The Minerals Income and Investment Fund (MIIF) is considering a GH₵300million investment in the Ada-Songor Salt project operated by Electrochem Ghana Limited, a subsidiary of the McDan Group of Companies.
The investment, which hinges on the condition that Electrochem Ghana Limited floats its shares on Ghana Stock Exchange (GSE), holds the promise of propelling a sprawling 41,000-acre facility to become the continent’s largest salt industrial complex. This requirement underscores MIIF’s commitment to fostering growth and transparency within the extractive sector, its Chief Executive Officer Edward Nana Yaw Koranteng explained.
He said the Fund is actively exploring an opportunity to invest in the project. The anticipated infusion of GH₵300million into the Ada-Songor salt project, he said, will not only redefine the salt industry in the country but also set a new standard for salt production in Africa.
“We are still working out the process; it is not a done deal. We are currently going through the due diligence processes, including ‘know your client’ (KYC) while collaborating with other transaction advisors to ensure the success of this transformative deal,” he said.
The importance of this potential investment, he noted, cannot be overstated. Industrial salt boasts a staggering array of applications numbering approximately 14,000. These applications span vital sectors such as pharmaceuticals, bicarbonates and oil and gas, among others.
Meanwhile, the development of a robust industrial salt sector, he intimated, is poised to catalyse economic transformation by supporting domestic industries, reducing imports and fostering self-reliance.
The MIIF boss disclosed this to B&FT at a stakeholder forum in Accra. The forum was themed ‘MIIF as a lever for development in Ghana, investing in a responsible, transparent, accountable manner to secure the future wealth for Ghana’.
MIIF is the state’s minerals sovereign fund established by the Minerals Income Investment Fund Act, Act 978. It is intended to serve as a strategic lever to maximise the mining sector’s value creation potential for sustainable national development.
The Fund’s mandate is to manage the country’s equity interest in mining companies and receive dividends from these equity interests; to receive mineral royalties and other related income due the state from mining; and to provide for management and investment of these funds.
It will be recalled that President Nana Akufo-Addo recently cut the tape for official commencement of work on the US$88million salt production plant at Ada, in the Greater Accra Region.
The newly-established facility is said to hold the potential to make salt one of the country’s leading export commodities to the African market under the African Continental Free Trade Area (AfCFTA) arrangement.
The project is estimated to yield about US$2billion to the economy in the short-to-middle-term, making it one of the major sources of foreign exchange by 2026 under AfCFTA when the Ada Songor Salt project is fully completed.
With an initial production capacity of one million metric tonnes of salt per year, the project is to be scaled-up to about two million tonnes by 2025. The concession meanwhile holds an ultimate capacity of 15 million tonnes per year when all phases are fully completed.
With salt identified as a critical commodity for food security and industrialisation of the African continent, the 15 million capacity long-term target is projected to feed the demand of most countries on the continent – with Ghana and Senegal standing tall as the only countries with natural salt minerals in West Africa.
Chairperson-McDan Group of Companies, Daniel McKorley, had told B&FT that with deliberate efforts and the right financial facility, “we can easily scale-up this project to 15 million m/t per annum in five years”.
“With the completion of this phase one, we are currently creating about 3,000 jobs. And the most important thing is that it doesn’t require a degree to work here; this is the kind of job that members of this community need. About 98 percent of the workforce here will not require a degree to work, and that is what creating jobs means for a country like Ghana,” he said earlier this year.
He explained that the project’s first phase is the production of salt, while the second phase is establishing a world-class salt refinery; and the third involves a chlor-alkali plant for the highest level of industrial demands.