…..But nagging questions raised
The Herald, has picked up reports of a suspicious GH¢300 million transaction between the Minerals Income Investment Fund (MIIF) and Electrochem, the company that is running the Ada Songhor Salt project under a 15 year lease.
MIIF, set up by Act (978) of 2018, is said to be busy in negotiations with the owner of Electrochem, Daniel McKorley, who doubles as the Chief Executive Officer of the McDan Group of Companies towards owning 6percent stake in the privately-owned salt project.
Insiders are not happy with the negotiations, insisting that the state is being shortchanged by the parties.
Some three weeks ago, the President, Nana Akufo–Addo in the company of several appointees, including the Trade and Industry Minister, KT Hammond, inaugurated what was priced as an 88 million-dollar ultra-modern salt mine and processing plant at Songhor in the Ada West District of the Greater Accra region.
But insiders told The Herald that, the price tag put on Electrochem, is far from the truth as there is no independent valuation of the company to warrant the amount.
They are more worried that the state-owned MIIF, is about to dish out a whopping GH¢ 300 million the equivalent of the US$30 million to Electrochem for a paltry 6percent into the salt mines, and are demanding to see feasibility reports as to how viable the project is and how much Daniel McKorley, the sole investor has pumped into the business.
They argued that in their estimation, the owner of Electrochem has not pumped even US$10 million into his business, warning MIIF executives which is heavily influenced by Gabby Asare Otchere to do the right thing before any money is given to Electrochem, whose owner is also a known close associate of the Akufo-Addo family.
Attempts, including a visit to his Okponglo office to speak to Daniel McKorley over the concerns raised about the Electrochem, were unsuccessful as both parties could not agree on a suitable time.
According to its website, MIIF, is a sovereign minerals fund mandated by the Minerals Income Investment Fund 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 the controversial Agyapa Royalties Company, the only state-owned gold royalties company in Africa”, the website said.
Commissioning the salt mine and processing plant which is to produce 1 million metric tons of salt yearly, President Akufo-Addo, reaffirmed his government’s commitment to collaborating with the private sector to drive the development of the extractive industry.
The Herald has meanwhile, seen a circular from MIIF saying it is “holding a stakeholder conclave on September 27, 2023 at the Movenpick Ambassador Hotel, Accra to discuss the performance and potential of the fund”.
It said the Minerals Income Investment Fund (Act 978) 2018, the Fund has been duly established with a three-pronged mandate. Receive minerals royalties on behalf of the government, Invest the Royalties on behalf of the people in a transparent, beneficial, accountable, and sustainable way and Manage the equity interest of the state in all large-scale mines in which the state has a carried interest.
So far, the MIIF circular has mentioned that “the Fund concluded a $40 million investment in Asante Gold Corporation, a gold exploration and production company trading on the Canadian, Frankfurt and Ghana stock exchanges. All the assets of AsanteCorp are based in Ghana”.
“MIIF has also concluded GH¢ 25 Million Cedi investment in the Injaro Venture Capital Trust Fund (Private Equity) as a conduit to support the funding of mining support services in line with Government of Ghana’s local content policy”.
“Other approved investments include US$32.9 Million equity investment in Atlantic Lithium an LSE AIX listed Australian company which has discovered commercial deposits of Lithium in the Mankessim area in the Central region. The investment is two pronged with a 6% stake in the local asset and a 3.05% stake in the Holding Company”.
“A soon to close GH¢ 300 million stake in Electrochem , the company that is running the Ada Songhor Salt project under a 15 year lease”.
Below is the circular the MIIF sent out entitled “CONCEPT NOTE- MIIF STAKEHOLDER CONCLAVE/FORUM”.
Introduction
Further to the Minerals Income Investment Fund (Act 978) 2018, the Fund has been duly established with a three-pronged mandate.
1) Receive minerals royalties on behalf of the government
2) Invest the Royalties on behalf of the people in a transparent, beneficial, accountable, and sustainable way.
3) Manage the equity interest of the state in all large-scale mines in which the state has a carried interest.
