Aluminium and Steel remain some of the most widely used materials across industry. Produced from bauxite and iron ore respectively, their demand has led the Ghanian government to establish laws to prohibit the export of bauxite and iron ore in their raw form. The ban is expected to take effect soon and aims to legislate the exploitation, utilisation and management of these resources. 

Defending its decision, the government claims that the legislation is “to safeguard the country's limited natural resources and learn from the past mistake of gold exportation”. The origin of the government’s export ban can be traced back to the creation of two statutory corporations, namely:

1.     Ghana Integrated Aluminium Development Corporation (GIADEC):

2.     Ghana Integrated Iron and Steel Development Corporation (GIISDEC):

A reading of section 28 from GIADEC Act, 2018 and section 30 from GIISDEC Act, 2019 confirms the state’s actions in following procedures for an export ban of bauxite and iron ore respectively. Interestingly, section 4 from both the laws talks about the need to adhere to local content requirements and measures aimed at boosting the country’s upstream and downstream operations. As a result, the Minerals and Mining Local Content and Local Participation Regulations were passed in December 2020 to promote job creation, use of local goods and services, and to improve the attractiveness of domestic businesses in Ghana’s mining sector. These regulations apply to:

1. holders of mineral rights (holders of reconnaissance and prospecting licences and mining leases); 

2. holders of licences to export or deal in minerals; and

3. registered mine support service providers

Ghana’s iron ore reserves are estimated at about six billion tonnes and there is potential to start mining operations by 2025. On the other hand, Ghana, the eleventh-largest global producer of bauxite, is also estimated to produce 10 to 20 million tons of bauxite a year from its 900 million tonne reserves. Between 2016 to 2021, production from Ghana decreased by a CAGR of 13.18%. The Ghana Export Promotion Council attributes the decline in production to underutilisation of its reserves and poor infrastructure. Given the absence of bauxite refineries in the country, the mineral is exported to Canada and Scotland for refining and imported from USA and Jamaica to obtain alumina (refined bauxite). It is then processed by the only local smelter in the country, the Volta Aluminium Company Limited (VALCO). Aluworks Ghana, one of VALCO’s major customers further leads the process in aluminium continuous casting and cold rolling mill to produce the raw materials that are used in products ranging from household appliances to aircrafts. As a result, the government has been attempting to fill the vacuum by shoring up VALCO’s production capacity alongside GIADEC’s projects that aim at expanding the country’s exploration and refining capacities. The  $1.2 billion deal (2021) to build a bauxite mine and refinery between GIADEC and the Ghanaian-owned Rocksure International showcases the government’s zeal in producing local aluminium products to substitute its annual imports of up to 45,000 tonnes. In addition, Ghana has partnered with China for obtaining the requisite infrastructure and funding to create value-addition to its existing supply chain despite the plausible environmental concerns.  

Ghana’s push to limit market access in the bauxite and iron ore industry is similar to Indonesia’s ban on the export of nickel ore for which it is currently facing legal action at the WTO. The rise in such trade restrictive measures also potentially exposes the weaknesses in upholding WTO’s trading principles. Consequently, by promising more jobs, the Ghanaian government must also be wary of the impact of layoffs that such trade-restrictive measures can have on the existing labour engaged in the mining industry. Here, the case study of PT Freeport Indonesia can act as a definite reminder about the ill effects of hasty mining regulations. As far as Ghana’s mining industry is concerned, the export of gold brings maximum revenue to the country. Hence, when introducing new laws to legislate and build its bauxite industry, which amounts to just 0.29% of the global bauxite production, the country’s competitiveness remains to be seen especially when compared to top bauxite producers such as Australia, China or India.