Scrap-export ban proves ineffective

Local steel manufacturers are still reeling under the weight of the unbridled export of scrap metals in spite of a 2013 ban of the practice.

Officials at Tema Steel Company and Sentuo Steel Limited in Tema told visiting parliamentarians that lack of strict enforcement of the ban has allowed unscrupulous persons to continue smuggling tonnes of the raw material out of the country.

“The fact is that people are still exporting scrap out of this country. The net effect is that it is the un-exportable scrap that we get. It increases our cost,” George Andoh, chairman of the Board of Sentuo Steel, told the parliamentarians.

Scrap metals come in grades; industrial scraps are considered to be of a higher grade due to their high recovery rate, while domestic scraps have a low recovery rate.

“If we are going to aid the steel industry we should look at measures of even producing scrap in Ghana. Steel is one of the most strategic industries you can have in developing your economy. For nearly every construction activity you undertake, you need steel...Steel is even more important than aluminium in our economy right now,” Mr. Andoh said.

Sentuo Steel Limited is one of five steel manufacturers in the country, set up two years ago and currently producing about 120,000 tonnes of iron rods per annum, which represents 40 percent of its capacity.

The steel industry in Ghana has been struggling to stay on its feet due to a number of factors including costly and erratic power supply and the lack of good quality scrap.

In a January 21, 2014 letter addressed to then Trade and Industry Minister Haruna Iddrisu, the steel manufacturers reported that a company in the Tema Heavy Industrial Area shipped up to 20 containers of ferrous scrap metals from the Tema port to destinations in Asia.

The letter, signed by the chairman of Steel Manufacturing Association of Ghana (SMAG), M. J Patel, noted that the smugglers were taking advantage of an exemption given to certain companies to export non-ferrous scrap metals.

Lack of strict supervision of the exemption by customs, the association said, was responsible for the smuggling.

“It looks like there is a leakage. Can we raise the question of a task force to enforce the ban?” Dr. Kwabena Donkor, chairman of the Parliamentary Select Committee of Mines and Energy said after hearing the concerns.