Ghana could generate US$4.8 billion from lithium mining

With further exploration ongoing, lithium deposits have been discovered in the Central, Western and Volta regions thus far. Lithium is a rare earth mineral that has gained prominence in recent times owing to the critical role it plays in the growing electric vehicle (EV) revolution which relies on lithium-ion (Li-ion) batteries. Lithium is also widely used in the production of several electronic devices such as smartphones and computers. Hence, Li-ion batteries will be more in demand as mobile electronic devices such as smartphones, tablets, laptops and other wearable devices proliferate with growing access to the Internet.

For a country with a long history of natural resource extraction dating back to pre-colonial times, (gold, bauxite, manganese, diamonds etc) the discovery of lithium came as a welcome surprise. Ghana’s proven 180,000 tonnes of lithium reserves rank the country fourth place on the African continent behind DR Congo (3,000,000 tons), Mali (840,000 tons) and Zimbabwe (690,000 tons).

Australia is currently the premier producer of lithium worldwide while Bolivia has the largest proven reserves of 21 million metric tonnes. It is projected that Ghana will generate about $4.8 billion over the life of the mine based on a five per cent carried interest in the project.

The carried interest of five per cent is similar to Government’s interest in other decades-old mineral mining agreement which have failed to yield notable benefits to the state or surrounding communities thus far. An exploration license for the project, which gives the mining company access to 139.23 square km of the lithium-rich site.

The targeted first production of the concentrate in the third quarter of 2024, subject to receipt of a mining license in the third quarter of 2023 and the project meeting all other statutory requirements.The project comprises deposits in Ewoyaa, Abonko and Kaampakrom approximately 100km south-west of Ghana’s capital Accra.

The project was initially estimated to hold 18.9 million tonnes of probable petalite and spodumene ore grading of 1.24 per cent lithium oxide (Li2O) containing 109 kilo tonnes of lithium (109,000 tonnes) metal as of March 2022. The mineral resource estimate for the project, however, suggests the lithium deposit in the area is up to 30.1million tonnes grading at 0.26 per cent lithium oxide. Two million tons are expected to be mined annually, which implies that Ghana’s lithium deposit would be completely exhausted in about twelve years if more discoveries are not made. Countries around the world are adopting the G7 goal of cutting greenhouse gases by 40 per cent to 70 per cent by 2050 from 2010 levels and phasing out the use of fossil fuels by the end of the century.

To achieve this, a two-pronged approach consisting of progressive legislation on one hand and incentivization of electric automobile manufacturers via subsidies on the other hand has been implemented. Significant subsidies for electric vehicles have resulted in the success of EV manufacturers Tesla and more recently China’s B.The exponential growth in the rapid rate of adoption of viable electric substitutes for petrol-fueled cars such that tech giants Apple and Google are preparing to enter the fray with smart electric vehicles.30 countries committed to stop the sale of new petroleum and diesel car models by 2040 at the COP26 conference in 2021.China, which is the largest vehicle consumer market, has launched an aggressive policy to reach a target of 75 per cent of all new car sales being electric by 2030.With sweeping policy changes such as these, the energy transition case which shows more than 60 per cent of global energy consumed being from renewable sources by 2050 is more likely to unfold.

According to the demand for lithium could grow to more than 40 times current levels if the world is to meet its Paris Agreement goals. By 2040, Mackenzie estimates that the world will need 800,000 tons of lithium per annum for car battery production alone. The strategic importance of lithium can therefore reasonably be expected to grow in lockstep with prices due to demand outstripping supply as the global electric vehicle market explodes. The lithium producing countries and lithium-ion battery manufacturers are set to earn billions from lithium mines and battery factories for the next two decades at least, all other things being equal. It is against this backdrop that Ghana’s strategic positioning as regards the exploitation of its lithium deposits deserves scrutiny.

The International Energy Agency’s Global EV Outlook published last year, sales of EVs doubled to 6.6m units in 2021 from the previous year.

The total number of electric cars on the roads globally reached 16.5m, tripling from the quantity estimated in 2018. In the first quarter of 2022, 2 million EVs were sold, up 75 per cent year-over-year (YOY).The worldwide lithium production in 2022 increased by 21 per cent to approximately 130,000 tons from 100,000 tons in 2021 in response to strong demand from the lithium-ion battery market and increased prices of lithium. Global consumption of lithium in 2022 was estimated to be 134,000 tons, a 41 per cent increase from 95,000 tons in 2021.The IEA estimated global lithium carbonate (LCE) output to increase slightly above demand to 650,000 tonnes for 2022 and 1.47 million tonnes for 2027.

Wood Mackenzie forecasts that global cumulative lithium-ion battery capacity could rise over five-fold from 2021 figures to 5,500 gigawatt-hour (GWh) by 2030 in response to massive EV expansion plans. Mackenzie also estimates that EVs will be responsible for over 80.0 per cent of global lithium demand by 2030 as they replace the estimated 1.45 billion petrol cars worldwide.

