Ghana has agreed to a $10 billion bauxite exploration deal with the government of China aimed at further exploiting the West African country’s vast solid mineral deposits.
Both countries reportedly agreed to the deal and signed a memorandum of understanding (MOU) during a recent four-day visit of Ghanaian Vice President Mahamudu Bawumia to Beijing at the invitation of the Chinese government.
Reuters news agency quotes senior government minister Yaw Osafo-Maafo as saying that the joint venture project will include the construction of bauxite mines and a 1,400 km railway network.
“To develop the bauxite project with its railway and converting bauxite into aluminum we will need about $10 billion … we signed an MOU,” Osafo-Maafo told reporters in late June.
Ghana has an estimated 960 million metric tons of bauxite deposits and U.S. Geological Survey data shows that the country produced 827,000 tons of bauxite and 40,000 tons of aluminum in 2013 alone.
The investment deal is a welcome development that could improve infrastructure and provide jobs at a time when Ghana is struggling with a sluggish economy brought on by falling commodity prices and weak investor confidence.
Ghanaian officials say the country can expect to earn around $460 billion from the export of refined bauxite in the coming years.
The funds from Beijing would reportedly contribute toward building 1,400 km of a planned 4,000 km railway network, which would connect bauxite mines and production sites as well as establish a rail link in to neighboring Burkina Faso.
“The money will come from the Chinese Development Bank. The implementation of the project will come from other agencies, infrastructure agencies in China,” Osafo-Maafo said.
Business analysts say the deal is the latest in the highly diversified investment portfolio of China in Africa, which spans construction, mining, agriculture, and manufacturing.