Bright Simons, Honorary Vice President of IMANI Africa, has claimed that the Royal Ghana Gold Refinery celebrated as a significant milestone in Ghana's efforts to add value to its mineral resources, is a "hoax" designed to revive the controversial Agyapa royalties deal, which was previously shelved due to public outcry.

The refinery, a joint venture between Rosy Royal Minerals of India and the Bank of Ghana—with the latter holding a 20% stake—boasts the capacity to refine 400 kilograms of gold per day. Initially, it will source gold dore from small-scale and artisanal miners, with plans to secure licenses for processing gold from large-scale mining operations in the future.

However, Simons has raised significant concerns, questioning the financial capacity and expertise of Rosy Royal Minerals, the supposed investor partnering with the Bank of Ghana.

Simons revealed that Rosy Royal Minerals, a company that operates small quarries in a few states in India, is financially unstable and not equipped for such an ambitious venture.

He pointed out that the company’s latest financial statements show meagre revenues of just $3,000, alongside losses amounting to $250,000. Given this financial backdrop, Simons questioned how such a company could afford to invest the $20 million claimed to be involved in the refinery.

Moreover, Simons alleged that the Bank of Ghana, rather than the investor, would likely bear the financial burden for the refinery, as Rosy Royal Minerals lacks the necessary capacity.

He also expressed suspicion that the Royal Ghana Gold Refinery could be a front to control Ghana's gold resources through the Bank of Ghana's Domestic Gold Purchase Programme.

According to him, this program might be unfairly channelled through the new refinery, despite the existence of other established facilities in the country, which raises further questions.

Drawing a connection to the Agyapa deal, Simons warned that the government might be using this new venture to indirectly capture a significant portion of Ghana's gold resources.

In an interview on JoyNews, he explained: "Initially, it was supposed to be a PPMC refinery through a public-private partnership. The refinery actually based in Diamond House. What we subsequently learnt is that Bank of Ghana is picking up PPMC's role and they are linking the whole programme to the Gold Purchasing Programme.

Initially, it was all about this PR doesn't make sense. There are existing refineries. Why are you step-siding all of those refineries to go for this new one?

That made me pause and think. If you have all these refineries in Ghana, why select this specific new one which is not even the biggest or sophisticated one in Ghana? That got us digging. We learnt that the Bank of Ghana is going to shift the Gold Purchasing Programme to this…that is a huge advantage to be given to a brand new refinery with no track record when there are others who have been trying to make this work in this country for a while.

We then realised that the company that it says is coming to partner with the Bank for Ghana to do this refinery work does not have the capacity at all. They run some quarries in a few states in India. It is a pretty small country. We also find out that they actually don't have any personnel at the Royal Ghana Gold refinery.

Who has that? It turns out it is a small consultancy…in India based in New York called Rare Tech. This is basically a one-man shop, owned by Sandeep Chadha. Sandeep Chadha is the technical person actually doing it but he has nothing to do with the company said to be handling this since we are partnering with the government.

That raises a lot of fascinating issues. Some independent consultant running this. As you know, PPMC is chaired by the Eastern Region Chairman of the ruling party and he chairs this new venture. So we said let's find out more about Rosy. So we commissioned an inquiry by IMANI and we got huge amount of information.

Apart from what is publicly known which is, it is a quarry and not even a gold mining company or even talk of a gold refinery. It is also a company struggling financially and given that all our refineries are struggling. The smaller ones are doing well and the bigger ones are struggling.

Its last audited financial statement The company made 3,000 dollars in revenue and made 250,000 dollars in losses. How would such a company want to invest 20 million dollars? We examined the company's book in grid details. The company has never made any investment overseas, worth any amount to be interesting. And because as you know, you cannot lie to your auditors if you are investing money overseas, either in a joint venture or subsidiary, you have to tell your auditors.

We searched all the audited books for the last 6 years in which this refinery has been under reconstruction.This refinery started reconstruction in 2018. So during that period if this company had made any investment in this local refinery, it would be in its books. It is not. We are confident to say Rosy Royal is not the investor.

In what way does it get the 80 per cent? We did a forensic audit, commissioned by the government to explain two things. One is how did Rosy Royal come to own 80 per cent and number 2, to audit the actual investment. We have inside reports saying the 20 million or 25 million dollars is not true. So that means that far less has been invested in this upfront refinery.

This is beginning to look a bit scandal now. It looks like somebody had an intention to position this refinery as grand so they can put the Ghana Gold programme under it and use this as a mechanism to control the Purchasing Programme.

If all of a sudden, every Gold miner has to now sell, I mean the small scale refinery as the beginning and the large-scale refineries are being asked to sell 20 per cent to the Bank of Ghana. If all of it is to go to this refinery and they take delivery of it, that is capturing Ghana's Gold.

So the first question to ask is why not the other refineries? Then you begin to fear this refinery could be the front through which somebody captures mandatory of a portion of Ghana's Gold when we have been fighting a battle against Agyapa for several years now. It looks like this is a back door to create another Agyapa."

According to him, since the company does not have the financial capacity, the onus will lie on the Bank of Ghana to engage in the necessary investment for the mining and refining of the Gold.

Asap Vasa, Sahara Royal Gold Refinery, and Gold Coast Refinery are the known gold refineries existent in the country.

During the commissioning ceremony of the Royal Ghana Gold Refinery, Vice President Bawumia emphasized the potential of the refinery to boost local job creation, retain more economic value within Ghana, and strengthen the national currency.

