Ghana’s Ministry of Lands and Natural Resources ignited controversy with the recent signing of the inaugural Lithium Lease Agreement (Deal) with Australian mining firm Lithium Atlantic
DETAILS OF GHANA’S LITHIUM DEAL
The agreement, focused on mining lithium at Ewoyaa in the Central Region, involves a substantial $250 million investment by the mining company, with expectations of commencing production in 2025.
During a brief ceremony in Accra, Minister Samuel Abu Jinapor, representing the government, and Neil Herbert, Chairman of Lithium Atlantic, formalized the deal. As outlined in the newly approved policy on mining green minerals in Ghana, the government’s free carried interest in the company has risen from 10 to 13 percent, signifying a significant stake.
The government’s total interest, combining shares in the local and foreign holding company, is set to reach 19 percent and 3.06 percent, respectively. Additionally, royalty to host communities has been elevated from the standard 5 percent to 10 percent. To bolster local employment, the company is mandated to process the mined mineral locally, adding value to it.
Furthermore, Lithium Atlantic is obligated to construct a Chemical Plant at its operational site within four months of signing the lease agreement. Minister Jinapor highlighted that the Akufo-Addo-led Government envisioned a distinctive approach to mining green minerals, aiming to ensure equitable benefits for the nation.
The policy, presented to Parliament on July 13, 2022, and later approved by Cabinet on July 27, 2023, underscores increased royalty rates, Ghanaian participation, local content, and value addition as key facets.
