Interview: Edward Koranteng
In what ways is the MIIF contributing to the development of the economy?
KORANTENG: The MIIF was established to add value by managing the government’s equity interests in mining, receiving mineral royalties from mining companies and reinvesting these funds in the sector. The focus is not only on gold, but also on minerals that are critical to the country’s economy. One such example is salt, which is used in various industries, such as oil and gas, pharmaceuticals and textiles. Ghana arguably has sub-Saharan Africa’s largest salt ponds, including the Ada Songor project, which encompasses roughly 41,000 acres of salt fields, and has the potential to produce over 1m tonnes of industrial salt for both domestic and foreign markets. This project, which is being evaluated for investment, could turn the country into a significant player in the African and global salt market.
Efforts are also ongoing to formalise small-scale gold mining operations and transform small-scale mining entities into medium to large operations through the MIIF’s Small-Scale Mining Incubation Programme (SSMIP). The SSMIP aims to give local operators targeted financing and investment options, offering beneficiaries funding from the MIIF for mining supplies and equipment. The economic benefits are expected to manifest in higher local production capacity, job opportunities and market access for small-scale gold miners.
To what extent is the discovery of lithium deposits expected to boost the green transition?
KORANTENG: The discovery of lithium in commercial quantities is a significant growth pole for Ghana amid the global transition from fossil fuels to renewable energy. This transition is gaining pace due to the rapid expansion of the electric vehicle (EV) market. With global automobile brands establishing assembly plants in Ghana, the country seeks to capitalise on the global lithium battery market – projected to reach $100bn by 2025 – by positioning itself as an EV centre in sub-Saharan Africa. The global unprocessed lithium market is valued at around $6.8bn, with analysts predicting it to grow to about $10bn by 2028.
The MIIF is aggressively seeking to make a direct equity investment in lithium production and processing firms, and play a major role as a strategic partner in defining value for the government within the industry. The intent is to support the entire value chain, and partner with other investors to fund the Ghanaian and African lithium space. This approach is expected to create a de-risking tool for investors in the industry, thereby maximising benefits for all stakeholders. In this vein, the MIIF is investing $32.9m in Australia’s Atlantic Lithium, in line with the company’s development of its Ewoyaa lithium mine in Ghana.
Lithium also offers potential opportunities for the value chain through by-products such as feldspar, which is the main resource in manufacturing ceramics and fibreglass. The government’s goal is to capitalise on the emerging African Continental Free Trade Area to develop the ceramics industry for export.
What is your assessment of the fund’s performance and its future prospects?
KORANTENG: The overall assets under management (AUM) increased to GHS3.2bn ($291m) in 2022 from the initial GHS1.7bn ($154.4m) in 2021, representing a growth of 87.4% and outperforming global benchmarked indices. This rise was largely supported by creative approaches to raising royalty and investment income by adding sand and salt to the list of royalty-paying minerals, which helped diversify the source of such payments away from gold.
The original goal was to grow the fund’s AUM to $500m by the end of 2025. With prudent investment, fund management and other treasury operations, the MIIF is likely to achieve that goal by the end of 2023. The fund is now aiming to achieve a more ambitious objective of increasing AUM to $1bn by the end of 2024.
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