Despite the prevailing global economic challenges, the Minerals Income Investment Fund (MIIF) has not only weathered the storm but emerged with a record-breaking financial performance for 2023. This is a testament to MIIF’s resilience and stability, providing reassurance to our stakeholders.
The Fund’s net profit soared to GHC409 million, marking a substantial leap from GHC205 million in 2022. Similarly, the revenue surged from GHC323 million to GHC456 million over the same period, showcasing impressive financial growth that leaves us optimistic about MIIF’s future.
Edward Nana Yaw Koranteng, CEO of MIIF, indicated that the Fund is strategically evaluating its assets, including the Government of Ghana’s equity interests in mining companies. This evaluation is a move to optimize the Fund’s portfolio and ensure the best returns for our stakeholders, instilling confidence in MIIF’s future.
This evaluation is expected to elevate the Fund’s Total Assets Under Management (AUM) to approximately US$1.5 billion by 2024, a substantial increase from US$195 million in 2021.
This growth positions MIIF as one of the fastest-growing global speciality sovereign wealth funds.
Koranteng attributed the Fund’s success to the collective efforts of the MIIF team and the strategic vision of President Nana Addo Dankwa Akufo-Addo, a source of inspiration for MIIF’s achievements.
Key drivers of the Fund’s performance include an expanded royalties base, robust gold sector performance, strategic investments, and establishing a gold trade desk.
Growth Drivers
The expansion of the royalties base has been a significant factor in MIIF’s growth. Historically, gold accounted for nearly all of the Fund’s royalties.
However, since 2022, MIIF has broadened its royalties net by incorporating previously non-paying minerals such as medium-scale gold, sand winning, and salt.
Including royalties from quarries, limestone, and silver has significantly contributed to revenue growth.
MIIF’sMIIF’s expansion strategy includes two key initiatives: the establishment of an inter-agency framework and task force in 2022, which consists of the Ghana Revenue Authority (GRA), the Mineral Development Fund (MDF), the Ghana Standards Authority, the Minerals Commission, and the Economic and Organised Crime Office (EOCO).
This framework aims to enhance royalty collection, streamline communication, and ensure timely payments from non-gold mining companies.
Additionally, MIIF has developed an in-house geo-mapping, tracking, and monitoring system. This system provides real-time views of mining activities, facilitating accurate tracking and timely royalty payments.
The successful implementation of these initiatives has led to silver, salt, and sand winning contributing royalties for the first time.
| Mineral type | FY 2022 | FY 2023 | % CH VRS PY |
| Gold(Large Scale) | 1,917,684,148.73 | 2,762,520,079.71 | 44% |
| Gold(Medium Scale) | 25,451,380.53 | 50,460,662.65 | 98% |
| Managanese | 72,662,748.06 | 105,862,061.01 | 46% |
| Silver | 1,645,341.34 | 3,564,957.72 | 117% |
| Quarries | 9,018,314.45 | 12,659,772.73 | 40% |
| Sand Winners | 168,112.41 | 291,676.36 | 74% |
| Salt | 2,600,989.20 | 5,799,478.04 | 123% |
| Lime stone | 5,920,377.87 | 6,260,094.23 | 6% |
| GRAND TOTAL GHȼ | 2,035,151,412.59 | 2,947,418,782.45 | 45% |
The Head of Business Development of MIIF, Dr Kennedy Abrokwa, speaking to journalists, emphasised that with more gold mines coming on stream, such as Cardinal, Bibiani, and Chirano, the uncovering of more medium-scale gold mines, investment in salt, and discoveries of lithium and graphite, among others, the royalty base should more than triple in the next five years.
Growth in Investments and Outlook
“It is my conviction that MIIF will be a 6 billion dollar Fund within the next ten years given the growth trajectory and the nature of our investments” – MIIF CEO.
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MIIF’s investments are aligned with industrial policy and are premised on increasing equity holdings for Ghana and towards developing the entire value delivery system connected to each mineral type, says Mr Koranteng.
“The core is to diversify the mineral base where we get our royalties. We are not just looking at the mineral space; we are looking at the entire value chain.
“This is why MIIF has developed a strategy for every mineral type to extensively develop and invest in that mineral’s entire value delivery system. Ghana can only transform if we hold significant equity positions across the entire value chain for every single mineral and also align such with industrial policy; for example, salt refining is connected to over fourteen thousand uses, including textile, manufacturing, food processing, pharmaceutical and petroleum or lithium and its connect to battery and automobile manufacturing, fibreglass and ceramic production. These examples position MIIF as a major cog for industrialisation,” Koranteng stated.
Major investments by MIIF
MIIF has invested over US$40 million in the Chirano and Bibiani gold mines under the Canadian and Franfurt-listed Asante Gold Corporation. This investment by MIIF has increased Ghanaian interest to approximately 45%, making it the only large-scale gold mine with significant Ghanaian interests today.
Through its investment in the UK and Australian-listed Atlantic Lithium, the Fund is now the third largest shareholder in Atlantic Lithium globally. It is working on finalising a 6% stake in the company’s Ghana tenements, including the Ewoyaa project mine, which increases Ghana’s stake in Ewoyaa to 19% on the back of a negotiated 13% free carry for the Government of Ghana at US$27.9 Million.
