Ghana’s bauxite for infrastructure deal with China’s Sinohydro faces environmental concerns
- Sinohydro project draws fire from conservationists who warn that mining in the country’s key forests would pose significant environmental risks
- Duke University report warns the cost of the proposed aluminium industry projects linked to the Sinohydro agreement would outweigh the potential benefits
Facing a severe infrastructure financing gap estimated at US$30 billion, Ghana two years ago turned to China to help it fund the building of roads, highways and power dams.
The West African nation signed a bauxite-for-infrastructure deal with Chinese state-owned firm Sinohydro Corp in 2018 that would allow the Chinese company to invest about US$2 billion in Ghana’s infrastructure.
In exchange, Ghana would use money earned from the sale of bauxite (the primary ore used to make aluminium), refined bauxite and aluminium to repay the loans. As collateral, Ghana agreed to establish an offshore escrow account for receiving revenues generated from the sale of bauxite.
But the project has drawn fire from conservationists and researchers who warn that mining in the country’s key forests would pose significant environmental and social risks.
A Duke University report warned that the cost of implementing the proposed aluminium industry projects linked to the Sinohydro agreement would outweigh the potential benefits.