The Minister for Lands and Natural Resources, Hon. Samuel A. Jinapor, has defended the mining lease granted to Barari DV Ltd. for the exploitation of lithium at Ewoyaa in the Mfatseman Municipality of the Central Region as among the best leases for the exploitation of lithium globally.
He said even countries with high grade and huge deposits of lithium have not been able to negotiate enhanced benefits, such as the ten percent (10%) royalties’ rate.
The minister was speaking at a Press Conference at the Ministry of Information, in Accra, yesterday, to response to concerns that have been raised about the mining lease.
It will be recalled that in October this year, Government granted a mining lease to Barari DV Ltd, a subsidiary of Atlantic Lithium Ltd for the exploitation of lithium in Ghana. At a short ceremony to mark the signing of the lease, the Minister described the lease as the best deal for Ghana, insisting that at no point will Ghana export lithium in its raw state.
Days after the signing of the lease, a section of the public, including the Minority in Parliament, raised concerns about the mining lease. On October 27, 2023, the Minister issued a twenty-six-point Press Release explaining the processes leading to the signing of the lease, and giving details about the content of the lease. Despite this Press Release, there have continued to be concerns relating to the lease granted to the company, with the latest coming from the Institute of Economic Affairs (IEA) and a former Chief Justice of the Republic, Her Lady Sophia Akuffo.
Briefing the press, the minister said a lot of commentary on the lease have avoided the content of the Lease itself, the press release from the ministry, as well as the global context of the lithium industry.
Mr. Jinapor explained that the ten percent (10%) royalties rate secured by Ghana is among the highest globally, with countries like Zimbabwe, Australia and Mali with huge deposits and high grade charging an average of five (5%). He said the five percent (5%) is the going rate in the mining industry, and remains the royalties’ rate for all other minerals in the country, but Government decided to treat lithium different, leading to the agreement to charge a ten percent (10%) royalties’ rate.
Mr. Jinapor said other clauses of the lease that make the agreement unique include an increase in Government’s free carried interest to thirteen percent (13%), additional Government participation of six percent (6%) through the Minerals Income Investment Fund (MIIF), and the requirement for the company to list of the Ghana Stock Exchange to increase Ghanaian participation in the company to, at least, thirty percent (30%). He said this, essentially, replicates call for the establishment of a Ghana Lithium Company.
According to the Minister, under the laws of the country, and in accordance with international best practice, once the company had expended its own resources to undertake exploration, they were entitled to the grant of a mining lease, subject to regulatory compliance. He said the tender system for the grant of a mining lease, which some people have called for, applies where the country has undertaken its own exploration and generated geological data. That is why Government had to negotiate for enhanced befits for the country.
The minister also said this is the first mining lease in the country to contain provisions for the establishment of a refinery. He explained that Government had to take this decision because it is committed to ensuring that lithium is not exported in its raw state. Thus, even in the event that the company is unable to establish a refinery, it would be bound to sell its minerals to any local refinery established, and already, several investors have expressed interest in establishing a refinery in the country.
Mr. Jinapor said calls by some commentators for Government to lay the mining lease before Parliament was moot, as the Lease itself expressly states that the agreement was subject to Parliamentary ratification, and Government has consistently repeated its preparedness to submit the lease to Parliament. He assured the public of Government’s continuous commitment to ensuring that the mineral resources of the country are utilised for the benefit of the Ghanaian people, and doing so in the spirit of transparency, integrity and utmost good faith.
Lithium is one the green minerals required for the green energy transition, and has been in high demand in recent years. Ghana have just discovered lithium leading to the grant of the mining lease. The company is, currently, going through the necessary approvals to enable it commence mining.