MIIF to inject $32.9 million into Ghana’s inaugural lithium mine

The Minerals Income Investment Fund (MIIF) has committed a total of $32.9 million in capital investment for Ghana’s inaugural lithium mine development, in two installments.

MIIF unveiled its plan to invest in Atlantic Lithium, a company listed on the London Stock Exchange (LSE) and the Australian Stock Exchange (ASX), during the Africa Down Under Mining Conference in Australia.

The investment is broken down into $27.9 million for 6% stake in the local assets and US$ 5 million in the Holding Company representing a 3% stake of 19,245,574 Atlantic Lithium shares at a strike price of US$0.2598 against which a non-binding Heads of Agreement has been executed.

The announcement comes after nearly 15 months of negotiations, which included the Minerals Commission and other government stakeholders. The news of MIIF’s investment led to a 25% surge in Atlantic’s shares on the London Stock Exchange, as investors perceive it as a risk reduction strategy for the Ghanaian Ewoyaa Lithium Mine.

MIIF’s investment is outside the compulsory Government of Ghana carried interest of at least 10% which will also be managed by MIIF.

The Ewoyaa project alone is valued at $1.4 Billion with a capacity to power 1.4 million Tesla vehicles according to Bloomberg. On the US$27.9m investment in the local asset, MIIF projects an NPV of US$90m for its investment.

It will also earn US$312 million in royalties over the life of mine (This could be higher on the back of Government of Ghana’s proposed increase in royalty rates). MIIF also projects a 600% upside on the listed equity in which it will hold 3%.

Chief Executive Officer for MIIF, Edward Nana Yaw Koranteng, shared during the Africa Down Under Event in Perth, Australia, that “MIIF is a statutory minerals sovereign wealth fund with a focus on supporting the growth of mining in Ghana, but its operations also provide a de-risking option for investors in the mining space.

The investment in Atlantic Lithium under- scores this underlying objective and projects Ghana as an investment destination of choice on the continent.” Yaw Koranteng elaborated further that, critical minerals are now of important security and strategic interests to all countries with Ghana being no exception.

The need for a fine balance between protecting the security and strategic interests of the state and incentivizing investors into the critical minerals space cannot be understated.

This is why this investment by MIIF is a watershed moment not only because it is our first investment in the lithium space but because a commercial arm of an African Government is providing co-investment options on commercial terms”.

Nana Yaw Koranteng further said, “MIIF is positioning itself to invest along the entire value chain with beneficiation as a core objective in line with the Government of Ghana’s proposed critical minerals policy”.

Atlantic’s investments include the construction of a lithium processing plant in the Central region.

Ghana’s automobile development strategy has led to six international automobile companies establishing assembly plants in Ghana with the region as the principal market.

The government of Ghana can leverage this and on the back of the lithium investment make Ghana the EV and batteries hub in Africa, he said.

Atlantic’s recently published Definitive Feasibility Study (DFS) for the Ewoyaa Lithium Project, concluded that Atlantic’s revenues over the 12-year mine life for just Ewoyaa Mine is $ 6.6 billion with a post-tax Net Present Value (NPV) of 1.4 billion dollars using a discounting Factor (DCF) of 8%, and free cash flow over life of mine of

$2.54 billion.

The Projects Internal rate of Return (IRR) which measures the potential profitability of investments is 105% with a payback period of about 19 months”.

Edward Koranteng noted that, with the backing of the Minister of Finance, the Minister of Land and Natural Resources, the CEO of the Minerals Commission, and the Managing Director of the Ghana Stock Exchange, MIIF’s investment has established conditionalities that have received preliminary agreement.

Yaw Koranteng noted that, with the backing of the Minister of Finance, the Minister of Land and Natural Resources, the CEO of the Minerals Commission, and the Managing Director of the Ghana Stock Exchange, MIIF’s investment has established conditionalities that have received preliminary agreement.