IMANI Africa, a policy and education think tank, has raised significant concerns about the newly inaugurated Royal Ghana Gold Refinery, which was celebrated as a transformative development for Ghana’s mining sector.
Vice President Dr. Mahamudu Bawumia officially opened the refinery in Accra on August 8, 2024.
During the ceremony, Dr. Bawumia, who is also the flagbearer of the ruling New Patriotic Party (NPP), described the refinery as a strategic investment vital for adding value to Ghana’s mineral resources.
He emphasized that since 2017, the government of President Nana Addo Dankwa Akufo-Addo has been committed to integrating value addition into the country’s export strategy, and the refinery is a significant step towards achieving this goal.
Originally, this vision was intended to be realized through a joint venture between the Precious Minerals Marketing Company (PMMC) and Rosy Royal Minerals Limited.
PMMC provided land for the refinery, which, despite delays caused by COVID-19, was completed in 2022 after its construction began in 2018.
However, IMANI Africa has challenged several aspects of the refinery’s establishment.
In a post on X on August 13, 2024, IMANI Africa’s Founder and President, Franklin Cudjoe, revealed discrepancies in the refinery’s cost and ownership claims.
According to Cudjoe, the actual cost of the refinery is $7 million, not the $20 million initially claimed.
He also disputed the assertion that this was the first refinery in Ghana, pointing out that Ghana already has nearly a dozen gold refineries, many of which are underutilized due to a weak policy environment for local value addition.
Mr. Cudjoe further criticized the portrayal of Rosy Royal Minerals as the majority owner of the refinery, alleging that the company has no experience in gold refining and is primarily involved in quarrying.
He claimed that Rosy Royal could not have financed the alleged $20 million investment.
Instead, the refinery is supposedly managed by a politician with connections to the ruling party and an independent consultant from New Delhi’s Rare Tech.
IMANI Africa’s investigation revealed that the actual capital of Royal Ghana Gold Limited in Ghana is just over $76,000.
Cudjoe suggested that the true 80% equity holders of the refinery have manoeuvred to secure continuous revenue from Ghana’s gold with minimal upfront investment, potentially relying on the Bank of Ghana to cover their initial expenses through working capital.
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)
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