Attacks on salt factory jeopardise McDan’s $88m investment

An $88 million investment in salt production by Electrochem Ghana Limited, a subsidiary of the McDan Group of Companies, is in jeopardy as the company is grappling with violent attacks and vandalism.
Such lawlessness undermines trust with both local and international investors, jeopardizing projects like the planned $30 million equity investment from the Minerals Income Investment Fund (MIIF).
A recent incident, which saw vandalism, theft, and injury to staff members, underscores the urgent need for enhanced security and government intervention to safeguard the company’s operations and economic contributions.

A vital economic driver under threat
Electrochem Ghana has been a transformative force in Ghana’s salt production industry.
Operating under a 15-year mining lease ratified by Parliament, the company employs approximately 1,800 permanent workers and over 3,000 casual laborers during the salt mining season. With an annual production capacity of 650,000 metric tonnes of high-purity salt (99.99%), the company is poised to become Africa’s largest salt producer by 2027, aiming for an output of two million metric tons per year.

Beyond production, Electrochem’s economic impact extends to job creation, community development, and national revenue generation.
The company has paid over GH₵6.1 million comprising over GH₵3.4 million in royalties and GH₵2.7 million in ground rent from 2021 to 2024.
Additionally, it has empowered women entrepreneurs with a GH₵3 million grant, which is set to expand to GH₵10 million, and invested in infrastructure such as potable water systems, health clinics, and schools in Ada.

Global Market Potential and Strategic Importance
The salt market, projected to grow from $34.1 billion in 2023 to $48.6 billion by 2030, underscores the strategic importance of Electrochem’s operations.
Salt is a critical resource with industrial, human, and animal consumption applications.
Electrochem plans to further its value addition by constructing a chlor-alkali plant, which will produce caustic soda and other chemical products, thus boosting Ghana’s industrial base.

A looming investment crisis
The recent attacks, described by Electrochem’s CEO, Abdul Razack Adams, as a disturbing trend of lawlessness, pose a severe threat to the company’s operational stability and Ghana’s investment climate.
The assailants not only vandalized company property but also stole essential office supplies and salt products.
“These attacks create uncertainty and could deter future investments vital for the growth of our company and the broader economy,” Mr. Adams lamented.

Govt’s role in securing investments
The government must act decisively to protect Electrochem Ghana’s operations and the investments it represents.
Enhanced security measures, including the deployment of law enforcement to prevent future attacks, are critical.
Prosecuting perpetrators of the recent violence will serve as a deterrent and restore confidence in Ghana’s business environment.
Electrochem’s contributions extend far beyond economic metrics. The company’s environmental restoration efforts have rejuvenated the Ada Songor Lagoon, creating livelihoods for over 300 fishermen.
Its long-term plans include the construction of a world-class salt refinery, a chemical research university, and a dedicated port to ease logistical burdens.

A call to action
The attacks on Electrochem Ghana should serve as a wake-up call for the government and security agencies.
Failure to address these incidents decisively risks derailing a project with the potential to position Ghana as a global leader in salt production and export.
Industry experts agree that the salt industry’s growth can significantly diversify Ghana’s export base and reduce trade deficits.
The Joint Committee on Mines and Energy and Lands and Forestry has affirmed the legality of Electrochem’s leases and urged the company to foster local participation and resolve disputes amicably.
However, these recommendations can only bear fruit in a secure and stable environment.
Ghana must demonstrate its commitment to protecting legitimate businesses, fostering an attractive investment climate, and ensuring the safety of employees and assets.
Electrochem Ghana’s ambitious vision is not just a corporate agenda; it is a national opportunity to create jobs, enhance industrial capabilities, and improve livelihoods in Ada and beyond. Safeguarding this investment is not optional—it is imperative for Ghana’s economic progress.
By protecting Electrochem Ghana’s operations, the government and security agencies can send a strong message that Ghana remains open for business and committed to creating a safe environment for sustainable development.
A Joint Committee on Mines and Energy and Lands and Forestry of Parliament has recommended that there is no legal basis to review the three salt mining leases of Electrochem Ghana Limited, which Parliament ratified in November 2020.
These leases, which permit ElectroChem to undertake salt mining in the Ada Songor Lagoon, are set to run for 15 years in accordance with Article 268(1) of the 1992 Constitution.
The Committee’s report followed an investigation into ElectroChem’s operations and underscored the significant economic benefits expected from the project.
The report said, “Considering the huge market of salt arising out of its multipurpose usage it is imperative to develop the salt production industry to serve as export diversification for reduction of perennial external shocks and trade deficit.”
While affirming the legality of the leases, the Committee urged ElectroChem to ensure local participation in the salt mining activities.
They recommended that the company continue to allocate spaces to local salt miners within the concession area in an arrangement that is mutually beneficial to the company and the indigenes.
The Committee also recommended that any disputes or survey challenges regarding the concession area be referred to the Minerals Commission for resolution.
They also called for enhanced security measures to maintain order in the region.

By ELVIS DARKO, Accra