Bosai Minerals Group of China intends to pull out, tension mounts at Ghana Bauxite Company

The Ghana Bauxite Company (GBC) Ltd. Awaso in the Bibiani-Anhwiaso-Bekwai district in the Western North Region of the country is mounted with tension and disquiet following the decisiveness of pull out by the strategic investor.

Bosai Minerals Group from China, the investor which holds an 80% stake in the company, has written to the Government of Ghana concerning its intention to sell its shares and depart.

The Chinese mining group has decided to adieu the country apt to the non-renewal of the mining lease of the GBC which expires on 9^th January 2022.

The pull out of the strategic investor has led to restlessness and agitation among the 700 workers of the GBC who are distressed about their job security and the future of the only operational bauxite mine in the country.

Several inhabitants in Awaso and surrounding communities whose livelihood hangs largely on the mine have also expressed grief about the negative impact a situation might land on them.

However, complicating the problem, it is a fact that the existing site where the company mines bauxite will outreach its lifespan in six months, of course, it a situation which entails GBC to develop a nearby site, a process that could take up to a year with heavy capital outlay.

Looking at the current situation, some of the workers are calling on the government to find another strategic investor as early as possible to develop a new site, while others want a process to be activated for them to be paid severance packages when the company goes into the development stage.

Bosai Minerals Group’s joining on board in 2010 as a strategic investor has turned around the company into a profit-making by $4 million in 2019 and $6 million in 2020, whereas earlier it was making the loss of $11 million.

The strategic investor has also leapt the production from 600,000 tonnes to around 1.4 million tonnes.

Bearing in mind the exit of Bosai Minerals as a strategic investor, on 12^th August 2021, the Board of Directors held a meeting on GBC premises at Awaso with the management and leaders of the workers union.

The meeting also saw the presence of the representatives from the Ghana Integrated Aluminium Development Corporation (GIADEC), the New Patriotic Party (NPP) Member of Parliament for Bibiani-Anhwiaso-Bekwai, Mr Alfred Obeng-Boateng, and officials from the Ghana Mine Workers Union (GMWU).

Mr Frank Asiedu-Bekoe, Director of Political Affairs at the Office of the Chief of Staff at the Presidency, was also present at the meeting. Although, he has thrown assurance to workers, in regards to the government commitment to sustaining the operations of the GBC.

Mr Isaac Ofori-Poku, Board Chairman of the GBC, said: “The issue of severance package was too early, as the company was still in operation and discussions were still ongoing about the decision of Bosai Mineral Group to sell its stake.”

He seeks for the cooperation of the workers to help the Board ensure the continuous operations of the company for the benefit of the workers, Awaso and its adjoining communities, and the nation at large.

Mr J. K. Fang, General Manager of the GBC, said: “The GBC applied for a renewal of its mining lease in January 2020 but as of now the application was still pending.”

Fang accused GIADEC, the company that was created in 2019 to hold the government’s interest in the bauxite and integrated aluminium industry, for deliberately frustrating efforts to have the mineral lease renewed.

He said: “All efforts to get GAIDEC to spearhead and support the renewal of the mining lease had fallen on deaf ears, with GAIDEC rather giving signals that Bosai Minerals Group was no longer needed in the bauxite industry.”

According to his view, “The mining lease should have been renewed long ago for the company to commit new funds to develop the new mining site.”

“The existing mining site known as Ichiniso will reach its lifespan in about six months and we need to quickly develop another site to switch smoothly so that there will be no break in production. This process will take about a year. Our mining lease application has been pending for more than a year and a half. This means a year and a half has been wasted.”

“Given this unfortunate situation, we have taken a firm decision to pack out,” he said.

As per the industry  sources, “GAIDEC was not responsible for the difficulties GBC was having in renewing the mining lease but rather it was the failure of the strategic investor to show any commitment in building a bauxite refinery in the near future which was holding up the renewal of the mining lease.”

The sources added: “It was expected of the strategic investor and was also in line with the government’s policy to turn the country from an exporter of raw bauxite into an integrated aluminium hub as part of the government’s industrialisation agenda.”

The exit of the strategic investor, and the government acting through GIADEC, which owns the remaining 20% shares in the GBC, has the right of first refusal per the law and the shareholding structure.

The above clause of the agreement unfolds that Bosai Minerals Group must give GAIDEC the first opportunity to purchase its shares. GAIDEC can exercise this right and buy the shares to become the sole shareholder of the GBC or it could decline this right and allow Bosai Minerals Group to look for other investors to purchase its stake.

Mr Fang said: “Bosai Minerals Group made its intention to pack out to the government on June 30, this year, and the two sides agreed to two months for the government to decide on the way forward.”

“The two months will end on August 30, this year. So we are waiting for the government,” he concluded.