Public Agenda (Accra)
Ebenezer Hanson
15 December 2008
Accra — Third World Network-Africa (TWN-Africa) says the Aluminium Authority and Integrated Aluminium Industry Bill, currently before Parliament is fraught with provisions which when passed will have grave implications for the mineral sector.
Dr. Yao Graham, Co-ordinator of TWN disclosed that the Bill intends to introduce a new institution solely for bauxite. He said this novel creation is likely to introduce some confusion between it and the Minerals Commission in terms of oversight responsibility.
"We find it difficult to understand why bauxite alone would be isolated for such prominence when there is no history of deficiencies in the current institutional arrangement", he stressed.
He argued that the establishment of this institution is a recipe for corruption since it would be an unaccountable public institution. This is because this new authority will hold both final regulatory and commercial functions in relation to bauxite.
What's worse, he said the Government has not been forthcoming with answers on the many lingering questions over the Sale and Purchase of VALCO, which is the basis for the establishment of the said Bill.
Under the proposed Bill, the Aluminium Authority will have the power both to undertake the evaluation of applications and to make grants in respect of bauxite rights. Also, decisions of the Authority may be exempted from the ratification power of Parliament. Again, under the Bill, the Authority is expected to hold not less than 25% equity in a joint venture company to mine bauxite.
Dr. Graham therefore stressed the need for Parliament to conduct thorough due diligence on the subject.
"Government has made a claim that the partnership between it and a consortium of International Aluminium Companies provides an opportunity for the establishment of an integrated aluminium industry. Even as this partnership is a major driver to this Bill there is no clarity where government stands in the sale of agreement of its 70% shares in VALCO", says Dr. Graham.
"We all heard media reports that purported buyers of government's shares in VALCO denied having negotiated such a sale agreement with them. It is over a month now government has not yet come out to deny the reported denial of the supposed buyers of VALCO. Meanwhile, there have been frantic efforts to rush decisions on the Bill", he points out.
It will be recalled that the Brazilian mining giant, CVRD, also known as VALE, the second largest mining company in the world and Norst Hydro Aluminium Company of Norway reportedly denied any purchase of shares in VALCO.
"The question remains who are International Aluminium Partners?" asked Dr. Graham. According to him, TWN's investigations have revealed that the address of Martin Lopez who signed the Agreement for International Aluminium Partners is a Trust Company in the British Virgin Island. He regretted that both Parliament and Government have not offered explanation to an agreement that was profoundly defective.
The Minister for Trade, Industry, Private Sector Development and PSI, Hon. Papa Owusu-Ankomah, in the memorandum accompanying the Bill to Parliament, explained that the need for an Authority to deal with the bauxite business dates back to 1962, when Ghana entered into an agreement for the construction of the Akosombo Dam and the Building of an aluminium smelter at Tema.
Initially, he said, the alumina processed by VALCO was procured from outside. The Master Agreement, however, gave the option to the company to mine and process the country's bauxite deposits in the hope that at a future date the alumina processed in the smelter would be produced in the country. "This hope has now become a reality since the oil and gas discovery," he empahsised.
Kaiser recently old its entire shareholding of 90% in VALCO to Ghana in July 2004; the remaining 10% held by the American Corporation was sold to Ghana in June 2008, thereby making the Government of Ghana a 100% owner of the smelter.
Hon. Owusu-Ankomah said in August 2008, the Government sold 70% of its interest in VALCO to a consortium of International Aluminium Companies to form a partnership to develop the country's bauxite deposits and to construct an Alumina Refinery in Ghana. This partnership has provided the country with an opportunity to establish an integrated aluminium industry.
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