Ghana is set to become a major player in the global lithium market, as the Minerals Income Investment Fund (MIIF) announced a two-part capital investment of $32.9 million in the country’s first-ever lithium mine.
The MIIF, a statutory minerals sovereign wealth fund, signed a deal with Atlantic Lithium, an Australian company that trades on the London and Australian stock exchanges, to acquire a 9% stake in the Ewoyaa Lithium Project in the Central Region.
The investment consists of $27.9 million for a 6% stake in the local assets and $5 million for a 3% stake in the holding company, representing 19,245,574 Atlantic Lithium shares at a strike price of $0.2598. A non-binding heads of agreement has been executed, and the deal is subject to certain conditions and approvals.
The announcement was made at the Africa Down Under Mining Conference in Australia, where Ghana’s Minister of Lands and Natural Resources, Samuel Abu Jinapor, led a delegation to showcase the country’s mining potential and attract investors.
The Ewoyaa project is expected to commence production in 2025, with a capacity to produce 295,000 tonnes of spodumene concentrate per year over a 12-year mine life. Spodumene is a mineral that contains lithium, a key ingredient for electric vehicle batteries and other renewable energy technologies.
According to Atlantic Lithium’s definitive feasibility study, the project has a post-tax net present value of $1.4 billion and an internal rate of return of 105%, making it one of the most attractive lithium projects in the world. The project also has a low environmental impact, as it does not require any chemicals or water for processing.
The MIIF’s investment is a strategic move to support the growth of Ghana’s mining sector, diversify its mineral portfolio, and position the country as a leading supplier of critical minerals for the global green economy.
Edward Nana Yaw Koranteng, the chief executive officer of MIIF, said the investment demonstrates the fund’s commitment to maximizing the value of Ghana’s mineral wealth in a beneficial, accountable, and sustainable manner.
He also said the investment provides a de-risking option for Atlantic Lithium and other investors in the critical minerals space, as it aligns the interests of the company, the government, and the local communities.
“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,” he said.
He added that MIIF is positioning itself to invest along the entire value chain, with beneficiation as a core objective in line with the government’s proposed critical minerals policy.
As part of the deal, Atlantic Lithium has agreed to construct a lithium processing plant in the Central Region, jointly develop feldspar, a lithium by-product used for ceramics, grant board representation to MIIF, consider MIIF as an offtaker for 40% of the lithium spodumene on commercial terms, and cross-list on the Ghana Stock Exchange.
Neil Herbert, the chairman of Atlantic Lithium, welcomed MIIF’s investment and said it showcases Ghana’s intent to support the critical minerals agenda and become a leading mining investment jurisdiction in Africa.
“We consider Ewoyaa as a Ghanaian project for Ghanaians. Having MIIF as a shareholder not only de-risks the project from a funding perspective but, equally importantly, further aligns the company with the best interests of its Ghanaian stakeholders, who we are proud to represent,” he said.
The Ewoyaa project has already attracted the interest of major electric vehicle manufacturers, such as Tesla, which has signed an offtake agreement with Piedmont Lithium, a partner of Atlantic Lithium, for the supply of spodumene concentrate.
Ghana’s automobile development strategy has also led to six international automobile companies establishing assembly plants in the country, creating an opportunity for Ghana to become the electric vehicle and battery hub in Africa, according to Koranteng.
The MIIF receives royalties from at least ten minerals currently being mined in Ghana, including gold, manganese, limestone, and diamonds. It also has equity stakes in Asante Gold Corporation, a Canadian company with assets in Ghana, and Atlantic Lithium.
The fund’s vision is to secure the future wealth of Ghana by monetizing its mineral income in a manner that will support the country’s development agenda.
Source: GhanaWeb
