The Minerals Income Investment Fund (MIIF) seeks co-investment partners in its bid to invest in the entire minerals value chain of Ghana. MIIF is ready to co-invest and create a de-risking mechanism for investors says Edward Nana Yaw Koranteng, Chief Executive Officer of the Fund.
The Fund has been described as “perhaps Ghana’s most important lever of development” and took centre-stage at the two-day Ghana International Opportunities Summit (GHIOS), held in London with its offering of creating wealth through sustainable investments.
Creation of Africa’s largest Minerals Sovereign Wealth Fund
“We are building Africa’s biggest sovereign minerals fund,” said Mr Koranteng. Our Assets Under Management have grown from circa US$125million to current US$400million within 15 months, and are on track to hit US$1billion in 2027. MIIF has a robust pipeline of investments and has adopted aggressive and revolutionary mechanisms in expanding its royalty base.
“The opportunities in Ghana are enormous and go beyond the gold for which Ghana is known and even regained top spot as its number-one producer in Africa. The opportunities for investors also cover the salt sector, lithium, bauxite, iron ore, graphite, feldspar, chemical plants and refineries across the value delivery chains of these minerals. We are inviting investors to seize these opportunities in the mining sector with MIIF as a partner,” he said.
MIIF, a statutory investment company, was created by the Minerals Income Investment Fund Act, 2018 (Act 978) as amended – to receive mineral royalties on behalf of the state, invest the mineral royalties responsibly, and manage the equity stake of government in large-scale mining companies operating in the country.
The Fund went into high gear in 2021 when the CEO and a new Board of Directors were appointed by President Nana Akufo-Addo. Since then the Fund’s trajectory has been remarkable, and in 2022 outperformed benchmarked global indices such as S&P 500, FTSE 100 and the GSE-CI.
Investments in the critical minerals sector
A reclassification of minerals such as manganese, bauxite lithium and salt as ‘Priority or Critical Minerals’ has refocussed attention on their value chain development through deliberate investments by the Fund. “We see vast opportunities in manganese, lithium and salt, especially in this era of decarbonisation and the regionalisation of development and trade in Africa, Koranteng told the Summit, which was attended by the Vice President Dr. Mahamudu Bawumia.
“At present we are negotiating investments in Atlantic Lithium, an Australian company that has discovered commercial quantities of lithium at Ewoayaa near Mankessim in the Central region of Ghana. We are working on other potential significant lithium finds in Ghana. MIIF intends to invest in the processing plants for these transitive minerals, in line with the president’s vision of making Ghana a battery-hub and centre for Electronic Vehicles in Africa by leveraging on the current Ghana automobile development plan. Ultimately, we want to become a centre for Electronic Vehicle (EV) assembling or manufacturing for the whole of Africa. We are studying the proper and best ways to achieve this grand plan,” said Koranteng.
“MIIF is currently going through the process of a potential investment in industrial salt from the Ada Songhor salt basin in Ghana, which is managed by Electrochem Ghana. Salt is a mineral that has over 14,000 uses – covering textiles, food processing, oil refining, pharmaceuticals and caustic-soda among others – and is essential to the industrial needs of Ghana and West Africa.
“As the only prime industrial salt enclave in West Africa, the Ada project could feed the oil, gas and refining sectors in Nigeria for example. The Ada Songhor salt project sits on 41,000 acres, and at full development will become sub-Saharan Africa’s largest salt producing company ahead of Walvis Bay in Namibia.”
Leveraging Ghana’s gold to create more opportunities
On Gold, Mr. Koranteng bemoaned the lack of beatification that provides long-term investment opportunities. “We have been mining gold for over four hundred (400) years in Ghana, with very little beatification. MIIF seeks to invest along the value chain with emphasis on Ghanaian mining support services”.
MIIF’s plan is to create a mining eco-system of opportunities through its investments, especially in the gold mining sector which employs more than ten million people directly and indirectly. In this regard, MIIF has launched a US$60million investment initiative to support the gold small-scale mining sector. The small-scale gold mining sector is fully indigenised and contributes 30% to 40% of Ghana’s total gold output, but the sector remains informal and is fraught with illegal mining and environmental challenges. MIIF’s initiative, dubbed the Small-Scale Mining Incubation Programme (SSMIP), will contribute to formalization of the sector and lead to creating well-structured Ghanaian junior mines.
The SSMIP involves a rigorous selection of licenced small-scale mining companies with proven reserves. In this regard, MIIF will invest equity in selected mines after a thorough process: by imbuing sound corporate governance; supporting with the acquisition of machinery; providing initial working capital; providing technical support to support efficient mining; and ensuring access to market through the MIIF Trade Desk.
“Our plan is to list these companies on the Ghana Stock Exchange or the Alternative Exchange, and even push the possibility of listing on the Toronto Stock Exchange. This is the vision of President Nana Akuffo Addo for this important sector, that it be supported and formalized in this vein leading to the creation of local Ghanaian mining champions,” Mr. Koranteng emphasised.
Developing the capital market
Mr. Koranteng indicated that MIIF has signed an MoU with the Ghana Stock Exchange, which has over the past twenty years been one of the top-performing Exchanges in Africa. The arrangement with GSE is essentially on two main objectives – the first being to push mining entities in which MIIF has invested onto the Ghana Stock Exchange (GSE). An example of this is seen in the Canadian-listed Asante Gold Corporation in which MIIF has a significant holding and is now listed on the GSE.
The second objective is to list the MIIF Gold Backed Exchange Traded Fund. “We are designing a gold-backed Exchange Traded Fund (ETF) that will be listed on the GSE. Our plan is to have this listed by end of the year. The ETFs and listing of mining assets will deepen Ghanaian capital markets and provide alternative investments or alternative asset classes to Pension Funds and investors as a whole. We believe this is an opportunity for Ghanaians in the diaspora and investors worldwide,” Mr. Koranteng said.
MIIF’s presentation at the summit crowned the two-day event organised by the Ghana Investment Promotion Centre (GIPC) and Ghana High Commission to the United Kingdom.
The High Commissioner, Papa Owusu Ankomah said: “MIIF really impresses me. It has not been around for long, but I see clarity and real focus in what they are trying to do. Inviting investors into a wealth-creation space is what this summit is all about. The opportunities are enormous in Ghana, and MIIF is a good example of that opportunity. If we keep implementing these great plans Ghana will indeed by the Star of Africa. I have tremendous faith in Ghana, and MIIF exemplifies why we should all believe in Ghana,” the High Commissioner said.
The 3rd Ghana Investments and Opportunities Summit (GHIOS) was attended by several Ghanaian agencies and companies: including the Ghana Free Zones Authority, Ghana Exports Promotion Authority and Ghana EXIM Bank. The United Kingdom’s High Commissioner, Harriet Thompson, and the United Kingdom-Ghana Chamber of Commerce also participated fully in the two-day event.