MIIF grows its Assets Under Management from $100m to $300m in 12 months as it positions to be Africa’s leading Minerals Fund.
By eparetodevuser
The Minerals Income Investment Fund (MIIF) has announced an 87.4% growth in its Asset under Management (AUM) from GH¢1.7 billion to GH¢3.2 billion within the last 12 months ending December 2022. MIIF indicated that the remarkable growth was primarily anchored on innovative strategies which led to growth in royalties income, expansion of royalty sources and investment income.
Investing for Growth Investment activities of MIIF effectively commenced in March 2022 with a US$20 million acquisition of a stake in Asante Gold Corporation, a Canadian and German-listed company with assets in Bibiani, Chirano, and Kubi. MIIF subscribed to 14,514,286 ordinary shares, representing 4.62% of the entity at the time. MIIF has also closed a GH¢25 million deal in a Ghana/Africa SME-focused Fund. MIIF is readying investments in lithium and salt of up to US$60 million and a small-scale mining incubation support program of up to US$60 million in 2023. MIIF also plans to develop a gold-backed ETF with the support of the Ghana Stock Exchange (GSE) for trading on the Ghanaian Bourse and possibly the Johannesburg and Toronto Stock Exchanges.
Performance of Investments of the Fund The Fund recorded an annualized end-year return of 6.13% in 2022. The return was also influenced by foreign exchange volatility and good treasury management of funds.
Edward Nana Yaw Koranteng, the Chief Executive Officer of the Fund told the Daily Graphic exclusively, “MIIF mobilized GH¢1.3 billion in 2021 and GH¢1.8 billion in 2022, representing a 36% growth over the previous year. This was a major factor in growing the Fund’s AUM. We have been able to do this because of an inter-agency framework we put in place last year which has seen us collaborating with more agencies. These agencies include the Ghana Standards Authority, the Economic and Organized Crime Office and the Minerals Commission which is the regulator of the minerals sub-sector. We have also adopted innovative technologies such as geo-mapping all mining sites in Ghana and also creating a real-time dashboard for all royalties contribution from every mine in the country,” Mr. Koranteng said.
Mr Koranteng further said that, “The Fund put in measures to expand the royalties stream by adding sand-winning and salt to the list of royalties paying minerals which help with diversifying the royalties base away from gold.”
MIIF outperforms Global Benchmarked Indexes MIIF outperformed global benchmarks with an annualized end-year return of 6.13% in 2022. The year 2022 witnessed significant market losses for equities and Fixed Income investments globally. Equities spent most of the year in a bear market, with the S&P 500, FTSE 100, and GSE-CI recording end-year returns of -19.49%, +0.91%, -12.38%, respectively. This compares to the 6.13% return achieved by MIIF.
The bond market was also hit, especially in developing economies, as the risk of defaults increased. The Russia-Ukraine conflict triggered global inflation and general market uncertainties.
MIIF as a lever for development Mr. Koranteng expressed optimism that MIIF will, in a few years, become the lever that can help Ghana through volatile economic periods and offer the stability that is needed in the economy. “MIIF will seek to diversify its funding and investment portfolio sources, including capital market transactions, a gold trade desk which has already been set up which will definitely be a source of forex for the country, and explore risk participation in high-yielding projects with top-grade financial institutions.” Mr Koranteng emphasized that “We are a young fund, however, we are focused on getting it right. We plan to hit the US$500 million AUM by January 2024 and US$1 billion by 2027. We have made investments in Asante Gold, we are targeting some gold exploratory companies, lithium and salt as well as lithium by-products such as feldspar and silica to kickstart the ceramics and fibreglass industry.”
About MIIF The Minerals Income Investment Fund (MIIF) is Ghana’s minerals sovereign fund. MIIF was established pursuant to the Minerals Income Investment Fund Act, 2018 (Act 978) as amended to receive royalties payments from mineral production activities in Ghana and to manage the government’s equity interest in mining companies.