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Ghana cancels $1.2 billion bauxite deal, eyes global partnership, sources say

Three sources with direct knowledge said that Ghana had cancelled a $1.2billion bauxite leasing agreement with Rocksure International and was instead seeking a partnership with a large overseas company in order to tap into one of West Africa’s richest deposits.

Two sources indicated that potential partners could be Dubai-based Emirates Global Aluminium or a Chinese company.

Ghana has made a strategic shift by terminating the agreement. The country holds 900 million tons of bauxite - the 7th largest in terms of global reserves - but has struggled with attracting sustained investment into mining and refinery infrastructure.

Rocksure's lease covers the Nyinahin Hills, central Ghana. These hills are home to approximately 376 million tonnes of bauxite - the raw material for aluminium.

The Asante Bauxite Company Joint Venture was based on a joint-venture between Rocksure, the state-owned Ghana Integrated Aluminium Development Corporation and GIADEC to build a mining and alumina refining facility. Rocksure held 70% of the JV. GIADEC owned 20%, and the government 10%.

A 2019 Supreme Court decision declared the lease null and void because it was never ratified in parliament.

One source said that, "by the Exton Cubic decision, without ratification you have no lease", adding that the Ministry of Lands and Natural Resources informed Rocksure.

GIADEC refused to comment citing ongoing discussions. The Lands Ministry did not reply to comments. Rocksure declined to comment as well.

One source said that the company had not received a formal notification of termination. Only that GIADEC would be leaving the JV.

Ghana, Africa's largest gold producer, is lagging behind other regional countries like Guinea in terms of bauxite output. Guinea is a global leader in bauxite.

The GIADEC source stated that GIADEC is actively courting new investors including EGA, and several Chinese companies.

EGA lost its mining licence in Guinea due to delays in building a refining plant. In June, it signed a Memorandum of Understanding with GIADEC to explore opportunities in Ghana.

In an email reply to questions, the company said: "EGA expressed interest in developing bauxite in Ghana. It is currently assessing technical and commercial parameters for such a collaboration."

EGA stated that no binding agreements had been signed and did not provide investment figures, resource estimations or timelines.

According to a third source, EGA considered investing in Ghana as early as 2022. However, it backed out of the deal because they didn't want their Guinea license to be jeopardized. The source stated that they didn't wish for Guinea to think that their focus was shifting to Ghana.

EGA stated that "Sourcing Bauxite from Ghana aligns our objective to increase aluminium production by diversified our supply base."

GIADEC aims at beginning extraction and offtake from the Block B area - also known as Block B – in the first quarter next year. According to the first source, although no agreements have been signed, discussions with potential partners have advanced.

The first source stated, "We are looking at all the options to determine which serves the national interest."

Ghana Chamber of Mines predicts that national bauxite production will increase to 2 million tonnes in 2025 from a record-breaking 1.7 million tons last year. (Reporting and editing by Maxwell Akalaare Adombila, Veronica Brown and Susan Fenton).

(source: Reuters)