VALCO Not for Sale – GIADEC CEO

The Chief Executive Officer of the Ghana Integrated Aluminium Development Corporation (GIADEC), Reindorf Twumasi Ankrah, has dismissed claims that the Volta Aluminium Company (VALCO) is being sold.

 He insisted that government is implementing a long-standing policy of pursuing a strategic partnership to revive the struggling aluminium smelter.

Mr Twumasi Ankrah made the clarification at a media engagement, where he provided historical and operational context to ongoing discussions surrounding VALCO’s future, amid heightened public debate and speculation.

He explained that upon assuming office on March 2, 2024, a review of documents he inherited revealed that attempts to attract private investment into VALCO date as far back as 2019.

As part of those efforts, KPMG was commissioned to undertake a comprehensive audit of the smelter and propose options for its revival and modernisation.

According to him, despite VALCO’s imposing physical infrastructure, its output has remained far below expectations. The smelter was originally designed to produce 200,000 metric tonnes of aluminium annually, but current production averages only about 35,000 metric tonnes per year.

“For more than 15 years, VALCO has operated at a loss,” he said, describing the situation as unsustainable.

Mr Twumasi Ankrah attributed the company’s challenges partly to its ownership history. He recalled that when VALCO was established in 1967, it was wholly owned by private firms Kaiser and Reynolds, with no government stake.

That structure remained until 2004, when Kaiser faced bankruptcy in the United States and sold its 90 per cent shareholding to the Government of Ghana. Reynolds subsequently divested its remaining 10 per cent stake, making VALCO fully state-owned by 2008.

“From the point government assumed full ownership and management, the company began a steady decline,” he noted, citing findings from the KPMG audit.

He revealed that the smelter was completely shut down in 2022, with operations halted and workers sent home. Shutting down and restarting an aluminium smelter, he explained, is far more expensive than keeping it running, even when it is operating at a loss.

By January 2025, VALCO’s debt had risen to about US$450 million, owed to institutions such as GRIDCo, the Ghana Revenue Authority and the Tema Development Corporation. These liabilities, he said, placed enormous pressure on both the creditors and the government.

“The plant was not contributing to GDP and government lacked the resources to continue injecting funds into it,” he explained, adding that a request was therefore made for the plant to remain shut to allow some financial breathing space.

Mr Twumasi Ankrah stressed that the concept of bringing in a strategic investor predates the current administration, noting that it was considered under previous governments, including during the first term of President John Dramani Mahama and later under former President Nana Akufo-Addo.

He said KPMG proposed five options for reviving VALCO, with the preferred option being the introduction of an equity partner with the technical expertise and capital to co-own and manage the smelter alongside government.

In May 2022, government approved the search for such a partner and engaged PricewaterhouseCoopers as transaction adviser.

That process, however, stalled due to unresolved issues related to power supply arrangements and the treatment of existing stock.

Learning from that experience, GIADEC and its partners restructured the approach. A new 12-member inter-ministerial committee was constituted, drawing members from the Ministries of Finance, Energy, Trade and Lands, as well as officials from VALCO and GIADEC. The committee was tasked with reviewing investor proposals and making recommendations to the board.

Mr Twumasi Ankrah disclosed that the board has approved the committee’s recommendations, which have been forwarded to the sector minister and are now awaiting Cabinet approval to formally engage shortlisted investors.

He reiterated that the process is strictly a strategic partnership and not a sale of VALCO.

“VALCO is not for sale. What is being pursued is a co-ownership arrangement that successive governments have agreed is the most viable option to revive the company,” he said

Under the proposed plan, production would be restored to the original 200,000 metric tonnes per year and expanded to at least 300,000 metric tonnes within 36 months. The first year would target output of 100,000 metric tonnes, followed by further increases over the subsequent two years.

Achieving this target, he explained, would require retrofitting all six production lines at the plant, many of which are over 60 years old and highly inefficient. The estimated investment required is about US$600 million, to be provided by the strategic partner in exchange for equity.

He revealed that some potential investors, including a Chinese firm, declined participation after concluding that the same amount could be used to build a new smelter with full ownership. However, a consortium of investors has expressed interest in partnering with government, citing local content requirements and the advantages of shared risk and reward.

Some of these investors, he added, have also indicated willingness to pay government for the equity stake they acquire, in addition to injecting capital to modernise the facility.

Mr Twumasi Ankrah warned that further delays could lead to additional job losses. VALCO’s workforce has declined from about 1,800 employees in the 1990s to roughly 650 today, with numbers likely to fall further if production does not improve.

He said President John Dramani Mahama has been clear that government does not have US$600 million to invest directly in VALCO, making private-sector partnership the only realistic option.

“If nothing is done urgently, VALCO will shut down completely and everyone will go home,” he said, adding that government is therefore engaging credible partners in the national interest.

He assured the public that the process is transparent and aimed at restoring VALCO as a viable industrial asset capable of creating jobs, supporting downstream industries and strengthening Ghana’s aluminium value chain.