"We are driving through an aspiration to be the lead in the integrated aluminium industry in Africa with the view to adding value to our raw materials" - Michael Ansah, CEO of Ghana Integrated Aluminium Development Corporation (GIADEC)

AL Circle had the pleasure of talking to Michael Ansah, the Chief Executive Officer (CEO) of Ghana Integrated Aluminium Development Corporation (GIADEC).

GIADEC is a wholly owned Government of Ghana entity that has been established with a mandate to promote and develop Ghana’s Integrated Aluminium Industry. He is also a member of the Volta Aluminium Company (Valco) Board of Directors (a wholly-owned subsidiary of GIADEC.  

Prior to his appointment as CEO of GIADEC, Michael was Senior Vice President (SVP) at Dell Technologies, with responsibilities for Global operations across over 180 countries. In a career spanning over 30 years, he has held a number of senior executive leadership roles. He was a Director/Associate Partner at PWC Consulting/IBM Business Consulting Services. He was also Group Director at Regus Plc., a member of the IWG, and served as CEO for the Ghana Millennium Challenge Account Programme, developing a national strategy for a multi-sectoral programme to remove constraints to economic growth. 

In 2018, he was appointed by the President of Ghana, His Excellency Nana Addo Dankwa Akufo-Addo, to lead the development of an Integrated Aluminium Industry in Ghana. GIADEC is harnessing Ghana’s 900 million tonnes bauxite reserves, its ownership of Valco, as well as its minority stake in Ghana Bauxite Company Ltd., to build and establish a fully Integrated Aluminium Industry (IAI), leveraging the full value chain of bauxite mining, alumina refining, and aluminium smelting, and giving credence to the President’s vision of a “Ghana Beyond Aid”. He holds an MBA from Cranfield School of Management, UK.

In this interview, Ansah talks about GIADEC's vision to lead Ghana's integrated aluminium industry and add value to the nation's raw materials. He discusses the corporation's Master Plan, which includes developing four mines, two refineries, and modernizing a smelter while fostering downstream industries. 

GIADEC aims to achieve supply chain cohesion by integrating mining, refining, and smelting processes, as well as establishing a strong international market presence through strategic partnerships and offtake agreements. Furthermore, Mr. Ansah emphasized GIADEC's commitment to environmental and social responsibility, actively engaging with local communities and adhering to global sustainability standards in their operations.

Watch the interview

Read the highlights of the interview below:

AL Circle: What was the driving vision behind the establishment of GIADEC?

Michael Ansah: GIADEC, short for the Ghana Integrated Aluminium Development Corporation, was established in 2018 by an act of parliament and commenced operations in 2019. It's a government-owned entity, fully owned by the Ghanaian government, with a mission that many describe as highly ambitious. The core objective behind GIADEC is to become a leading player in the integrated aluminium industry in Africa and, in doing so, add significant value to Ghana's abundant raw materials, particularly bauxite. GIADEC's portfolio includes control over the entire bauxite resources in Ghana, an aluminium smelter (Valco) operational since 1967, and a long-standing mining operation (Ghana Bauxite Company). GIADEC operates as a holding company with interests in both mining and smelting, with the overarching vision of creating a fully integrated aluminium industry in Ghana, encompassing mining, refining, smelting, and downstream industries. The ultimate goal is to achieve leadership in the integrated aluminium sector, drive value addition to raw materials, and contribute significantly to Ghana's industrialization agenda, using aluminium as a catalyst for economic transformation.

AL Circle: What inspired GIADEC’s vision for developing an Integrated Aluminium Industry, and how do you envision this plan impacting Ghana’s economic future?

