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Africa's Major Aluminum Producer Closes Amid Ghana Energy Crisis


One of Africa's largest aluminum companies is due to shut down Friday in Ghana. The West African nation is facing a worsening energy crisis due to chronic power shortages caused by diminished rainfall. Reporter Efam Dovi has more from the Ghanaian capital, Accra.

Executives at Ghana's Volta Aluminum Company (VALCO) say they are not sure how long the luminum producer will remain closed. But the closure is expected to send a majority of the company's 700 employees home.

The problem is rainfall. Poor rains have led to diminished water levels in the Akomsombo Hydro-electric dam, Ghana's main source of electric power. It has also caused chronic power outages in Ghana since September last year.

Ghana relies on hydro-generation for about 60 percent of its electricity, with the balance provided by thermal power and imports from neighboring Ivory Coast.

Chronic power shortages and a nation-wide power rationing program started last June has forced VALCO to operate at less than a quarter of its capacity. Many other industries, including the hugely important gold mining industry, have also been forced to make drastic cuts in production.

VALCO chief executive Charles Mensa says the decision to close down was voluntary, but has described the situation as "regrettable." He says Ghana needs to make use of modern science and move away from it's over reliance on nature for development.

"When you look at the country as a whole, to travel 40 years and still be bedeviled by rainfall and no rainfall, rainfall and no rainfall, our agriculture is rain fed, same with our industry no rain, no industry, yes rain, then industry, we've gone so far with science that we should be able to solve this kind of problem, it shouldn't bedevil as again as we look down to the next 50 years," he said.

VALCO, which is partly owned by the world's largest aluminum producer, Pittsburgh-based Alcoa Incorporated, is a major source of primary aluminum for the world market. The company's shutdown, the 11th since its establishment 40 years ago, is also expected to affect several local companies that depend on it for the raw material.

The energy crisis also threatens to spread in the sub-region. Ghana supplies electric power to neighboring Togo and Benin.

Analysts say the persistent energy crises will affect the country's export earnings. Ghana's president, John Kufuor, in his state of the nation address last month, announced a number of long term measures aimed at solving the energy problem.

A West African Gas Pipeline which will bring natural gas from Nigeria through Benin and Togo to Ghana is due to be ready this year after some delays. Industry watchers are hopeful, that the pipeline will help ease the energy shortages in the sub-region.