The Chief Executive Officer of the Ghana Integrated Aluminium Development Corporation (GIADEC), Reindorf Twumasi Ankrah, has warned that the Volta Aluminium Company (VALCO) faces a bleak future — including possible job losses — unless urgent steps are taken to attract private capital.

He stressed that the government’s proposed strategic partnership is a rescue effort, not a sale of the state-owned aluminium smelter.

Addressing the media, Mr Twumasi Ankrah sought to dispel what he described as persistent misconceptions about VALCO, urging the public debate to move beyond politics and confront the economic realities threatening the company’s survival and the livelihoods it supports.

He explained that upon assuming office on March 2, 2024, he reviewed documents he inherited, which showed that attempts to revive VALCO date back to at least 2019. As part of those efforts, global consulting firm KPMG was commissioned to conduct a comprehensive audit and recommend viable options for restoring the smelter.

“VALCO looks impressive from the outside, but the real question is whether it is productive in reality,” he said.

Originally built with a nameplate capacity of 200,000 metric tonnes of aluminium per year, VALCO currently produces only about 35,000 metric tonnes. Despite this sharp decline, the plant still consumes nearly the same amount of power — about 90 megawatts — rendering operations financially unsustainable.

Mr Twumasi Ankrah traced VALCO’s challenges to its ownership history. The smelter was established following negotiations in 1964, with power supplied from the Akosombo Dam, and began operations in 1967 as a wholly private enterprise owned by Kaiser and Reynolds. The Government of Ghana did not hold any stake until 2004, when Kaiser, facing bankruptcy in the United States, sold its majority shares to the state. Reynolds exited a few years later, leaving VALCO fully state-owned by 2008.

“From the period the government took over full ownership and management, the performance trajectory declined sharply,” he said, citing findings from the KPMG audit.

By 2022, the smelter had shut down entirely, with workers sent home. He noted that repeated shutdowns further undermine the company’s prospects, as restarting operations requires heavy capital investment while output capacity continues to deteriorate.

The situation worsened by January 2025, when VALCO’s debts had risen to about US$450 million, owed to creditors including GRIDCo, the Ghana Revenue Authority and the Tema Development Corporation. With creditors applying pressure and the government unable to inject fresh capital, a decision was taken to keep the plant closed to prevent further financial losses.

Against this backdrop, Mr Twumasi Ankrah said claims that VALCO is being sold are misleading. Instead, the government is pursuing a strategic partnership — an option recommended by KPMG and endorsed by successive administrations, including approvals granted in May 2022 to search for an equity investor.

Initial attempts to secure an investor failed, largely due to unresolved issues surrounding power supply and the handling of existing stock. Learning from those setbacks, the current administration has restarted the process with stricter conditions, requiring prospective partners to present clear plans for power generation and stock retention.

A new 12-member inter-ministerial committee, made up of representatives from the Finance, Energy, Trade and Lands ministries, as well as GIADEC and VALCO, has reviewed proposals. Its recommendations have been approved by the GIADEC board and forwarded to the sector minister, with Cabinet consideration now pending.

Mr Twumasi Ankrah said the plan goes beyond restoring VALCO’s former capacity, with a target to expand production to at least 300,000 metric tonnes within 36 months. This would require retrofitting all six production lines, many of which are more than 60 years old and highly inefficient.

The estimated investment needed is about US$600 million — a sum the government cannot afford. While some potential investors declined, arguing it would be cheaper to build a new smelter elsewhere, he revealed that a consortium has expressed interest in partnering with the state, citing local content requirements and the strategic value of co-ownership.

Crucially, some shortlisted investors have also indicated their willingness to pay the government for the equity stake they acquire, in addition to funding the modernisation of the plant.

Mr Twumasi Ankrah warned that further delays could have severe consequences for employment. VALCO’s workforce has shrunk from about 1,800 employees in the 1990s to roughly 650 today, with additional losses likely if the turnaround plan stalls.

He disclosed that President John Dramani Mahama has been clear that the state does not have the financial capacity to revive VALCO on its own, making private sector participation unavoidable.

“If nothing is done immediately, VALCO will have to shut down completely, and everyone will go home,” he warned. “This is about safeguarding jobs, sustaining a strategic industrial asset and ensuring that Ghana’s aluminium sector does not collapse.”

He reiterated that the partnership model represents policy continuity rather than a shift, describing it as the only realistic pathway to secure VALCO’s future and restore its role as a cornerstone of Ghana’s industrial development.