Michael​​​​​​​ Ansah: I've been emphasizing the importance of integration in our approach. Historically, we've primarily exported raw materials like gold, diamonds, and bauxite. However, our vision is driven by the desire to change this pattern and add significant value to these raw materials. The inspiration behind this vision is all about value addition. We aim to leverage this value addition as a foundation for propelling industrialization. Our journey traces back to the 1960s when we initiated efforts to establish an industrial base through the integrated aluminium industry. This endeavour led to the construction of the Akosombo Dam, a hydroelectric power source, and the development of the Valco smelter. Despite our long history of mining in Ghana, dating back to the 1940s, we have never achieved full integration within the industry. Our goal now is to add value to our raw materials, establish a refinery, and continue with smelting to drive transformation. Ultimately, we aspire to become a significant contributor to our nation's economy through these efforts.

AL Circle: Can you provide insights into the timeline, phases and progress of the Master Plan’s execution? How do you plan to ensure smooth coordination and progression of the various projects?

Michael​​​​​​​ Ansah: In terms of our master plan, we're tackling what some have called an incredibly ambitious project. With $900 million worth of bauxite resources at our disposal, our aim is to execute this plan in a highly coordinated manner. Our master plan revolves around establishing four mines across Ghana, using these mines to create refineries for processing the oxide produced locally and subsequently venturing into smelting. This comprehensive approach is the cornerstone of our vision and fosters the growth of downstream industries.

Regarding the timeline, our journey began in 2019. In 2021, we inked an agreement with our first partner, Rockshore International, a wholly owned Ghanaian company, for one of our projects. As of now, we've initiated four projects. First, we're expanding an existing mine in Awaso, where we've been mining for decades, and concurrently building a refinery. Second, the project with Rockshore International is progressing well. Third, we're collaborating with a prominent European industrial company, poised to sign enabling agreements for an integrated mine and refinery project. Lastly, we're gearing up to retrofit and modernize our Tema smelter to boost its annual production from 50,000 to 300,000 tonnes, with plans to start by 2024.

The projects have different timelines but are progressing methodically, driven by private-sector financing. By adhering to confidentiality, we've established notional timelines with an ultimate goal to complete the program by 2028, spanning seven years. The timeline is influenced by the historical duration of global refinery construction, typically five to seven years. Challenges abound, particularly the substantial capital requirement of around $6 billion for this massive undertaking. We know the risks well and work closely with our partners.

Infrastructure development is critical. We've made progress with railways, with approximately 250 kilometres to the mining areas and about 100 kilometres already built. Power infrastructure agreements ensure competitive rates of around three and a half cents per kilowatt-hour. Port infrastructure investments, especially in the Takoradi port, allow us to operate larger vessels. This integrated approach spans infrastructure, power, transportation, and port infrastructure, aligning with our industrialization goals. Organizing our efforts into four separate projects enables us to manage risks effectively and advance toward the successful execution of the entire endeavour. Looking ahead, we anticipate these elements will come together harmoniously as we progress along this intricate journey.

AL Circle: What challenges does GIADEC anticipate in developing two alumina refineries, and what measures are there to overcome these challenges?

Michael​​​​​​​ Ansah: In terms of the infrastructure aspect, it's important to note that we're not directly responsible for its delivery, but we're actively coordinating with various entities such as railways, ports, and power organizations. The focus here, particularly with regard to railways, is to ensure timely completion, as it plays a crucial role in project execution.

The second key consideration is market access. It's essential to secure markets for our products. This industry is highly competitive, with significant players already holding important market shares. Presently, we primarily export bauxite to China, but we're looking to diversify our markets. By partnering with entities that have global supply chain access, such as our collaboration in project three involving an established company with a need for alumina.

We've been diligently working on our refinery solution for nearly a year, and it's shaping up to be an exciting project. This project could lead to the construction of a two million-ton alumina refinery based on agreed offtakes, which would significantly de-risk the venture and facilitate financing. While I can't provide all the details just yet, we're making promising strides in this direction.

To sum it up, the two major risks we're addressing are infrastructure and market access. We're approaching these challenges strategically. Of course, there are other risks, some within our control and others not, but managing them all is part of the complex puzzle of a project of this magnitude. External factors, like the impact of Covid, have presented their own set of challenges, but we're navigating them as best as we can, always keeping the project's progress in focus.

