HISTORY

OWNERSHIP

Volta Aluminium Company Limited (VALCO) is wholly owned by the Government and people of Ghana . It was originally owned 90% by Kaiser Aluminium and Chemical Corporation and 10% by Reynolds Metal (both of the United States of America). Reynolds Metals’ shares were subsequently bought by Aluminium Company of America (ALCOA).

On October 31, 2004, Kaiser Aluminium and Chemical Corporation formally sold its 90% ownership to the Government of Ghana (GoG). This was as a result of electric energy constraints; long unsuccessful efforts to negotiate “good” power price and Kaiser’s own operating and financial challenges back home in the United States.

NATURE OF BUSINESS

VALCO is a major producer of primary aluminium for the world market.  Located in Tema on Ghana’s coast, VALCO is a private limited liability company incorporated in the Republic of Ghana in 1960.

BIRTH OF VALCO

The establishment of VALCO was as a result of the vision of the first President of the Republic of Ghana, Dr Kwame Nkrumah, to establish an integrated aluminium industry in the country. The Company is therefore a product of the meeting of minds of Dr Nkrumah and the late Edgar Kaiser, Chairman and Founder of Kaiser Aluminium & Chemical Corporation (KACC), the immediate past majority shareholder of VALCO.

Construction of the VALCO plant began in 1964 and commercial production of aluminium began in the Plant in March 1967.  Prior to that a series of discussions had taken place that culminated in the signing of an agreement for the construction of the Akosombo Hydro-electric Dam that also resulted in the establishment of VALCO, then owned by the two American Companies, Kaiser Aluminium & Chemical Corporation (KACC) with 90% and Aluminium Company of America (ALCOA) with 10%.

It is significant to note that in the early 1950’s studies had been conducted on the establishment of a hydroelectric dam and a ready buyer of the energy generated.  An aluminium smelter appeared to be the most obvious choice.  Those involved in the studies included British Aluminium, ALCOA, Reynolds Metal, Olin, Aluminium Limited and Kaiser Aluminium.  Most of these investors withdrew from the discussions leaving Kaiser Aluminum and Reynolds Metal.

Discussions between Government of Ghana and foreign lenders for the construction of the Akosombo Hydro-electric Project required a financial guarantee before the project could take off.  VALCO therefore became the necessary guarantor agreeing under a “take or pay” contract to purchase not less than 300 MW of the 912 MW to be produced by Akosombo for a period of 30 years with the right for a further extension of 20 years.  Under this agreement VALCO was to pay for the cost of that amount of power even when it did not take it.

In March 1967 when VALCO poured its first metal for commercial purposes the plant had a capacity of 3 cell lines made up of 100 cells per line.  Subsequently the facility was expanded with the construction of the fourth and fifth cell lines in 1970 and 1974 respectively with an installed capacity of 200,000 metric tones per year.

VALCO’s operations have been characterized by shutdowns and restarts largely due to unavailability of sufficient power to run at full capacity at all times.  Thus, the company’s production operations have averaged about 70% of installed capacity from inception. Between 1982 and 2004 when the ownership structure changed, the plant shut down and restarted operations thirteen times at various levels for the above reason.

VALCO’s history can be structured into two; namely the illustrious history from the days of its establishment until the beginning of another chapter following the exit of Kaiser Aluminum from the scene, a chapter that we believe should take the Company and Ghana to much higher level.

It is instructive to note that between March 2002 and January 2003 VALCO progressively shut down three (3) of its four (4) operating lines due to power shortage.  In May 2003, we shut down the last line, as it had become uneconomical to operate at that level.  As a result majority of our employees were sent home, the few that was retained formed the nucleus for an anticipated restart of operations after improved power availability and successful power tariff negotiations was in place.  In October 2004, however, the plant was completely shut down when the Government of Ghana (GoG) purchased the 90% stake offered it by Kaiser Aluminum & Chemical Corporation (KACC).  For the next six months discussions went on between Government of Ghana, senior management of VALCO and representatives of ALCOA, the minority shareholders on restart of operations.  At the same time a transitional team was put in place to protect the plant from loss and deterioration and also to coordinate activities with stakeholders to facilitate the resumption of operations.In June 2008 ALCOA sold its pecentage of share(10%) to the Government of Ghana, making Government of Ghana the sole owner of VALCO.

In january 2011 smelting operations resumed at the plant, this time under what was termed the New VALCO, which is wholly managed by Ghanaians.  The company is currently operating one of five cell lines (20% capacity) employing over 500 employees (May 2011).

VALCO uses electricity and other fuels in amounts that gave economic justification for the viability of West Africa Gas Pipeline Project (WAGPP) and will continue to do so for operation of future independent power producers (IPP) and similar projects in the future.  VALCO is a CRITICAL agent for the realization of:

  • Ghana's dream of an integrated aluminuim industry.
  • Rapid industrialization.
  • Become a middle-income economy similar to the economic success stories of countries such as United States, China , South Korea, India and Brazil etc.
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