Poor railway hurts Ghana's bauxite trade

05:51 a.m. May 10, 1999 Eastern

By Harry Mouzalas

AWASO, Ghana, May 10 (Reuters) - Bauxite shipments from Ghana are being hampered by the unreliable railway line between the mine near Awaso in the southwest and the port of Takoradi, the chief executive of Ghana Bauxite Company (GBC) said.

``We have only 40,000 tonnes waiting at the Takoradi port to be shipped, while as much as 220,000 tonnes of processed bauxite is piled here at the mine,'' Ben Aidoo told Reuters in an interview.

``We cannot waste labour and expensive energy to mine ore which cannot be carted to the port for shipment. The railways should be doing 11,000 tonnes daily but they are doing only between 4,000 and 5,000,'' he added.

Aidoo, who is also president of the Ghana Chamber of Mines, said exports of bauxite from Ghana dropped to around 350,000 tonnes in 1998 from over 500,000 tonnes in 1997, and the poor condition of the railway was largely to blame.

Derailments are common and sometimes the line can take days to be cleared. Some 68 days were lost in this way in 1998, Aidoo said. In 1999, until the end of April, 15 days had been lost.

Aidoo said that if the interruptions continued GBC might cut costs by shutting down the mine for one or two months and carry out maintenance work.

GBC is owned 80 percent by Canada's Alcan International (AL.TO). The Ghanaian government has a 10 percent stake.

Around half of production goes to an Alcan plant near Edinburgh, Scotland, and the rest to Canada, the United States, Germany and Ireland.

Ghana Railways Corporation is state-owned and Aidoo said the government ought to find money for repairs.

However, given the importance of the line to its business, Alcan was talking with the government about providing an estimated $4 million in funds for repairs to the line and the purchase of new, bigger wagons.

``If and when these two projects come to fruition, they will help in no small measure in improving performance in both companies,'' Aidoo said, meaning GBC and the railway.

Current proven reserves at the GBC mine stood at 25 million metric tonnes, so the mine had at least 20 years to run, he said. At full capacity, it can produce a million tonnes a year.

Ghana also has huge bauxite deposits in the east which are not currently being mined.

The bauxite at Awaso is a chemical grade type used, among other things, in the production of pharmaceuticals, toothpaste, aluminium chemicals, pigment coatings, polishing compounds, abrasives and tableware.