, and smelting. The master-plan has led to the launch of a 4-project agenda in 2021, aimed at expanding the existing mine at Awaso and retrofitting VALCO to smelt alumina produced in the country. Plans are also underway to develop three additional mines in Nyinahini, Mpasaaso, and Kyebi.
Mr. Jinapor lamented Ghana’s failure over the years to develop an integrated aluminium industry, which has deprived the country of much-needed revenue. A fully-integrated aluminium industry would not only create jobs and generate revenue but also build local expertise through knowledge and technology transfer, and contribute to the government’s industrialization agenda and infrastructural development.
Furthermore, as the host of the African Continental Free Trade Area (AfCFTA), Ghana stands to benefit greatly from a fully-integrated aluminium industry, with finished aluminium products having access to a market of over one billion people. The potential for export earnings and foreign investment cannot be overstated.
However, the development of an integrated aluminium industry will not be without challenges. For one, it will require significant investment in infrastructure, including power and transport. The regulatory framework and environmental impact of mining and refining operations must also be carefully considered. Additionally, the global aluminium market is highly competitive, with major producers such as China and Russia dominating the industry.
While the development of an integrated aluminium industry in Ghana holds great promise for the country’s economic development, it will require significant investment and careful planning. The potential benefits of value addition, job creation, and revenue generation cannot be overstated. With the right policies and investments in place, Ghana can position itself as a major player in the global aluminium industry and reap the benefits for years to come.
