MIIF, GSE, Mincom on course to deepen local ownership of minerals

The Minerals Income and Investment Fund (MIIF) has reaffirmed its commitment to increasing local participation and ownership in the minerals sector, in collaboration with the Ghana Stock Exchange (GSE) and the Minerals Commission (Mincom).

MIIF’s quarterly outlook in March 2023 highlights that mining companies will be required to list a percentage of their shares on the local bourse as a pre-requisite to obtaining a mining license and consideration for MIIF investment.

The new regulation requires holders of a mineral right to list at least 20 percent of their equity on the Ghana Stock Exchange (GSE) within five years of the commencement of mining operations. This move is aimed at deepening the local capital market.

“MIIF intends to invest in and become an anchor for growth in Ghana’s burgeoning lithium mining and its value chain operations,” the fund said.

Asante Gold, a beneficiary of MIIF investment, has since listed on and raised the market capitalisation of the GSE by GH¢2.8billion (US$192.7million). Atlantic Lithium, which is developing the resource-rich Ewoyaa Project in Mankessim, has been approached by MIIF, with the view of acquiring a stake in the project.

As an investment target for MIIF, Ewoyaa offers comfort and an attractive upside based on the transformational importance of lithium, the geology, the resource of the tenement, and the extractability of the ore. Atlantic, with a current market capitalisation of US$379.45million, will be encouraged to do the same.

“The company [Atlantic Lithium] has started this process which we believe provides a promising equity opportunity for pension funds and capital market players, in line with MIIF’s vision of deepening the Ghana capital market,” part of the quarterly outlook read.

The government has implemented automotive policies to attract investments into the auto sector, in line with plans to build a strong vehicle manufacturing and assembly industry. By leveraging the country’s lithium and resources from other African countries, the government is hoping to attract and retain downstream manufacturing capacity in-country.

For lithium producers looking to advance projects and bring supply on stream, financing and permits remain a big challenge. The US and Canada are both said to be reviewing the permitting process for new mines as they continue to push for a more domestic and regional supply of key raw materials, including lithium.

The demand for lithium is expected to strengthen extensively in the rest of Asia and in Europe and North America as their downstream battery supply chains begin to develop. Electric vehicle sales grew about 36 percent in the year 2022, according to S&P Global Mobility estimates.

With the demand for lithium set to rise as the downstream battery supply chains begin to develop in the rest of Asia and in Europe and North America, MIIF’s investment in Atlantic Lithium’s Ewoyaa Project is expected to have a positive impact on Ghana’s economy.