VALCO Not for Sale: Government Pursues Strategic Partnership to Revive Smelter – GIADEC CEO

Introduction

In a decisive move to revitalize Ghana’s aluminium industry, the Ghana Integrated Aluminium Development Corporation (GIADEC) has clarified that the Volta Aluminium Company (VALCO) is **not for sale**. Instead, the government is actively pursuing a strategic partnership model to restore the struggling smelter to its former operational capacity. This announcement comes amid growing public speculation and debate about the future of VALCO, a critical asset in Ghana’s industrial landscape.

Key Points

Background

VALCO, established in 1967, was originally a wholly private enterprise owned by Kaiser and Reynolds. In 2004, Kaiser sold its 90% stake to the Government of Ghana due to bankruptcy, followed by Reynolds selling its remaining 10% by 2008. Since then, the company has been fully state-owned.

Over the years, VALCO has faced mounting challenges. The smelter was designed to produce 200,000 metric tonnes of aluminium annually but currently operates at only about 35,000 tonnes—roughly 17.5% of capacity. For over 15 years, VALCO has operated at a loss, leading to its complete shutdown in 2022. The financial burden has grown to approximately US$450 million in liabilities owed to institutions like GRIDCo, the Ghana Revenue Authority, and the Tema Development Corporation.

Analysis

The decision to pursue a strategic partnership rather than a sale reflects a broader government strategy to retain national control over critical industrial assets while leveraging private sector efficiency and capital. GIADEC CEO Reindorf Twumasi Ankrah emphasized that the idea of bringing in a strategic investor is not new—it has been considered under multiple administrations, including those of Presidents John Dramani Mahama and Nana Akufo-Addo.

KPMG’s audit recommended five options for VALCO’s revival, with the preferred approach being the introduction of an equity partner with the technical expertise and financial capacity to co-own and manage the smelter. PricewaterhouseCoopers was subsequently engaged as the transaction advisor. However, the process stalled due to unresolved issues related to power supply and stock retention.

Learning from these setbacks, GIADEC established a 12-member inter-ministerial committee to review investor proposals and make recommendations. The committee includes representatives from key ministries and VALCO itself. The board has approved the committee’s recommendations, which are now awaiting Cabinet approval to formally engage shortlisted investors.

Practical Advice

For stakeholders and potential investors, the government’s approach offers a unique opportunity to participate in Ghana’s aluminium value chain while ensuring local content and shared risk. The proposed partnership model allows investors to contribute capital and expertise without taking full ownership, preserving national interests.

For the public and employees, it is crucial to understand that this is not a privatization effort. The government remains committed to maintaining a significant stake in VALCO, ensuring that the benefits of revival—such as job creation and industrial growth—accrue to Ghanaians.

FAQ

Conclusion

The government’s decision to pursue a strategic partnership for VALCO marks a pivotal moment in Ghana’s industrial policy. By choosing co-ownership over outright sale, the state aims to balance economic revitalization with national control. The success of this initiative could not only restore VALCO to its former glory but also strengthen Ghana’s position in the global aluminium market. As the process moves forward, transparency and stakeholder engagement will be key to ensuring that the revival of VALCO delivers lasting benefits to the country.

Sources

– Ghana Integrated Aluminium Development Corporation (GIADEC) Act, 2018 (Act 976)
– KPMG Audit Report on VALCO
– Statements by GIADEC CEO Reindorf Twumasi Ankrah
– Official communications from the Government of Ghana