Parliament approves a 30-year lease agreement for Bauxite mining at Awaso

The Parliament of Ghana has ratified a mining lease agreement between the Government of Ghana and the Ghana Bauxite Company Limited to expand the existing mine at Awaso in the Bibiani-Anhwiaso-Bekwai Municipality of the Western North Region.

The mining lease agreement which was renewed for another 30 years after the one that was granted in January 1997 expired in January 2022 after a 25-year term. During that time, the Ghana Bauxite Company (GBC) was owned by Bosai Minerals Group Limited until it exited in 2022. Bosai Minerals Group held 80% shares in GBC while 20% was held by the Ghana Integrated Aluminium Development Corporation (GIADEC) on behalf of government.

A joint parliamentary committee comprising the Lands and Forestry Committee and the Mines and Energy Committee was tasked to consider the mining lease agreement that was submitted by Minister of Lands and Natural Resources, Samuel Abdulai Jinapor on 12th June 2024. In a report presented to Parliament on Wednesday, the joint committee noted that an estimated $600 million will accrue to the government over the term of the lease by virtue of its 20% shareholding of the company. The Committee added that government would also benefit immensely through taxes, fees and royalties that would accrue as the lease gets ratified.

The Ghana Bauxite Company now has a new majority shareholder – Ofori-Poku Company Limited, a local entity incorporated in March 1990 that stepped into the void as Bosai Minerals Group exited the country. Ofori-Poku acquired the 80% shares previously held by Bosai. GIADEC, as part of its mandate to promote and develop an Integrated Aluminium Industry in Ghana has developed a four-project agenda of which GBC constitutes project 1 which required the expansion of the existing mine at Awaso and building of an alumina refinery. To implement project 1, GIADEC signed a Memorandum of Understanding with GBC to expand the mine and build a refinery in line with the Ghana Integrated Aluminium Development Corporation Act, 2018 (Act 976) which provides that steps must be taken to ensure that bauxite is not exported raw.

Deputy Minority Leader Emmanuel Armah-Kofi Buah (MP, Ellembele) who was one of the contributors to the debate on the motion expressed concern over the government’s inability to have increased its shareholding from the current 20% as the new company, Ofori-Poku Company Ltd., took over. The mining lease agreement was ratified by a consensus of the House.

Source: Frank Bruce || Ceditalk