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Was Parliament Deceived into Approving VALCO Sale?

Author:
Selassie Ameko
Date:
2008-11-10 08:37:10


Reuters: VALCO 'buyers' deny purchase of 70% stake

Sunday, 9 November 2008,

Ghana's parliament approved a deal on Friday for the $175.5 million sale of 70 percent of aluminium smelter VALCO, but both foreign companies mentioned in the deal document denied they had any plans to buy the stake.

Ghana's trade ministry said in a memorandum to parliament that Norsk Hydro (NHY.OL: Quote, Profile, Research, Stock Buzz) and Companhia Vale do Rio Doce (Vale/CVRD) (VALE5.SA: Quote, Profile, Research, Stock Buzz) had agreed on Aug. 8 to buy the VALCO stake and invest $4.7 billion in Ghana's aluminium industry.

Three-month aluminium futures MAL3 have fallen by nearly a third since Aug. 8 and by over 40 percent since July highs.

Parliament approved the deal by acclamation but within hours both companies denied they were investing in buying into VALCO, which has been inactive since early 2007 due to power shortages.

"Hydro has no plans to make any investments in Ghana," Norway's Norsk Hydro spokesman Stefan Solberg said in Oslo.

"We have not signed any agreement. This is something we have looked at just like (we have looked at) other places in the world," Solberg said.

A spokeswoman for Brazil's Vale told Reuters in Sao Paolo that "there are no such plans for this."

Ghana government officials could not be reached for comment.

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According to our own intellectual HKP, the above report is not from the Palaver newspaper. It is from Reuters. The inference is that HKP has confidence in the veracity of the report.

Others have come out to castigate HKP for drawing a hasty conclusion about Kufuor's government's dishonesty in telling Ghanaians that it has signed a VALCO sale agreement, when in actual fact this may not be true.

I also want to comment by asking a very simple question.

We are told the Parliament of Ghana approved the VALCO sale agreement by acclamation.

If that is so, on the basis of what did a supposedly responsible institution like Parliament approve a sale agreement, which within hours of its approval, was rejected by the named buyers.

Before Parliament takes a momentous decision like approving the sale of VALCO, will they not call for the signed sale agreement between the government of Ghana and the buyer, or at least a memorandum of understanding to buy?

Therefore, something smells fishy here. Maybe we wait to hear from the government of Ghana and the Parliament of Ghana.
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