An added charge to the mandate is also to reduce government exposures to budgetary shortfalls due to volatility in commodity prices on the world market.
The Minerals Income Investment Fund under a new management from 2021 is on an upward trajectory. Assets under management (AUM) are projected to hit $1 billion by January 2024.
The Fund concluded a $40 million investment in Asante Gold Corporation, a gold exploration and production company trading on the Canadian, Frankfurt and Ghana stock exchanges. All the assets of AsanteCorp are based in Ghana.
MIIF has also concluded GH¢ 25 Million Cedi investment in the Injaro Venture Capital Trust Fund (Private Equity) as a conduit to support the funding of mining support services in line with Government of Ghana’s local content policy.
Other approved investments include US$32.9 Million equity investment in Atlantic Lithium an LSE AIX listed Australian company which has discovered commercial deposits of Lithium in the Mankessim area in the Central region. The investment is two pronged with a 6% stake in the local asset and a 3.05% stake in the Holding Company.
A soon to close GH¢ 300 million stake in Electrochem , the company that is running the Ada Songhor Salt project under a 15 year lease.
The concluded investments above and expansion of the royalties’ tax net, good treasury management which has seen sound short investments through the local banks coupled with a rigorous collection regime have culminated in a brilliant performance overall for the fund.
The Opportunity
In fulfilling its mandate of investing to guarantee the future wealth of the country, MIIF sees unbridled oppoertunities in many sectors which are especially nascent in Ghana or are totally non-existent in the space.
I) A Gold Backed ETF on the Stock Exchange- MIIF intends to create a new tradable asset on the Ghana Stock exchange which is backed by Gold. This product is yet to be introduced to the Ghana Stock Exchange even though ABSA SA has a similar product from South Africa currently listed on the Ghana Bourse.
II) Gold Trading- MIIF has set up a Gold Trading Desk as a means to leverage the opportunities in the global gold trade business.
III) Small Scale mining Incubation Project- a revolutionary programme that seeks to formalize the small-scale gold mining sector by injecting equity in selected licensed small scale gold mining companies through the provision of capital, a guaranteed offtake, capital assists such as machinery and imbue a framework of responsible mining practices and corporate governance. The goal of SSMP is to eventually list on the Stock Exchange and bring these small-scale mines to ‘Junior Mines’ status.
The President’s Charge
“Hopeful this Fund, when properly managed and selectively invested, will over the period of time erase that image and give us a new architecture in the mining industry which includes significant Ghanaian players.” President Nana Addo Dankwa Akufo-Addo.
In October 2021, President Akufo-Addo appointed a new Board of Directors for MIIF chaired by Professor Douglas Boateng, a Professor Extraordinaire in Supply Chain Management and Edward Nana Yaw Koranteng, a lawyer and an investment banker with experience covering Ghana, United Kingdom, and Sub-Saharan Africa, as Chief Executive Officer of the Fund.
The president charged MIIF to create long term value for Ghanaians, create a conducive investment environment around the participation of Ghanaians in the mining sector and to make Ghanaians the primary beneficiaries of the natural resources God has bestowed on our motherland. These words underpin the objectives of the Fund and are fundamental in the way the fund does its business.
The Conclave/ Forum
MIIF is holding a stakeholder conclave on September 27, 2023 at the Movenpick Ambassador Hotel, Accra to discuss the performance and potential of the fund.
The primary objective of this forum is to create a contribution loop where stakeholders can input their extensive experience into the programs of the Fund and further engage on how the potential of the Fund can even be stretched further for the benefit of Ghana.
The stakeholder conclave will also provide the avenue to answer all questions around the Fund and to advance the inclusionary path going forward.
Invited Attendees
Primary attendees to the forum will be Civil Society Oragnisations, partner agencies (MINCOM), GRA, EOCO, GSA and EPA), industry players such as the Chamber of Mines, Academia and selected members of the media. Board Members and the Investment Advisory Committee of the Fund will be present at the meeting as well.
