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$1bn Iron, steel plant in the offing

BY: Timothy Ngnenbe
Kwabena Bonsu Fordwor (middle), Chief Executive Officer of GIISDEC, interacting with John Lester (left), Vice-President of CISDI Engineering. With them is Howard R. Barnes, Managing Partner of Intercon
Kwabena Bonsu Fordwor (middle), Chief Executive Officer of GIISDEC, interacting with John Lester (left), Vice-President of CISDI Engineering. With them is Howard R. Barnes, Managing Partner of Intercon

A consortium of investors have expressed their readiness to establish a $1-billion iron and steel industry plant in the country.

The project will be rolled out in three phases over the next three years and will cover both the downstream and upstream integrated iron and steel value chain.

The first phase, which is expected to begin this year and be completed in 18 months, will produce 800,000 tonnes of iron annually.

The production will be ramped up to 1.5 million tonnes in the second phase, to be completed within one year after commencement of operations.

The third phase will include the mining of iron ore, which the country holds an estimated 6.4 billion tonnes in reserves.

The consortium is made up of UIC Energy Ghana Limited, the local partner; CISDI Engineering Limited, a Chinese global engineering service provider, and Intercon CTS GmhH and Company KG, a Germany-based international consulting group.

They are currently finalising feasibility studies on the project after which they would sign agreement with the government for commencement of work.

Meeting

The Chief Executive Officer (CEO) of the Ghana Integrated Iron and Steel Development Corporation (GIISDEC), Kwabena Bonsu Fordwor, made this known after a meeting with the consortium in Accra.

The Vice-President of CISDI Engineering, John Lester; the Managing Partner of Intercon, Howard R. Barnes, and the Chairman of UIC Energy Ghana, Ken Kanyagui, were present at the meeting.

It was also attended by the Deputy CEO of GIISDEC in charge of Finance and Administration, Nicholas Andoh.

Mr Fordwor said the partnership with the private investors was in line with the mandate given the GIISDEC to rally the private sector for the development of the iron and steel industry.

He said the GIISDEC would hold 30 per cent equity in all investments in the iron and steel value chain in stake for the government.

According to the CEO, the plant was likely to be set up within the Tema industrial enclave because of proximity to the port, adding that it would create about 10,000 jobs.

Road map

For his part, Mr Kanyagui said the investors had already pumped some $500,000 into the development of a comprehensive concept studies that looked at opportunities in the entire iron and steel value chain.

"We are currently looking at finalising feasibility studies and signing the remaining agreements with the government to pave the way for the cutting of the sod for work to begin this year,” he said.

Mr Kanyagui said $600 million would be channeled into the first phase of the project, while the second phase would cost an additional $150 million.

On the decision to invest in the country, Mr Lester said apart from the high iron potential, the business environment and the political climate in the country were relatively conducive for investment, and said all construction and civil works would be done by the people.

"We respect the local content law and so we will ensure that almost every process of our operation is dominated by local companies and workers. It is only technological equipment which is not in Ghana that will be imported," he said.

Background

The GIISDEC was established by an Act of Parliament in March 2019 to develop and promote an integrated iron and steel industry.

The Ghana Integrated Iron and Steel Development Act 2019 (Act 988) establishes the contractual relationship among the state, GIISDEC and prospective investors in the development and promotion of the economy and efficiency of the integrated iron and steel industry along the entire iron and steel value chain.

It ranges from mining of iron ore and its related minerals to the production of iron and steel for industrialisation and economic growth.