Ghana reportedly cancels a $1.2 billion bauxite agreement and considers a worldwide cooperation

Ghana has canceled a $1.2 billion bauxite lease with local company Rocksure International, according to three people with firsthand knowledge of the situation. Instead, Ghana is looking to partner with a large foreign company to access one of West Africa’s largest reserves.

A Chinese company or Dubai-based Emirates Global Aluminium (EGA) are possible partners, according to two of the sources.

The termination represents a strategic shift for Ghana, which has struggled to draw consistent investment in mining and refining facilities despite possessing the seventh-largest bauxite reserves in the world, estimated at 900 million metric tons.

The central Ghanaian Nyinahin Hills, which contain over 376 million tons of bauxite—the raw material used to make aluminum—were under Rocksure’s lease.

Based on this, Rocksure and the state-owned Ghana Integrated Aluminium Development Corporation (GIADEC) formed a joint venture to construct a mine and refinery for alumina. Rocksure controlled 70% of the Asante Bauxite Company JV, while GIADEC and the government owned 20% and 10% of the company, respectively.

According to a 2019 Supreme Court decision, the lease is null and void because parliament never approved it.

The Ministry of Lands and Natural Resources had notified Rocksure that “by the Exton Cubic ruling, without ratification, you have no lease,” according to one of the individuals and others.

With reference to ongoing negotiations, GIADEC declined to comment. Attempts to reach the lands ministry were not answered.

Rocksure likewise chose not to respond.

The firm was merely informed that GIADEC was leaving the joint venture, according to another source, and was not formally informed of the termination.

A global leader in bauxite production, Guinea, outpaces Ghana, Africa’s leading producer of gold, in terms of bauxite production.

GIADEC is currently aggressively pursuing additional investors, such as EGA and a number of Chinese companies, according to the GIADEC source.

Due to delays in constructing a refinery, EGA lost its mining license in Guinea. In June, EGA and GIADEC signed a letter of understanding to investigate prospects in Ghana.

In an email answer to questions, EGA told Reuters that it is now evaluating the technical and commercial parameters of a potential partnership to jointly develop bauxite assets in Ghana.

According to EGA, no legally enforceable contract had been signed, and no timetables, resource estimates, or investment amounts had been revealed.

According to a third source, in order to protect its Guinea license, EGA once contemplated investing in Ghana in 2022 but decided against it. “They didn’t want Guinea to feel they were shifting focus to Ghana,” a source told me.

EGA stated that obtaining bauxite from Ghana is in line with their goal of expanding their supply base in order to increase their output of aluminum.

GIADEC plans to start off-take and extraction from Block B in the first quarter of the next year. Although no agreements have been finalized, the initial source claims that discussions with possible partners are advanced.

The first source put it this way: “We’re looking at all options to see which one serves the interest of the nation.”

From a record 1.7 million tons this year, the Ghana Chamber of Mines predicts that the country’s bauxite production would increase to 2 million tons in 2025.