Ghana’s Lithium lease is a model for African mineral exploitation

Minister for Lands and Natural Resources Samuel Abdulai Jinapor, has extolled the virtues of the transaction between the Government of Ghana and Barari DV Ltd, a subsidiary of Atlantic Lithium Ltd, for the exploitation of lithium at Ewoyaa in the Central Region.
He declared this transaction as one of the most exemplary mineral exploitation agreements, not only in Africa but globally.

This statement came in response to concerns raised by the Minority in Parliament, who had called on the government to submit the mining lease to Parliament for ratification.

The Minority alleged that the company intended to commence operations by the first quarter of 2024, despite the Lease not having been ratified by Parliament.

Mr Jinapor dispelled these concerns, explaining that the signing of the mining lease is merely the initial step towards commencing mining operations.

The subsequent stages include seeking ratification of the mining lease by Parliament, obtaining an environmental permit from the Environmental Protection Agency (EPA), and acquiring an Operating Permit from the Minerals Commission.

He emphasized that the Mining Lease granted to the company explicitly states that it is subject to Parliamentary approval, in accordance with the country’s Constitution and mining laws.

According to the Minister, the Minority’s call for immediate ratification is unnecessary, as the government has consistently been committed to adhering strictly to constitutional and legal requirements.

Mr Jinapor further discussed the favorable terms negotiated in the Lease, which are designed to benefit Ghana.

The Ministry had sought Cabinet’s approval for a new policy regarding the exploitation and management of the country’s green minerals, forming the basis of negotiations with the company.

The Minister highlighted several innovative provisions in the Lease, including doubling royalties from 5% to 10%, an increase in the State’s free carried interest from 10% to 13%, additional Government participation through shares held by the Minerals Income Investment Fund (MIIF), increased Ghanaian participation through listing on the Ghana Stock Exchange, a 1% Growth and Sustainability Levy, a 1% Community Development Fund, and a requirement for the company to build a chemical plant or collaborate with existing ones in Ghana for value addition.

The Lease also mandates strict adherence to local content and local participation laws.

He emphasized that these terms offer significant benefits beyond what the state would have gained if it had followed the terms of the Standard Mining Lease granted to other large-scale mining companies.

 Moreover, these terms surpass those of mining leases granted in other jurisdictions for the exploitation of green minerals.

For instance, countries with extensive lithium deposits like Australia, Mali, the Democratic Republic of Congo, and Zimbabwe typically have royalties rates of no more than 6%, while Ghana secured an enhanced royalties rate of 10%.

Mr Jinapor assured that the Lease would be submitted to Parliament for ratification in accordance with the Constitution.

He welcomed the intense public interest and scrutiny of this transaction, emphasizing that this scrutiny is vital to ensuring that the country’s mineral resources are utilized for the benefit of the Ghanaian people.

The Minister affirmed the Ministry’s commitment to efficiently, effectively, and sustainably exploit and manage the nation’s natural resources, with a focus on transparency, integrity, and good faith, all in the best interest of the Ghanaian people.