…Says everything is clean
Electrochem Ghana Limited, a subsidiary of the McDan Group of Companies, has insisted acting above board in its negotiation with the Minerals Income and Investment Fund (MIIF) for a GH₵300 million investment into its Ada-Songor Salt project.
The company, in an interaction with The Herald, asserted that nothing untoward is happening between it and the state agency; set up by Act (978) of 2018.
The interaction, follows a recent report by The Herald of a GH₵300 million investment that MIIF, a state body, intends pumping into the Ada-Songor Salt project with claims that there are no feasibility studies, as well as an independent valuation backing the colossal financial arrangement.
Daniel McKorley, the Chief Executive Officer of the McDan Group of Companies, speaking to The Herald on the matter via phone, held that there was no way that the MIIF will be pumping money into the salt project, as it is doing in the gold mining sector and the recent discoveries of lithium in Ghana, without any feasibility studies.
“You think an organization like MIIF and a sensitive thing like Ada, where everybody’s eyes is on it, with all the controversies, will MIIF do anything wrong? They won’t dare. If I tell you, we have been on this for one and half years. They have visited the site. Their whole board. Their whole management with Ernst and Young, KPMG. They have visited there three times. They once came with the Ghana Stock Exchange”.
Referring to the President, Nana Akufo-Addo’s impression about the Ada Songhor Salt project, Mr McKorley, revealed how surprised he was at the facility when he visited the place recently to inaugurate it, saying he exclaimed “wow, such a thing in Ghana?
The McDan Group’s CEO, many times in reference to the MIIF discussion said “This did not start yesterday”.
“When I started, a lot of people didn’t understand. Even the people in Ada, they didn’t understand. They thought so many wrong things had been made, but when it started going into documentation and looking at everything, when they started seeing the development and the benefits; they themselves getting employed. They saw the change, they saw the change in the area, and they all started calming down. Change is difficult, but when it is a positive change, everybody embraces it”.
He decried the cynicism in the country. “This is Ghana and we need to build our own…. Let’s not destroy our own”, he lamented, saying he did not go chasing after MIIF, but rather they came after him upon realizing the prospects of the project.
Mr McKorley, disclosed that the “the independent valuer is no other company, but Ernst and Young – EY. That tells you the seriousness of what is going on”.
He revealed that currently, the Electrochem and others are working on shareholding structure, and recalled being angry at a point in time habouring the feeling that the others were wasting his time in the negotiations as about five international companies are lined up ready to invest in the company.
“I got to a point, I got angry. I told them, you people are wasting my time. Salt development had to do with workers and I had spent 88 million dollars in there. It is not a small investment I have done in there”.
“If I had not invested money, will a bank like ECOBANK come on board or MIIF, will come on board? They will not. In Ghana unless you reach certain level before somebody will look at you. Those days I was struggling, everybody was cursing me. Saying ooh you’re taking their livelihood. It is been given to you very badly. When the people… when I am doing something, I don’t talk. Before you see, it’s happening. This country is a small country. I will be the last person to do anything wrong. If you want to grow big in this country, be careful what you do and what you touch”.
He told The Herald he is working around the clock to make the company available to ordinary Ghanaians to invest in by way of buying shares as investing in such projects are more viable than Ghana Bonds which in recent years, have suffered head cuts, leaving many, including pensioners with pains and suffering.
Additional findings by The Herald, is that Ghana Stock Exchange currently sees Electrochem as a one-man business with no structures, especially management board and want this rectified before it could be listed or allowed to float shares.
Again, absence of a readily available market for the sale of Electrochem’s salt, has also been mentioned as one of the key issues that MIIF and Ghana Stock Exchange, have also flagged.
Furthermore, the tracking of Electrochem’s salt from Ada to Tema Port for shipment to international markets, has also been cited as requiring certain technical infrastructure at the port which is not yet in place.
MIIF has meanwhile been offering some explanations since The Herald’s publication. It said that the GHC 300 million investment hinges on the condition that Electrochem floats its shares on the Ghana Stock Exchange (GSE), saying it holds the promise of propelling a sprawling 41,000-acre facility to become the continent’s largest salt industrial complex.
This requirement underscores MIIF’s commitment to fostering growth and transparency within the extractive sector, its Chief Executive Officer Edward Nana Yaw Koranteng explained.
He said the Fund is actively exploring an opportunity to invest in the project. The anticipated infusion of GH₵300 million into the Ada-Songor salt project, he said, will not only redefine the salt industry in the country but also set a new standard for salt production in Africa.
“We are still working out the process; it is not a done deal. We are currently going through the due diligence processes, including ‘know your client’ (KYC) while collaborating with other transaction advisors to ensure the success of this transformative deal,” he said.
The importance of this potential investment, he noted, cannot be overstated. Industrial salt boasts a staggering array of applications numbering approximately 14,000.
These applications span vital sectors such as pharmaceuticals, bicarbonates, and oil and gas, among others.
Meanwhile, the development of a robust industrial salt sector, he intimated, is poised to catalyse economic transformation by supporting domestic industries, reducing imports, and fostering self-reliance.
The MIIF boss disclosed this to B&FT at a stakeholder forum in Accra. The forum was themed ‘MIIF as a lever for development in Ghana, investing in a responsible, transparent, accountable manner to secure the future wealth for Ghana’.
MIIF is the state’s minerals sovereign fund established by the Minerals Income Investment Fund Act, Act 978. It is intended to serve as a strategic lever to maximise the mining sector’s value-creation potential for sustainable national development.
The Fund’s mandate is to manage the country’s equity interest in mining companies and receive dividends from these equity interests; to receive mineral royalties and other related income due the state from mining, and to provide for management and investment of these funds.
It will be recalled that President Nana Akufo-Addo recently cut the tape for official commencement of work on the US$88 million salt production plant at Ada, in the Greater Accra Region.
The newly-established facility is said to hold the potential to make salt one of the country’s leading export commodities to the African market under the African Continental Free Trade Area (AfCFTA) arrangement.
The project is estimated to yield about US$2billion to the economy in the short-to-middle-term, making it one of the major sources of foreign exchange by 2026 under AfCFTA when the Ada Songor Salt project is fully completed.
With an initial production capacity of one million metric tonnes of salt per year, the project is to be scaled-up to about two million tonnes by 2025. The concession meanwhile holds an ultimate capacity of 15 million tonnes per year when all phases are fully completed.
With salt identified as a critical commodity for food security and industrialisation of the African continent, the 15 million capacity long-term target is projected to feed the demand of most countries on the continent – with Ghana and Senegal standing tall as the only countries with natural salt minerals in West Africa.
Chairperson-McDan Group of Companies, Daniel McKorley, had told B&FT that with deliberate efforts and the right financial facility, “we can easily scale up this project to 15 million m/t per annum in five years”.
“With the completion of this phase one, we are currently creating about 3,000 jobs. And the most important thing is that it doesn’t require a degree to work here; this is the kind of job that members of this community need. About 98 percent of the workforce here will not require a degree to work, and that is what creating jobs means for a country like Ghana,” he said earlier this year.
He explained that the project’s first phase is the production of salt, while the second phase is establishing a world-class salt refinery; and the third involves a chlor-alkali plant for the highest level of industrial demands.