There was ecstasy in Ghana when the West African government recently announced that it had sold the state-owned Ghana Consolidated Diamonds (GCD) to a private investor, Great Consolidated Diamond Ghana (GCDGL).
GCDGL, which bought the diamond mine for $17 million but had so far managed to pay $1.7 million, was wholly-owned by Ghanaian businessmen.
It promised to invest over $100 million into its operations.
Inco of Canada and De Beers that had initially joined the race to take over the operation, withdrew their bids at the last minute, citing technical and unmatched corporate standards respectively, Modern Ghana said.
The Ghanaian government described the move to sell the defunct mine to locals as “bold”.
“The NDC government's bold step in activating the Akwatia Mines, through an indigenous investor, for the purposes of salvaging the unemployment situation and accelerating economic development in the Eastern Region, is very much in line with the national aspirations of Ghana, as conveyed in the Directive Principles of State Policy enshrined in the Constitution,” said Ghana vice president John Dramani Mahama.
He said the mining sector, in general, was an important segment of the Ghanaian economy.
The sector, Mahama said, also presented a strong potential to generate substantial revenue to the country.
Meanwhile, GCDGL chairman Kwame Gyan said the company was adequately prepared to operationalise its multi-dimensional strategy to revive the fortunes of the mine.
“We will endeavour to deliver on the trust imposed (sic) in us by the government and the people of Akwatia who have solidly stood behind us as we went through the competitive bidding process,” he was quoted as saying by Modern Ghana.
Reports say the company had already started assembling new equipment and machinery at the mine.
However, despite this high optimism, the question asked by neutrals was whether the new owners would be able to convalesce operations at the derelict mine given the amount of money targeted for investment.
The down-payment made to Accra, represented just a mere 10 percent of the selling price of the operation, something that also left many wondering if GCDGL had a big wallet to catapult the project to dizzy heights.
From the look of things there might not be a huge change, given that it was lack of adequate financial resources that precipitated the total collapse of the mine in 2007, rendering over 800 workers jobless.
GCD produced about 2.5 million carats annually between 1960 and 1980.
Production, however, plummeted to 157,000 carats in 2003 and 79,000 carats in 2007, the year it folded up.
The country produced 376,371 carats in 2009, clearly showing that there were other small diamond operations in the country.
This was significantly low for a country that once produced over 2 million carats annually and that also entertains hopes of being a significant player in the African diamond industry, let alone on the globe.
From the look of things, Ghana was pinning its hopes to transform the fortunes of the country’s diamond industry on the “revived” mine.
However, this will not happen overnight, as it would take hard work and huge financial injection to improve operations at the derelict mine.
GCDGL, just like Ghana, as a nation, certainly have a long and tough road ahead.
Mathew Nyaungwa, Rough&Polished
