Electrochem Ghana targets additional salt capacity despite local concerns

News Analysis

6

Dec

2023

Electrochem Ghana targets additional salt capacity despite local concerns

  • Sean Hoffman

Electrochem Ghana has invested US$88M into the Ada Songor salt project, aiming to produce more than 2Mtpy of solar salt by 2025. However, the company faces some local opposition to achieving this.

Electrochem Ghana (EG), a subsidiary of McDan Group, is developing its salt mining operations at Ada Songor and is attempting to heavily involve the community every step of the way. The company was granted mining lease agreements for 15 years in 2020 to mine and produce salt at Ada Songor. The concession spans 16600ha (166km2), and the company has a target annual production capacity of 1Mt in 2024, and 2Mt by 2027.

 

The Ada Songor area in Ghana has a long history of salt production spanning decades, by both large-scale productions and artisanal miners. In the early 1970s, two companies acquired lands and salt production leases in the area, however, due to conflict with the local community, the mining leases were cancelled in 1992. The government then established a temporary entity to run the salt operations until a permanent solution could be found.

 

Nearly 30 years later, four such entities have attempted to implement their operations, with no long-lived success. With its new approach, Electrochem Ghana has the backing of the Ada traditional council, as well as extensive employment of the local community (>3,000 employed in 2023 with an additional 4,000 planned for 2024). In addition, the construction of community pans for artisanal miners bordering the company’s concession in the Ada West District was started in February 2022. Despite these initiatives and backing, there has been an ongoing conflict since 2021, when Songor Lagoon basin communities refused to give up the lagoon, their primary source of livelihood. EG has attempted to secure its concession, however, there has been significant resistance by the community and violent conflict between police, Electrochem land guards, and community members.

 

Electrochem started work to revamp the operations in 2021, and the refurbished 650ktpy salt plant was commissioned in August 2023. However, the plant is currently only operating at 30% capacity following incursions into the concession in the lagoon’s catchment area. The company has ceded portions of its concession to communities in the area to mine with refilling of the brine after harvest, for the sake of community harmony so that there will be a livelihood for them alongside the project.

The operation highlights the tensions that can arise between large-scale salt and artisanal producers that occur despite the best efforts to remedy and avoid the situation. It remains to be seen whether the steps taken by EG will be sufficient or whether it will be the fifth company to win the mining licences but fail to succeed in the longer term.

Salt production in Ghana is around 300ktpy with imports standing at 62kt in 2022. The success of EG’s Ada Songor salt project would satisfy domestic consumption and be targeted at exports to the West African market and possibly to Europe. The company is already exporting to Cameroon and Spain. Currently, the whole African market is an estimated 7Mpty but growing as the population increases, particularly for food-grade salt and industrial uses.


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