The government under the leadership of President Mahama is seeking private investment to revive the troubled Volta Aluminium Company (VALCO) after mounting debts, aging infrastructure and falling production pushed the state-owned smelter deeper into financial distress, Lands and Natural Resources Minister Emmanuel Armah Kofi Buah said.
Addressing workers at VALCO’s Tema plant, Buah said the company owes power suppliers more than $215 million and requires more than $700 million in fresh investment to modernize its operations and restore production capacity.
“The intention of government is very, very clear,” Buah told workers. “We have a responsibility to transform VALCO, to make it profitable, to make it self-sustaining and to create opportunity for so many Ghanaians.”
The minister’s remarks come amid growing resistance from labor unions over reports that the government intends to privatize the aluminum producer, which was established as a key pillar of Ghana’s industrialization agenda under former President Kwame Nkrumah.
Buah dismissed claims that the government had already sold the company, saying Cabinet had only authorized negotiations with investors willing to inject capital into the business.
“Nobody has closed any deal here,” he said. “All government has done is to give the minister the authority to find the solutions to the problems I’ve described.”
VALCO, originally designed to operate 500 smelting cells, is currently running about 90 after repeated equipment failures disrupted plans to expand output to 127 cells this year, according to the minister. The reduced capacity has affected product quality and increased electricity costs as the company pays for underutilized power.
“Unfortunately, because of the breakdowns, you are now at about 90,” Buah said. “The implications for that is that you are even producing not the quality that you had intended.”
The minister said the company’s financial difficulties extend beyond unpaid electricity bills. VALCO owes suppliers and carries legacy debts estimated at about $400 million, while state-owned power generator GRIDCO is owed approximately $40 million.
The Ministry of Finance has ruled out direct government support because of the country’s fiscal constraints, forcing authorities to pursue external investment to overhaul the plant’s aging infrastructure.
“We came to the conclusion that we needed a lot of money, over $700 million,” Buah said. “The Ministry of Finance has made it clear: in this period of austerity, I can’t even get you one cedi.”
Buah argued that maintaining the status quo would threaten jobs and undermine broader industrial development, saying the struggling smelter has deprived thousands of Ghanaians of employment opportunities and weakened industries that depend on aluminum production.
“A place that has potential opportunity to have more than 5,000 people, we have 800 people,” he said.
The government has shortlisted investors to negotiate with VALCO’s management, although Buah said authorities remain open to alternative proposals that could restore the company to profitability.
“Even in the course of the process, we have other companies who have come with proposals that are solid,” he said. “We are open to every idea that will help VALCO to turn around.”
The minister sought to reassure workers that any restructuring would be conducted transparently and would not result in the sale of the company.
“Nobody will sell VALCO, not under the watch of President John Mahama,” Buah said. “But we have to work and make this place a profitable institution.”
Buah also linked the smelter’s revival to Ghana’s broader ambitions of developing an integrated aluminum value chain, including refining and downstream manufacturing, which he said had failed to materialize despite decades of planning.
“It starts from a profitable VALCO,” he said. “That’s what we should all work together to do.”
