By Fred SARPONG
Precious Minerals Marketing Company (PMMC) is seeking private partnership to invest between US$5 million and US$8 million to recapitalise the company.
In an interview with the Managing Director of PMMC, R. D. Damptey, he said his outfit needs to be recapitalised but the government was not ready to do that.
‘So we have been borrowing from the banks and you know what the interest rates are. Therefore we discussed it as an option to go onto the GSE to try and raise more money and also to give Ghanaians the opportunity to own part of PMMC, which deals with precious minerals from Ghana,’ he explained.
He further explained that management took a certain line but after the option had been fully explored, they realised that PMMC Commercial was also to monitor small scale mining companies that have been charged to export gold and diamond on behalf of the company.
He told BusinessWeek that they are also a monitoring body working on behalf of the government and tasked to promote the jewellery industry in Ghana.
‘For this reason, we could not go onto the Ghana Stock Exchange (GSE). So the alternative was to partake in new government initiative, which is Public Private Partnership (PPP) participation,’ said Damptey.
He explained that the management has opted for PPP rather than going on GSE, which is the new initiative, saying this will allow them do what they are already doing on behalf of the government and they can still raise money for the institution, so that they can do better than what they are doing now.
BusinessWeek learnt that a consultant has worked on the PPP partnership proposal on behalf of PMMC and the draft has been sent to the Cabinet, waiting for government approval.
‘I am sure that, before the end of the year we will know government’s intention. To what extent it wants us to go with the PPP. It is important because we are now seeing the realisation of the vision of the company, but not only to export raw materials, but rather add value to it and this means heavy funding. For example, through our own initiative we have set up diamond polishing plant as the first phase. We are embarking on the second phase and we hope to commission it by November, this year, then we can go into bigger stones,’ the MD noted.
He explained that what they are doing now is on small scale and “we will soon go into bigger stone operation.”
‘We do most polishing for some West African countries such as Guinea, Sierra Leone and Liberia which produce bigger stones in Africa,’ said Damptey.
Damptey reiterated that their next stage is to go into refinery on a large scale to refine gold they purchase to make it more meaningful.
He said PMMC is strictly the government decision and they are proposing 50/50 private partnership, but do not know what Cabinet will come out with and how it should be done.
‘We have justified why we want to have that because government is not ready to put in more money. We also have funding problem and because we want to do a lot we will need a heavy capital,’ said the MD.
It was gathered that the PMMC polishing plant cost about US$450,000 and this came from their own coffers and that is the reason why they are doing it in phases.
According to him, they do not have any investor yet, however, they are ready to go into 50/50 partnership for the gold refinery. The government owns 100% shares in the company.
He stressed that the partnership they are seeking is not outright sale of the company, saying if the government want to get more revenue from the company, then it must inject more capital into the company.
‘For example, if we are adding more value to what we are doing, then we can pay more dividends to government,’ he added.
He believes that the private partnership will employ more people to work with the company, indicating they will need between US$5 million and US$8 million capital to strengthen the company.