The Government of Ghana has cancelled a $1.2 billion bauxite lease with local firm Rocksure International and is now seeking a partnership with a major foreign company to develop one of West Africa’s richest deposits.

This is according to a Reuters report citing three sources with direct knowledge of the matter.

The portal noted that potential partners include Dubai-based Emirates Global Aluminium (EGA) or a Chinese firm, according to two of the sources.

The termination of the lease agreement marks a strategic shift by Ghana, which holds an estimated 900 million metric tons of bauxite, the seventh-largest deposit globally, but has long struggled to attract sustained investment in its mining and refining infrastructure.

Rocksure’s lease covered the Nyinahin Hills in the central region, which is home to approximately 376 million tons of bauxite, the primary ore used in aluminum production.

The lease underpinned a joint venture between Rocksure and the state-owned Ghana Integrated Aluminium Development Corporation (GIADEC) to develop a mine and an alumina refinery.

In the now terminated deal, Rocksure held a 70% stake in the Asante Bauxite Company JV, while GIADEC and the government held 20% and 10%, respectively.

However, the lease was never ratified by Parliament, rendering it void under a 2019 Supreme Court ruling.

“By the Exton Cubic ruling, without ratification, you have no lease,” one of the sources stated, adding that the Ministry of Lands and Natural Resources had formally informed Rocksure of the decision.

GIADEC declined to comment, citing ongoing negotiations.

Additionally, the Ministry of Lands and Natural Resources also did not respond to requests for comment and Rocksure likewise declined to comment.

Another source, close to the matter, noted that the firm had not been formally notified of the termination, only that GIADEC was withdrawing from the joint venture.

Ghana, which is Africa’s top gold producer, still lags behind regional peers like Guinea in bauxite production.

Presently, Guinea is among the world’s leading exporters of the mineral.

Meanwhile, GIADEC is now actively courting new investors, including EGA and several Chinese companies, according to one source close to the matter.

EGA, which previously lost its mining license in Guinea due to delays in building a refinery, signed a memorandum of understanding with GIADEC in June to explore opportunities in Ghana.

“EGA has expressed interest in jointly developing bauxite opportunities in Ghana and is currently assessing the technical and commercial parameters of such collaboration,” the company said in an email response to Reuters.

EGA confirmed that no binding agreement had been signed and did not disclose investment figures, resource estimates, or timelines.

A third source said EGA had considered investing in Ghana as far back as 2022 but backed out to avoid jeopardising its license in Guinea.

“They didn’t want Guinea to feel they were shifting focus to Ghana,” the source said.

“Sourcing bauxite from Ghana aligns with our objective to grow aluminum production by diversifying our supply base,” EGA noted.

GIADEC aims to begin extraction and off-take from the Nyinahin area, known as Block B, in the first quarter of next year. Although no deals have been finalised, discussions with potential partners are reportedly at an advanced stage, according to one of the sources.

SP/MA

How Virtual Reality is enhancing business and customer experience