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Wednesday, June 29, 2022

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 of 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 by-products such as feldspar, the main resource in ceramics and fiberglass,” Koranteng said.

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

“We clearly see lithium as a growth pole, after analyzing all the data and started deliberations with Atlantic Lithium which holds concessions with a recoverable grade of 560 km2 miles in Ghana.”

Mr. Koranteng stressed that “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 projected revenue of more than $1.5 billion 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 $33 billion market value in 2026 with industrial salt market size estimated at circa $14 billion in 2020. The industrial salt sector holds much promise for Ghana with a West African regional demand alone estimated at circa $600 million dollars per annum.”

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 its 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 for export and industrial use. Full development of the salt ponds would arguably create sub-Sahara Africa’s largest salt ponds. 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 the potential to produce over a million tons of salt and other industrial chemicals for both the local and the international markets, and make Ghana the center of salt production in the shortest possible time. MIIF intends to invest about $30 million in 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 the formalization of the small-scale gold mining sector through a program dubbed the Small-Scale Mining Incubation Program (SSMIP). This program is being done with the support of the Ministry of Lands and Natural Resources and the Minerals Commission.

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

Mr. Koranteng stated that, “this phase of the incubation program is an off-take funding arrangement with no direct recourse to MIIF’s finances. It would be the most transformational funding arrangement in 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.

About the Minerals Income Investment Fund (MIIF)

MIIF is a sovereign minerals fund mandated by the Minerals Income Investment Fund Act 2018, (Act 978) as amended, to maximize the value of dividend and royalties income accruing to the Republic of Ghana in a beneficial, accountable and sustainable manner and to monetize Ghana’s mineral wealth in a manner which would 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 the Ghana Stock Exchange.

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