China Bosai Mining Group intends to withdraw, Ghanaian bauxite company’s tensions escalate

Ghana Bauxite Co., Ltd.With the decisive divestment of strategic investors, Avaso in the Bibiani-Anhwiaso-Bekwai region in the northwest of the country felt nervous and uneasy.

China Bosai Mining Group, which holds 80% of the company’s shares, has sent a letter to the government of Ghana, expressing its intention to sell its shares and leave.

China Mining Group has decided to bid farewell to countries that have no longer renewed the GBC mining lease, which will expire on January 2022, 1.

The withdrawal of strategic investors has caused the 700 GBC workers to be restless. They are worried about their job security and the future of the country’s only operating bauxite mine.

Some residents of Avaso and surrounding communities mainly rely on the mines for their livelihoods, and they also express their grief over the negative impact the situation may have on them.

However, to complicate the problem, the existing bauxite mining sites will extend their service life within six months. Of course, this requires GBC to develop a site nearby. This process may require a large amount of capital investment for a year.

Taking into account the current situation, some employees called on the government to find another strategic investor as soon as possible to develop a new website, while others wanted to start a procedure to pay them severance when the company entered the development stage.

Bosai Mining Group joined the company as a strategic investor in 2010, enabling it to achieve a profit of 4 million U.S. dollars and 6 million U.S. dollars in 2019 and 2020, respectively, while the previous loss was 11 million U.S. dollars.

The strategic investor’s output also jumped from 60 tons to about 140 million tons.

Considering the withdrawal of Bosai Mining Company as a strategic investor, the board of directors held a meeting with the management and leaders of the workers’ union at the GBC venue in Avaso on August 2021, 8.

The Ghana Comprehensive Aluminum Development Corporation (GIADEC), biani-anhwiaso-bekwai New Patriotic Party Member Mr. Alfred Obeng-Boateng, and representatives of the Ghanaian Miners Union also attended the meeting.

Mr. Frank Asiedu-Bekoe, Political Affairs Director of the Office of the Director of the Bureau Office also attended the meeting.Nevertheless, he assured the workers that the government will work to maintain the operation of the GBC.

Mr. Isaac Ofori-Poku, Chairman of the GBC Board of Directors, said: “The company is still operating, and discussions on the decision to sell shares of Bosai Mineral Group are still going on, so the issue of severance pay is still too early.”

He sought the cooperation of workers to help the board of directors ensure the continued operation of the company for the benefit of workers, Avaso and its neighboring communities, and the country as a whole.

GBC General Manager Mr. Fang (JK Fang) said: “GBC applied for the extension of its mining lease contract in January 2020, but as of now, the application is still being processed.”

Fang accused GIADEC, established in 2019, of deliberately obstructing efforts to extend mineral lease contracts. GIADEC was established to maintain the Chinese government’s interest in bauxite and the integrated aluminum industry.

He said: “All efforts to get Guangdong Aluminum to take the lead and support the extension of the mining lease contract have fallen on deaf ears. Guangdong Aluminum would rather send a signal that Bosai Mining Group no longer needs it in the bauxite industry.”

He believes that “the mining lease should be renewed long ago so that the company can promise new funds to develop new mining areas.”

“The existing mine called Ichiniso will be used up in about 6 months. We need to develop another mine quickly so that it can be converted smoothly so that production will not be interrupted. This process will take about a year. Our The mining lease application has been waiting for more than one and a half years. This means that one and a half years has been wasted.”

“In view of this unfortunate situation, we have made a firm decision to evacuate,” he said.

According to industry insiders, “gaidc is not responsible for GBC’s difficulties in extending the mining lease, but because strategic investors have failed to show any commitment to build a bauxite refinery in the near future, which hinders mining Extension of the lease”

The source added: “This is the expectation of strategic investors, and it is in line with the government’s policy to transform China from a primary bauxite exporter into an integrated aluminum industry center. This is part of the government’s industrialization agenda.”

Withdrawal of strategic investors and the government acting through GIADEC, which owns the remaining 20% ​​of GBC, enjoys the right of first refusal in accordance with the law and shareholding structure.

The above clauses of the agreement stipulate that Bosai Mining Group must first give GAIDEC the opportunity to purchase its shares.The company can exercise this right to purchase these shares and become the sole shareholder of GBC, or it can refuse this right and allow Bosai Mining Group to find other investors to buy its shares.

Mr. Fang said: “Bosai Mining Group intends to submit a report to the government on June 6 this year, and both parties agreed to give the government two months to decide its future direction.”

“These two months will end on August 8 this year. Therefore, we are waiting for the government.” He concluded.

(Compiled by Jiu Shang Yunhui, source: AlCircle; original URL: ghana-bauxite-company-70123)

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