MIIF has also invested GHC 300 million in developing the Ada Songhor Salt project under Electrochem Ghana. Industrial salt is one mineral that, if well developed across its value chain, could generate at least US$1 billion in direct revenue every year.
“The Ada acreage of 41,000 acres is the largest in sub-Saharan Africa, and the investment will push it to become the biggest producing facility in Africa. The Walvis Bay in Namibia, which is the largest in sub-Saharan Africa at 16,700 acres, produces circa 950,000 tons per annum, with Ada having the potential to produce 2,000,000 tons per annum,” says the chief investment officer, Bubune Sorkpor.
MIIF is currently reviewing investment opportunities in three large-scale gold mining companies in Ghana. One is an exploratory, commercially proven graphite mine in northern Ghana, in line with Ghana’s critical minerals policy and lithium processing, possibly with international co-investors.
Leveraging the Capital Markets
In 2023, MIIF executed an MOU with the Ghana Stock Exchange (GSE). The MoU was signed to establish a practical framework for creating an alternative asset class and promoting the trade in minerals securities on any of the GSE’s markets.
In line with this MOU, MIIF shall endeavour to have all investments listed on the GSE. In this vein, Electrochem shall be listed on the GSE by the end of 2025, and Atlantic Lithium and Asante Gold have been listed, allowing Ghanaians to participate directly in these investments.
Given the opportunity to leverage the GSE, the Fund is developing a gold-backed ETF with the support of the GSE and IC Securities.
This will be the second listed ETF after the ABSA South Africa New Gold ETF, which has been trading on the GSE for at least four years.
The MIIF gold-backed ETF will allow Ghanaians and Pension Funds to invest in actual gold-backed instruments and create an alternative to government-backed securities. Subject to SEC approvals, MIIF intends to have this listed by the end of 2024.
Enterprise Development (The MIIF Small Scale Gold Mining Incubation Program)
The Chief Technical Officer and Head of Operations of the Fund, Mr Kwabena Barning, reiterated the CEO’s position of investment throughout the entire value delivery process by emphasising the need to formalise the small-scale gold mining sector by supporting small-scale gold miners under a program called the MIIF Small-Scale Mining Incubation Program.
The Small-Scale Mining Incubation Programme (SSMIP) is an enterprise development initiative designed to support the growth of the small-scale gold mining sector. The licensed small-scale industry contributes up to 40% of the total gold output of Ghana and employs more than 10% of the working population.
The MIIF Small-Scale Mining Incubation Program will involve equity investment in capital support, mining equipment, gold traceability mechanisms, imbuing beneficiary firms with corporate governance principles, exacting responsible mining methods to forestall environmental degradation, and providing a ready offtake market through the MIIF Gold Trade Desk for licensed miners.
According to Mr Kwabena Barning, “This initiative will be the most revolutionary in artisanal mining in Africa.” Mr Koranteng emphasised that the SSMIP has the potential to triple small-scale output, which is currently around US$2 billion a year.
The objective of the SSMIP is to develop the creation of Ghanaian mid-tier gold mining companies, which would lead to the formalisation of the sector with an attendant impact on eradicating illegal mining.
In addition, this program plans to move beneficiary companies from their artisanal status to high-performing junior mines that can be listed on the Ghana Stock Exchange.
The pilot phase of this project has begun with an initial investment outlay of US$30 million over the next two years. The plan is to cover over 100 companies within the next eight years.
The MIIF Gold Trade Desk
MIIF commenced the operationalisation of its Gold Trade Program in August 2023. The Fund’s strategic goal is to integrate its investments along the whole value chain of commodities invested in.
“MIIF, through its Gold Trade Desk, has injected over US$700 Million into the Ghanaian economy.”
Trade attracted total inflows of US$719 million into the Ghanaian economy between August 2023 and July 2024 through its Gold Trade Desk. Out of these inflows, MIIF traded foreign exchange amounting to US$531 million over the period with Bulk Distribution Companies (BDCs) under the Chamber of Bulk Oil Distributors (CBOD) in support of the Government’s gold for oil program.
MIIF has earned % a gross annualised return of 33% from its trading activities. The MIIF Gold Trade program has provided a stable source of forex to the BDCs for oil purchases and stable fuel prices to Ghanaian consumers, complementing the Bank of Ghana’s forex support for BDCs.
Next Phase of Growth
The MIIF Gold Trade program has established and tested systems for efficient metals trading. MIIF’s robust system includes responsible sourcing of small-scale gold ore, tracking the commodity, logistics, insurance, and validation of the gold ore.
The Fund intends to onboard private banks and institutional investors who can trade Ghana gold for forex through its platform.
“After piloting with one bank, we are ready to roll out a full-scale trading platform with other financial institutions and licensed gold aggregators.” Mr. Koranteng said.
“Our foray into trading metals is to build capacity to engage in financing instruments for the mining sector in Ghana.
We want to be able to build derivatives, futures, and forwards that are underpinned by the physical trade of commodities,” Sorkpor, chief investment officer, said.
