The Ghana Manganese Company, through its holding company, the Consolidated Minerals Limited, has signed an agreement with the Ghana Railway Company Limited (GRCL), to rehabilitate part of the western rail lines from Kojokrom to Tarkwa.
The agreement will see the Ghana Manganese Company paying a freight advance of $10 million to the GRCL, for the rehabilitation project.
The amount will then be deducted from freight fees over a period of three years and five months, following a seven month moratorium during which the rehabilitation will be completed.
Mr Joe Ghartey, Minister of Railway Development, speaking at a press briefing prior to a meeting of the Rehabilitation Committee, said the agreement had been necessitated by a drop in the amount of manganese that the GRCL was able to carry for the Manganese Company Limited during the rainy season.
The GRCL, he said, will be able to pay for their operations if they carried 80,000 tonnes of manganese a month, but the company was unable to do so after the first three months of the year due to the rains. There has since been a drop to about 30,000 tonnes.
“What it does is that, it forces Ghana Manganese to go by road, which is slightly more expensive but also affects our roads. We want them to come by train, and so we decided to collaborate with them to see how we can improve the line,” he explained.
He stressed that the amount was not a loan, but an advance payment of freight to be carried; an arrangement that the Manganese Company had used in previous times to support the GRCL.
He explained that $5.1 million of the amount will be used for Capital Expenditure whiles the remaining $4.9 million will be used for operational expenditure. “Government of Ghana is matching those funds,” he assured.
Ghana Manganese Company has appointed its consultants, who will be technical advisors, and along with representatives from the government of Ghana, have formed the Rehabilitation Committee, which will meet to decide a work plan.
Mr Ghartey said the GRCL had already began work on the western line using $40 million allocated for the line from the ministry’s GH¢518.4 million budget for the sector this year; with the directive to use local expertise, especially in the GRCL.
“I’m happy to report that even before this agreement, the GRCL had started rehabilitation of the line, from Tarkwa to Nsuta, where Ghana Manganese is located,” he said.
He stated that the ministry had reviewed the railway Master Plan, which was initially envisaged to rehabilitate the old narrow gauge. It will now rehabilitate the old western line up to Tarkwa and the eastern line; up to at least Nsawam and perhaps Koforidua.
“But what we are going to do is to start the construction of the standard gauge…As I speak the final design for the standard gauge of the western rail line from Kojokrom towards Kumasi has commenced.
“This will enable us, hopefully before the end of this year, to award the contract to a contractor who can start the construction,” he stated, adding that, the preference will be given to the GRCL but the Ministry will not hesitate to use expertise from outside the country where it does not exist in Ghana.
Mr Oleg V. Sheyko, Chief Executive Officer of Consolidated Minerals Limited, noted that, while Ghana was rich in natural resources, infrastructure was a problem in some parts of the country.
Ghana Manganese, he said, wanted to increase production but was not able to do so due to infrastructural challenges in Ghana thus the agreement to rehabilitate the line. This, he explained will remove some of the bottlenecks and help the company increase its production.
“We have plans to increase up by three million tonnes this year,” he said, adding that, it also focused on creating commercial centres along the line, which will be hubs for business people living along the line.
He reiterated the company’s commitment to Ghana and to working with the ministry, not only to rehabilitate the lines, but also to further develop the region. “It is just the beginning. I strongly believe in the future of Ghana. The company has been mining for more than 100 years…We are here for the long-term and we are happy to have such strong support from the authorities in Ghana,” he stated.