The price of lithium has grown exponentially since the introduction of lithium-ion electric vehicle batteries in 2017 rising from US$ 9,100 to US$ 19,000 per ton in January 2023.Other uses of lithium include pharmaceutical use, production of alloys, fuel, desiccant, glass, ceramics and automotive parts to name a few.

In 2012, the automotive sector accounted for 14 per cent of the Li-ion battery market. By the end of 2016, this had grown to as much as 25 per cent and presently exceeds 50 per cent. In terms of legislation, landmark policy decisions around the world include the EU’s recent complete ban on diesel and petrol cars by 2040 and the commitment of major automobile manufacturers such as Toyota to produce hybrid and fully electric vehicles only by 2030.The rapid adoption of electric cars in developed economies has informed the policy shift in Western countries and China to gradually phase out fossil fuel-powered vehicles.

It is projected that Ghana will generate about $4.8 billion over the life of the mine (LOM) based on a five per cent carried interest in the Project. The carried interest of five per cent is similar to Government’s interest in other decades-old mineral mining agreements which have failed to yield notable benefits to the State or surrounding communities thus far. According to the US Geological Survey, at the current rate of global production, proven reserves may be exhausted in about 135 years if demand remains the same. In the more likely scenario of accelerating demand, proven reserves would be exhausted in less than 50 years. The lithium value chain consists of mining companies, refineries and downstream electronics manufacturers.

A considerable amount of value is added at the processing and manufacturing stages where lithium carbonate, lithium hydroxide and other lithium compounds are derived for end stage manufacturers who primarily make lithium-ion batteries as well as other products like pharmaceuticals. Some lithium rich countries such as China and the US have opted to participate in the value chain mainly at the refinery and manufacturer level thereby maximizing value from domestic lithium extraction.The alternative is to take the path of least resistance as Ghana and some African countries such as Congo are doing by carrying on business-as-usual with mining and exporting spodumene/petaliteore. The lithium- containing petalite and spodumene ore will be mined and exported, a continuation of a model that has denied the country value from its precious minerals such as gold, diamond and bauxite. The government’s policy orientation towards resource extraction without value addition has made Ghana a net loser in the extractive industry.

The laws governing the extractive industry grant the government of Ghana a maximum 10 per cent carried interest in the rights and obligations of mineral operations at no cost. The government is free to participate further in any mineral operation subject to agreement with the mining company (rights holder). Moreover, the Ministry of Lands and Natural Resources may require mining companies to issue special shares to the Republic for no consideration. The rights accompanying the special shares shall be agreed upon between the mining company and the Ministry of Lands and Natural Resources. It is therefore puzzling why government has not made moves to increase its stake beyond the initial allotment in any of the extractive industries to date.

GNPC’s recent move to acquire the oilfield is commendable, however, increasing the state’s stakes in the gold mining and emerging lithium industry may prove to be equally profitable ventures requiring less upfront financial investment. Lack of transparency on some critical aspects of Lithium’s mining concession (i.e. legal ownership of the lithium deposits, identity and shareholding of the indigenous Joint Venture partners, the 10-year tax break period granted given the expected Life of Mine (LOM) being ~12.5 years, local content stipulations for skill transfer and capacity building (if any). Failure to develop a comprehensive, modern framework to guide the nascent industry to maximize long-term value for the country. Failure to position the country as a viable location for manufacturing of downstream lithium compounds and or lithium-ion batteries countries such as Nigeria, Mexico and Bolivia have applied novel approaches to lithium extraction for strategic reasons.

The Nigeria recently rejected a bid by electric car company to mine raw lithium in the country because it did not want foreign companies to mine natural resources without value addition via processing. In a similar vein, Mexico has recently declared its lithium deposits as a strategic national resource and therefore prohibited private investment in the extraction of lithium. The government of Mexico cited the growing importance of the rare element vis-à-vis exploding demand as lithium is poised to be the “new oil” of the energy transition in coming decades. If we must limit the role Ghana will play in the emerging green economy to lithium ore extraction and export, it is imperative that we maximize returns to the State by negotiating more significant carried and participating interest.

The example of Bolivia which successfully negotiated royalties of about 11 per cent in addition to a majority (51 per cent) stake in its lithium mines (49 per cent belongs to the concessionaire/operator) in 2019 is worth investigating.

After 133 years of gold exports, Ghana has neither a functioning gold refinery nor economic development directly traceable to gold export receipts. Even the major mining communities of Obuasi, Prestea and Tarkwa do not reflect any of the wealth produced from gold mining. If Ghana is going to realise lasting benefit from its extractive sector there is the need to increase the State’s equity in these assets.