He also highlighted the Bank of Ghana’s Domestic Gold Purchase Programme (DGPP), launched in 2021, as part of the government’s broader strategy to position Ghana as Africa’s gold hub.

In June 2022, the Deputy Minister for Lands and Natural Resources, responsible for Mines, George Mireku Duker disclosed that Ghana’s newly constructed Gold Refinery, Royal Gold Ghana is set and ready to be commissioned by August 2022 by the President of the Republic, Nana Addo Dankwa Akufo-Addo.

The Deputy Minister made this known when he paid a working visit on behalf of the Sector Minister, Hon. Samuel A. Jinapor to inspect the Refinery at the Precious Minerals Marketing Company (PMMC) premises in Accra, on Tuesday, 28th June, 2022.

The reason for the two-year delay is yet to be made public.

The Agyapa royalties deal

The government deemed this as an “innovative financing solution” to help ease the country’s debt crisis, but it valued the gold rights at far less than they could be worth. The opposition party and civil society groups criticised the deal.

In November 2020, the special prosecutor publicly released a report outlining suspected incidences of rigging and corruption, including opening doors for illicit financial flows and money laundering. Furthermore, the report found that millions of dollars were already paid out to companies without legally required approvals.

Later that month, in response to the special prosecutor’s report, Ghana’s President Nana Akufo-Addo instructed authorities to review the transaction documents and return the proposal back to the parliament for approval. After this, the Agyapa deal stalled as the public turned against the deal in the lead-up to the December 2020 general elections, and the incumbent government then lost their majority. The current government alluded to a reconsideration of the Agyapa deal in its 2022 budget presentation to the parliament. Without any public consultation to date, it’s not clear if concerns will be addressed in the next iteration of the deal.

In December 2020, the Ghana Integrity Initiative, the Ghana Anti-Corruption Coalition and Transparency International brought the case before the ECOWAS Court of Justice, arguing that the deal is in violation of Article 21 of the African Charter on Human and Peoples’ Rights, which states that all peoples are entitled to determine how their wealth and natural resources are disposed. Co-applicants also argued that the process disregarded the rights of the people of Ghana to consult and have their concerns addressed prior to execution.

President Akufo-Addo ordered the suspension of the Agyapa deal following a public outcry in 2021.

After more than a year since first hearing the case brought by the Ghana Integrity Initiative, the Ghana Anti-Corruption Coalition and Transparency International, the judges in 2023 ruled in favour of the government of Ghana.

Despite the ECOWAS court's ruling, the deal remains suspended.

In February 2024, it emerged that the government spent $12 million on the suspended Agyapa royalties deal. The CEO of the Minerals Income Investment Fund, Edward Nana Yaw Koranteng, disclosed this at a Public Accounts Committee (PAC) Sitting.

The CEO of the Minerals Income Investment Fund said the money was expended on the processes to issue the initial public offering on the London Stock Exchange before the suspension.

Earlier on, Bright Simons raised critical concerns about the recently commissioned Royal Ghana Gold Refinery in Accra, arguing that refining gold into 24-carat bars does not constitute true value addition, contrary to claims by Vice President Dr. Mahamudu Bawumia.

Mr Simons asserts that the real value addition in the gold industry lies in creating finished products like jewelry, rather than simply refining raw gold into bullion.

In a post on X, Simons expressed skepticism about the promises made by the government regarding the economic benefits of the new refinery.

"I was surprised to read in the international press news that Ghana was launching its 'first commercial gold refinery.' I was even more surprised to hear the Vice President argue that this new refinery will enable 'value addition,' which in turn will lead to hundreds of jobs, and the strengthening of the Cedi," Simons wrote.

Reuters reported that Ghana has launched its first commercial gold refinery in Accra, marking a significant step in the country’s effort to add value to its gold production and increase national revenue.

Simons pointed out that this is not the first time such promises have been made. He recalled similar claims made when other gold refineries were launched in Ghana, including Asap Vasa in 2013, Sahara Royal Gold Refinery in 2015, and Gold Coast Refinery in 2016. Despite these earlier initiatives, the country continues to grapple with the same challenges in achieving real value addition in the gold sector.

He emphasized that gold refining, as it is currently practiced in Ghana, is a low-margin and high-volume business, which is inherently unprofitable when confined to converting mined gold into bullion.

Citing the example of one of the world’s largest refineries in Perth, Australia, Mr Simons noted that such operations make a margin of just 0.17%. In Ghana, where the cost of capital is high, even achieving a 10% operating profit margin is difficult.

Moreover, he highlighted the structural challenges facing Ghana’s gold refining industry, such as the long-standing relationships between large-scale miners and international refineries, which make it difficult for local refineries to secure significant volumes of raw gold. As a result, these refineries often rely on small-scale miners, leading to lower-quality dore (raw) gold that requires additional processing.

He also warned about the environmental and financial pitfalls associated with refining operations in Ghana. Citing the example of Sahara Royal Gold Refinery, Mr Simons mentioned the environmental disputes it faced with nearby residents and the financial difficulties it encountered, which led to the issuance of dud cheques.

Another significant hurdle for Ghana’s refineries is the lack of certification from bodies like the London Bullion Market Association (LBMA). Without such certification, the refined gold must be sold at a discount to less rigorous buyers, further squeezing profit margins. Simons explained that achieving and maintaining LBMA certification is a costly and time-consuming process, with insurance and security costs further eroding profitability.