IMANI Africa, a policy and education think tank, has expressed serious concerns about the recently launched Royal Ghana Gold Refinery, which was hailed as a groundbreaking development for Ghana’s mining sector.
The refinery was officially opened by Vice President Dr. Mahamudu Bawumia in Accra on August 8, 2024. Dr. Bawumia, who is also the presidential candidate for the ruling New Patriotic Party (NPP), described the refinery as a key investment aimed at enhancing the value of Ghana’s mineral resources. He highlighted that since 2017, the government, under President Nana Addo Dankwa Akufo-Addo, has prioritized value addition as part of the country’s export strategy, and the refinery represents a significant advancement towards this objective.
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Originally, the plan was to implement this vision through a joint venture between the Precious Minerals Marketing Company (PMMC) and Rosy Royal Minerals Limited. PMMC provided the land for the refinery, which faced delays due to COVID-19 but was completed in 2022 after construction began in 2018.
However, IMANI Africa has raised questions about various aspects of the refinery’s establishment. On August 13, 2024, Franklin Cudjoe, the Founder and President of IMANI Africa, took to X to point out discrepancies in the reported cost and ownership of the refinery.
Cudjoe stated that the actual cost of the refinery is $7 million, contrary to the $20 million figure initially reported. He also challenged the claim that this was Ghana’s first gold refinery, noting that the country already has nearly a dozen gold refineries, many of which remain underutilized due to a weak policy framework for local value addition.
Moreover, Cudjoe criticized the depiction of Rosy Royal Minerals as the majority owner of the refinery, alleging that the company lacks experience in gold refining and primarily engages in quarrying. He argued that Rosy Royal could not have funded the supposed $20 million investment.
Instead, he claimed that the refinery is managed by a politician with ties to the ruling party and an independent consultant from New Delhi’s Rare Tech. IMANI Africa’s investigation also revealed that the actual capital of Royal Ghana Gold Limited in Ghana is just over $76,000.
Cudjoe suggested that the real 80% equity holders of the refinery have positioned themselves to secure ongoing revenue from Ghana’s gold with minimal initial investment, possibly relying on the Bank of Ghana to cover their initial costs through working capital.
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Read his full post below:
Is Agyapa Back? IMANI Preliminary Ask
*Update on the Royal Ghana Gold Refinery Saga*
- The current phase of the Royal Ghana Gold Refinery costs less than $7.5 million, according to insider sources. The $20 – $25 million bandied about reflects planned future investments in subsequent phases.
- The intense international PR was to lead everyone in Ghana to believe that the refinery was built by and is majority owned by an obscure Indian company called “Rosy Royal”. It also aimed to erase from the public mind the existence of bigger, more sophisticated, and currently IDLE, gold refineries in the country. Ghana has almost a dozen gold refineries, by the way. Most of them are financially hamstrung due to a weak policy environment for local value addition.
- On the quiet, the Bank of Ghana (the central bank) has been primed to become the equity partner in the new gold refinery and is being asked to invest additional resources for various “enhancements” and trading capital. The Ghanaian state’s equity will thus move from PMMC (the national jeweller) to Bank of Ghana, and the “sleeping partners”, whoever they are, will be able to recoup all their upfront investments (due to the underlying cost inflation). Meaning that the *carried interest* of 20% held by the state is really a “ruse”. In a roundabout way, the Ghanaian state will end up paying for that refinery in full whilst owning just a 20% stake.
- At the same time, the government is working hard to redirect assaying and refining business from existing refineries to the new refinery starting with the Bank of Ghana gold purchasing program. Those who think that policy is merely meant to boost Ghana’s reserves should now revise their notes. Reference is also made to our earlier essay on the Gold for Oil deal and the shadowy middlemen involved.
- And here is the banger: the *real owners* of the 80% equity stake in the refinery cannot be the company the government has announced: “Rosy Royal”. We have examined its books over the last 6 years, and it never made any $20m+ investment to build a refinery anywhere. In fact, it runs a quarry and knows nothing about refining gold. Rosy Royal has no personnel at the refinery, which is actually chaired by a politician best known as an Eastern Regional Chairman of the ruling party and managed by an independent consultant, the founder of New Delhi’s Rare Tech. *Unsurprisingly, the total capital of Royal Ghana Gold Limited in Ghana itself is just a little over $76,000. *
- The “real 80% owners” of the new refinery have put everything skilfully together to secure a permanent stream of cash flows from Ghana’s gold. And they are on course to achieve that with *zero effective upfront investment* (given that the Bank of Ghana will end up covering even their initial investments when it pumps in working capital)