AL Circle: The modernization of VALCO is a crucial part of the Master Plan. Could you provide more insights into the specific technological upgrades that will be implemented to increase production capacity?

Michael​​​​​​​ Ansah: In essence, the Valco plant, originally built by industry leaders Kaiser and Reynolds, used the P69 technology. While this technology was cutting-edge at the time, it has since become outdated, with newer, more efficient technologies available today. Rather than scrapping the entire plant, our plan is to retrofit and modernize it, following successful examples like Dubal in Dubai and Alba in Bahrain that transformed their P69-based plants. We're benchmarking against proprietary technologies like Dubal's D18, aiming for similar or superior results. Currently, we're actively engaging with potential partners globally, including some from India, who share our vision and understand our strategic plan. We're seeking partners with the right technology, capacity, and financial resources to revitalize the plant. Despite its age, the plant's location and existing infrastructure offer immense potential for growth, and we're committed to finding the ideal partner to execute our plan effectively.

AL Circle: How will the Master Plan positively impact downstream industries reliant on aluminium products?

Michael​​​​​​​ Ansah: Our initial vision when establishing the smelter in 1967 was to develop mines, build a refinery, and foster downstream industries. While we couldn't realize the mines and refineries back then, the presence of the aluminium smelter remained. Today, Aluworks is privately owned and is a significant secondary producer, manufacturing goods for the Ghanaian and West African markets.

Additionally, companies like Western Road, Tropical Cables, and various extrusion and construction firms utilize Valco's metal for their products. There's a substantial opportunity for expansion in these areas, and we've conducted extensive groundwork to explore these possibilities.

An exciting development in Ghana is the emergence of the automobile industry, with nine companies currently assembling cars and trucks, and further expansion planned. These companies will require aluminium industry products, and we're closely collaborating with them to meet their needs. We're also looking at international markets, especially with the Africa Continental Free Trade Area opening up access to a vast market of 1.4 billion people with a GDP exceeding $1.5 trillion.

Our focus on the downstream industry is central to our strategy, representing the culmination of our efforts and offering the potential for growth locally, regionally, and globally through strategic partnerships and market expansion.

AL Circle: How does GIADEC envision addressing the training and development needs of the local workforce to meet the demands of the aluminium industry?

Michael​​​​​​​ Ansah: It's worth noting that Ghana has a history of training and developing skilled individuals in the aluminium industry, with many Ghanaian professionals working in aluminium smelters and refineries worldwide, particularly in the Middle East and Australia. Valco, in particular, has a strong legacy of nurturing talent, thanks to its foundations laid by Kaiser, Alcoa, and others.

Our approach includes intentionally incorporating training and development into our initiatives. We aim to collaborate with partners to ensure that local Ghanaians receive the necessary training and skills development to participate in the industry effectively. We already have a solid base of Ghanaians with industry experience, some of whom are returning to Ghana to contribute to our projects.

Furthermore, as we venture into refinery operations, which are a new territory for Ghana, we are committed to transferring skills and establishing clear training programs in the coming years. Leveraging our history and expertise in the smelting sector, we're poised to nurture a skilled workforce that can thrive in the aluminium industry.

AL Circle: In terms of sustainability and environmental responsibility, what measures do you plan to implement to make these projects an example of responsible resource development for other nations to follow?

Michael​​​​​​​ Ansah: In today's world, where climate change awareness is at its peak, we are acutely aware of the stringent environmental conditions we must navigate. Mining in forest reserves, especially for bauxite, presents a unique challenge. How we conduct mining operations, reforestation efforts, and the implementation of comprehensive environmental action plans are crucial aspects of our holistic ESG (Environmental, Social, and Governance) approach.

Our commitment extends to actively engaging with the communities where we operate and collaborating closely with regulatory agencies like the Water Commission, Forestry Commission, and Minerals Commission. We are dedicated to adhering to globally accepted standards, such as those set by the Aluminium Institute and other reputable organizations, to ensure that our practices align with the highest global benchmarks and serve as an example to others.

