Minerals Income Investment Fund to invest in Lithium and Salt

The Minerals Income Investment Fund (MIIF) plans to invest in Lithium and Salt as part of its investment plans for 2022, Chief Executive Officer Edward Nana Yaw Koranteng has told investors and delegates on the sidelines of the Mining Indaba recently held in Cape Town, South Africa.

MIIF told the biggest mining investment event in Africa that Ghana has proven commercial deposits in lithium, which is the basic resource needed to power the burgeoning electrical vehicles (EV) market.

“The data is exceptional, with additional opportunities from the value chain and for byproducts such as feldspar – the main resource in ceramics and fibre-glass,” Koranteng said.

According to Mr. Koranteng, the global market for unprocessed lithium is around US$6.83billion with analysts projecting steady growth to circa US$10billion by 2028, and the global lithium battery market is projected to hit US$100billion by 2025 due to the rapid expansion in the EV market.

“We clearly see lithium as a growth pole after analysing all the data, and have started deliberations with Atlantic Lithium which holds concessions with recoverable grade of 560 km2 miles in Ghana,” Edward Nana Yaw Koranteng told the investors gathered in Cape Town.

Mr. Koranteng stressed: “A direct equity investment provides a good opportunity for MIIF to come in at an early stage, considering Atlantic’s planned listing in August 2022. We are looking at an IRR of 125% in four years and a projected revenue of more than US$1.5billion over eight years,” the MIIF CEO said.

Investment in Salt

Mr. Koranteng, who is seeking to build Africa’s biggest sovereign minerals fund, told the investor community at the South Africa Indaba that MIIF is also turning its funds to the development of salt as it seeks to grow its non-gold mineral assets.

“Salt should hit a US$33billion market value in 2026, with the industrial salt market size estimated at circa US$14billion in 2020. The industrial salt sector holds much promise for Ghana, with West African regional demand alone estimated at circa US$600million dollars per annum,” said Koranteng.

Ghana and Senegal are the only countries with the resource potential to produce industrial salt in West Africa to meet such demand, with Ghana having a much more developed base. With proximity to Nigeria, which is the biggest consumer of salt in West Africa, the potential of salt for Ghana is enormous.

“The Ada Songhor salt ponds have a proven track-record of producing high quality evaporated salt, about 41,000 acres of lagoon basin with a significant potential for large-scale salt production and industrial use, as well as for export.

“A full development of the salt ponds would arguably create sub-Saharan Africa’s largest salt ponds complex. The current fields have approximately 13,000 acres of salt ponds and pans, but production averages only about 20% of capacity.

“In our view, there is potential to produce over a million tonnes of salt and other industrial chemicals for both the local and international markets – making Ghana the centre of salt production in the shortest possible time. MIIF intends to invest about US$30million into the sector and has already been approached by potential co-investors,” Koranteng concluded.

The Strategic thrust of MIIF

The strategic intent of MIIF is to derive long-term value for the citizens of Ghana by investing and holding equity positions across the entire value chain of all minerals in the country.

MIIF recently acquired over 4.65% being over 14 million shares in Asante Gold Corporation, which has substantive gold assets in Ghana and is traded on the Canadian and Frankfurt stock exchanges.

The Fund is also seeking to support formalisation of the small-scale gold mining sector through a programme dubbed the Small-Scale Mining Incubation Programme (SSMIP). This programme is being done with support from the Ministry of Lands and Natural Resources and Minerals Commission.

The incubation programme, which costs US$500million, plans to provide tracked mining equipment, a gold-tracing mechanism and a guaranteed offtake at a discount to licenced small-scale gold mining companies in Ghana, on condition that these mines operate under strict corporate governance principles and mine in an environmentally friendly manner as prescribed by law.

Mr. Koranteng stated: “This phase of the incubation programme is an offtake funding arrangement with no direct recourse to MIIF’s finances. It will be the most transformational funding arrangement for artisanal mining in Africa, and could lead to a 50% increase in small-scale mining gold output within three years of implementation”.

According to Koranteng, the small-scale gold mining sector contributes circa 30% of Ghana’s total gold output and employs more than 10% of Ghana’s population (directly and indirectly).

MIIF is a sovereign minerals fund mandated by the Minerals Income Investment Fund Act 2018, (Act 978) as amended, to maximise the value of Dividend and Royalties income accruing to the Republic of Ghana in a beneficial, accountable and sustainable manner; and to monetise Ghana’s mineral wealth in a manner that will bring long-term value to Ghana.

MIIF also has 100% ownership of Agyapa Royalties Company, which it intends to list on the London Stock Exchange and Ghana Stock Exchange.