Ghana’s Minerals Income Investment Fund (MIIF) has become the fourth largest shareholder in Atlantic Lithium Ltd (AIM:ALL, OTCQX:ALLIF, ASX:A11) following the acquisition of 19.25 million shares at US$ 0.298 per share.
The Mineral Sovereign Fund of Ghana has paid up US$5 million for a 3.06% stake in the parent company of Atlantic Lithium, which is on track to develop its first lithium mine, the Ewoyaa Lithium Project in Ghana in early 2025.
Subject to the execution of an already inked binding agreement, MIIF will transact a significant stake in the Ghana-based project by investing a further US$27.9 million in the local project to acquire a 6% portfolio in the operations of the Ewoyaa mine and other tenements referred to as the Cape Coast Portfolio in Ghana.
A release by Atlantic Lithium lauded MIIF for its professionalism, meticulous understanding, and rigour applied to the negotiations and closing of this transaction.
Neil Herbert, Executive Chairman of Atlantic Lithium, noted that the investment from MIIF “recognises the considerable, long-lasting benefits that the company, through lithium production at Ewoyaa and the broader Cape Coast lithium portfolio, can bring to Ghana, while also being indicative of Atlantic Lithium’s significant value upside to existing and prospective investors”.
Neil Herbert added that as the company moves closer to beginning construction at Ewoyaa later this year, it expects to benefit greatly from MIIF’s support. “Notably, this includes MIIF’s contributing interest towards the project’s development expenditure, which further de-risks the success of the project”.
The Fund To Support Investors In The Mining Space In Ghana
Edward Nana Yaw Koranteng, the Chief Executive Officer of MIIF, noted that the fund also seeks to support investors in the mining space in Ghana through co-investments as it “provides a de-risking mechanism” for global investors.
Edward Nana Yaw Koranteng noted that Ewoyaa and the Cape Coast portfolio has “vast prospects with comparatively minimal initial capital requirements” and its proximity to the Takoradi seaport and other infrastructure “improves its profitability profile”.
The Ewoyaa project is world-class, with huge prospects in the other tenements under Atlantic Lithium. The acquisition of a 6% contributing interest in the Company’s Ghanaian subsidiaries will support the funding of ongoing capital and exploration expenditure requirements across Ewoyaa and the broader Atlantic Lithium portfolio.
“This is just our initial investment in Atlantic Lithium and its Ghanaian subsidiaries. We hope to later invest in the value chain and the development of other by-products, such as feldspar, in line with the Government of Ghana’s critical minerals policy.
“Our investment highlights Ghana as arguably the best mining investment destination in Africa which is supported by the options MIIF provides to investors. For us at MIIF, this is the start of a partnership with Atlantic Lithium beyond Ghana. We are confident that this initial investment will enhance and accelerate Ghana’s efforts as an African critical minerals hub and to establish the country’s position in the global EV supply chain.”Edward Nana Yaw Koranteng
An Outlay of MIIF’s Strategic Investment
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.
The Electronic Vehicles (EV) batteries industry is estimated to be about $7 trillion dollars globally. With the energy transition drive to limit the effects of climate change and overreliance on fossil fuels, the industry will quadruple in the next 25 years, according to watchers of the Lithium market space.
According to the CEO of MIIF, MIIF seeks to align its investments with Ghana’s broader EV policy which enjoins the country’s automotive development plan which has seen nine car assembly plants in Ghana and the energy transition plan.
The MIFF CEO noted that the investment in lithium and other planned investments in critical minerals such as graphite in northern Ghana underscores the strategic objective of making Ghana the battery and EV hub of south Saharan Africa.