Ms Hannah Tetteh, the Trade and Industry Minister, on Wednesday said a properly positioned Volta Aluminium Company Limited (VALCO) "holds a significant place in Ghana's economic transformation agenda."
She said at a long-term metal price of some amount per tonne, the Smelter operations "alone would reap revenue of at least 500 million dollars
at full business potential."
"VALCO's operations would inject revenue of about 300 million dollars, (not counting the multiplier effect) into Ghana's economy through the Volta River Authority power purchases, income tax/value added tax, VALCO fund, property rate, port charges, local purchases, indirect labour, local contractors, etc.," the Minister said.
She said these when she appeared before Parliament to respond to a question on why VALCO was closed down and whether the Ministry had plans to re-open it.
The Minister said VALCO's history of shut downs was attributable to inadequate supply of electric power.
"However, the current shut down which occurred on January 3, 2009 was mainly due to the effects of the global economic down meltdown."
She said the global aluminium market began deteriorating and the result, among others, was a drastic reduction in the demand for aluminium, the metal used in the housing and auto industry for windows, doors, engine casing and other like products.
"Consequently, the London Metal Exchange aluminium price which is used world-wide as a benchmark, which was about 3,071 dollars, in July, 2008 slumped down to about 1,490 dollars a metric ton by December, 2008."
"This situation made it uneconomical for VALCO to continue to operate. Therefore on January 3, 2009 the facility, like several others around the globe, had to be shut down to re-start when conditions improved."
She said the shut-down led to a sizeable redundancy but added that the conditions that triggered the shut-down in January this year, have improved because aluminium prices recovered.
Again, she said, the low level of the Akosombo dam due to low rainfall and drought, which led to insufficient power, has also improved.
"The combination of a reasonably good metal price and the improved energy outlook puts VALCO in a favourable position to re-start the smelter
facility so Ghana can continue to reap the full benefits that an operating VALCO makes possible."
"It is significant to note that VALCO currently has in stock substantial amounts of major raw materials to get the plant running for at least three months before replenishments are required."
"It is estimated that at least two months will be required to hire employees, train and re-train then and to re-commission the equipment before actual manufacturing operations start," the Minister said.