Drawing from lessons learned from various parts of the world, including recent challenges in places like Brazil, we understand the real environmental risks at hand. Our ESG and sustainability plans are designed to address and exceed these standards, and they are integral components of the proposals and plans we are developing in partnership with our stakeholders.

AL Circle: The Master Plan aims to create a positive economic impact on local communities. Can you share a vision of how these projects will transform the lives of the people living in the areas surrounding the mining and refining operations?

Michael​​​​​​​ Ansah: The communities surrounding our mining operations are our top priority. We are deeply committed to their well-being, development, and the responsible stewardship of the environment in which we operate. To ensure community involvement and participation, we have established community groups known as the "19-member committees," although the actual number of members may vary. These committees serve as platforms for local residents to have a voice in our projects.

We believe that the community should play an active role in shaping our initiatives, understanding the investments we make, and witnessing the positive impact on their development. As part of our collaborative efforts with partners, we allocate funds based on production to support community-led infrastructure and development projects. This approach will be systematically implemented over time, potentially spanning five to ten years, resulting in a tangible transformation aligned with our comprehensive plan.

Our engagement strategy also extends to local traditional authorities, including chiefs and community representatives, women's groups, youth, religious bodies, and other stakeholders. These groups come together within the 19 member committees to facilitate ongoing dialogues, ensuring that our plans and implementations align with the community's aspirations and contribute to its revitalization.

Recognizing the historical challenges associated with mining firms' engagement in communities, we are committed to rectifying past shortcomings by actively involving the community from the outset. Our aim is to collaboratively shape a future that benefits all stakeholders and fosters positive community regeneration.

AL Circle: How does GIADEC envision integrating these mining and refining projects to achieve a cohesive supply chain and enhance Ghana’s position in the global aluminium market?

Michael​​​​​​​ Ansah: Our focus on integration and value addition lies at the core of GIADEC's mission. We are determined to ensure comprehensive cohesion within the supply chain under the GIADEC umbrella. Historically, we've experienced a disconnect between our mining and smelting operations, with no relationship between the two, and even resorted to importing alumina for smelting. This lack of integration has been a challenge.

Our project is designed to rectify this situation by driving integration and cohesion throughout the supply chain. We're forging back-to-back agreements, bridging the gap from mining to refining, then from refining to smelting, and ultimately utilizing primary aluminium to fuel downstream industries. This strategy addresses local integration comprehensively.

Moreover, on the international front, where we export alumina and aluminium, we are deeply engaged in global markets. Valco currently exports to select markets, which will continue when we export alumina. Our offtake agreements will ensure a consistent market for our products. In essence, our approach guarantees that we are firmly connected to global markets, pursuing our objectives in a methodical and deliberate manner.

AL Circle: Developing refineries requires significant investment. Can you elaborate on the financial partnerships and funding strategies GIADEC plans to utilize to ensure the successful establishment and operation of the alumina refineries?

Michael​​​​​​​ Ansah: Setting up refineries is a capital-intensive and complex endeavour involving long-term commitments and managing various risks. Financing such projects isn't easy, which is why we're pursuing partnerships. It's important to note that GIADEC will have equity ownership in each of these projects. For instance, in project one, we currently hold a 20% stake in the mining company, but when we build the mine and refinery, our stake will increase to a minimum of 30%. Project two follows a similar structure, and project three is aligned with this approach. Project four will see us holding approximately 40% equity.

This means that we'll invest in these projects, and our partners will contribute as well. We'll utilize a combination of debt and equity for our financial structure, with each project having its specific mix. Importantly, we are committed to ensuring that there is a market for the products we produce. This is why defining the refinery solution takes time—we want to secure significant offtake agreements, preferably 30-year-plus contracts, to guarantee a market for our products. To achieve this, we are focusing on meticulous planning, seamless operation, and consistent delivery. Most of our financing will be project-finance based, with each project being financially self-contained, enabling us to make these endeavours financially viable. Our partnerships and market access are fundamental to this approach.