Ghana’s main aluminium outfit, the Volta Aluminium Company (VALCO), would lay off 181 workers after shutting down one of its pot lines under a new agreement reached with the government for the company to reduce its energy consumption.
Five hundred workers out of a workforce of 1,225 would have been affected, had the government insisted on its initial demand that two pot lines be closed.
Energy Minister, Albert Kan-Dapaah told Parliament Tuesday “in obedience to expert advice, we reduced supply to VALCO by 75 MW (one potline) on mid night Saturday, 2nd March, 2002.”
The reduction of 75MW translates into a reserve margin of 60MW, which is 40 per cent of the preferred reserve margin. Under the agreement reached between government and VALCO, the second pot line would be shut down if the water level of the Volta Lake, which is used for the generation of hydroelectric power, also goes down.
The government’s directive was to enable the Volta River Authority (VRA) save 150 megawatts of electricity to provide spinning reserves and repair faults without resorting to power shedding.
Ghana is facing a tight energy situation as the level of the water in the Volt Dam, which supplies nearly all the country’s energy requirements, has been very low. There are two dams on the Volta River and thermal units that use light crude oil supplement energy generated from them.
Sources said under an agreement reached between the management and the local union, the affected workers would be given their End-of-Service Benefits (ESB) in addition to “goodwill payments,” and medical coverage for a period. Those whose children are on scholarships would continue to enjoy the privilege.
The closure of the pot line means VALCO is reducing its production capacity by 25 percent to 120,000 metric tonnes per annum from its present level of 160,000 metric tonnes with four pot lines.
The closure is likely to affect raw material supply to local aluminium industries, since VALCO annually provides 20 million dollars worth of aluminium through the Minerals Commission to local aluminium companies.
The company, which has five pot lines with a capacity of 200,000 metric tonnes, shut down one of its lines in 1994 and has since then not re-opened it due to energy problems. In the even of load shedding, Mr. Kan-Dapaah served notice that preference will be given to industry. While this may inconvenience residential customers, the minister says the choice would have to be made to minimize impact on productivity and safeguard employment.
VALCO expects to operate three of the facility’s five pot lines, although the company cannot provide assurance that it will continue to receive sufficient power to operate at this rate for the rest of the year, VALCO said in a statement. The company had contested a government order in mid-February to close the pot lines within 48 hours to avert a power crisis, saying a rushed shutdown would damage the pot lines and cause many of its 1,400 employees to be laid off.
Pots are electrolytic cells arranged in lines, which reduce alumina, an intermediate raw material derived from bauxite, to aluminium metal. VALCO had said it needed at least 30 days to shut down properly to prevent molten aluminium solidifying and damaging the installations. The company has met with the Government and the Volta River Authority (VRA) and anticipate discussions will continue in respect of the current and future power situation,’’ the company said in a statement.
Meanwhile as a short-term measure, “an emergency Power Plant will be installed at Tema to increase the reserve margin to 180MW and provide greater system security. According to the Energy Minister, as a medium-term measure, a major energy conservation campaign has been initiated to address power wastage, which is estimated to be 30 per cent of total national demand.
Also, a contract has been signed to upgrade transmission between Prestea and Obuasi to allow the evacuation of all available supply from the Western Corridor, a project which is scheduled to be completed by March next year. The Energy Ministry sees the Bui Dam project and the completion of the West African Gas Pipeline Project in 2005 as the long-term measures to help address the country’s recurring energy problems.