GNPC’s planned acquisition of the Pecan Oil Field represents a move in the right direction. However, there are many reasons to take advantage of the novelty of the lithium opportunity to secure a bigger piece of the pie which is bound to grow larger. The government must explore creative financing mechanisms that would enable us to own these assets while attracting technical expertise without sacrificing our interest in these assets for want of expertise. An option is to bring on board regional development banks such as the ECOWAS Bank for Investment and Development (EBID) for financing once the case is made for lithium as a high-potential strategic national asset.

Alternatively, the state can bring on board lithium mining companies as strategic partners to provide the technical expertise either solely as contractor or as minority shareholder. In the spirit of this turnaround in national policy positioning with regard to the extractive sector, the government should take advantage of the nascent state of the lithium mining industry to secure a significant stake (30 per cent min.) in pipeline mining operations. The need to move away from the paltry carried interest approach towards declaring such discoveries as strategic national assets like Mexico has done cannot be overemphasized. The time to strike is now as lithium supply security has become a top priority for technology companies in Asia, Europe and North America. Strategic alliances and joint ventures among technology companies and exploration companies are being established to ensure a reliable, diversified supply of lithium for battery suppliers and vehicle manufacturers. In addition to significant ownership going forward, Government acting through the Trade ministry should approach major manufacturers of a wide range of downstream lithium compounds and lithium-ion batteries in particular to lobby for a plant to be sited in Ghana. The Lithium mined in Ewoyaa would be feedstock for the battery plant. This way, the more valuable Li-ion batteries would be exported instead of ore. Given the unreliability of critical inputs such as power and transportation infrastructure, Government may have to incentivize battery manufacturers with tax holidays, reserved power supply and perhaps concessions on standard local content requirements for a while to sweeten the deal.

The government could also emulate the effort to build refining facilities close to its lithium mines. This will ensure value addition and diversification of Ghana’s role in the global lithium supply chain. The resulting long-term benefits would include GDP growth, employment, skill transfer and capacity building, development of related industries and most importantly evolution of the Ghanaian economy away from mere natural resource extraction. Electric vehicle demand growth could be Ghana’s chance to launch phase 2 of the industrialization drive dubbed “1D1F”.

Ghana would be uniquely positioned to attract EV manufacturers such as Tesla and BYD looking to establish a regional presence as a result of a pre-existing ecosystem and its attendant economies. Significant value addition through the production of the technology and not just the natural resource would signify the maturation of our industrial sector and readiness for industrialization.

Key takeaways:

The Lithium exploration company, estimated that Ghana could generate nearly US$5 billion in revenue from lithium mining.

Lithium is a crucial component of electric vehicle (EV) batteries, and the rise in demand for EVs has also caused an increase in lithium mining. While lithium mining might be a great way for African countries to generate revenue, allowing foreign miners to mine them might be another tale of African exploitation.

Ewoyaa Lithium Project is set to become Ghana’s first lithium-producing mine. The company signed an agreement is a leading lithium developer for EVs in the US.

According to the latest mineral resource estimate for the project, the lithium deposit in the area is up to 30.1 million tons grading at .26% lithium oxide.

Two million tons are expected to be mined annually, which means the lithium deposit should be completely mined after eleven and a half years. It is estimated that Ghana will generate $4.8 billion within this period.

Who owns Ghana’s Lithium deposits?

The Discovered of lithium during a nationwide exploration and added that it would deter illegal mining because the region where the discovery was made could lose its prominence. Production of spodumene concentrate in Q3 2024, subject to receipt of a mining license within Q3 2023 and the project meeting all other statutory requirements.”

Given the state of governance in our country and the long-held conviction that the country has not had enough benefits from mining, it is understandable that there is about a significant transaction such as the grant of a lithium mining lease to a subsidiary of mining company whose significant U.S. shareholder will buy half the product of the mine and send it to its U.S. plant for processing.

This is especially so when the first time potentially affected communities and other significant stakeholders learn about the transaction is in a manner which conveys the impression of a fait accompli. The task, however, is to assess the terms of the transaction in clear-headed fashion and determine whether it should be rejected entirely or improved in any particular. The first area of improvement relates to the provisions for pricing of its main product, namely, the beneficiated lithium ore, spodumene concentrate. It is the sales price of this that essentially determines the company’s gross revenue. It is on that gross revenue that government royalties and the growth and sustainability levy would be calculated.

That would also be the basis for assessing the company’s income tax liability. It is clearly in the interest of Ghana for the company to obtain the highest prices possible for its products. As we understand it, half of the concentrate which will have a lithium oxide content of 6% (so-called SC6) will be sold through an off-take agreement to a US company, which has significant direct and indirect ownership interest in the Ewoyaa project. The other half, having lithium oxide content of 5.5%, will be sold to others. The agreement must require that prices obtained by the company are in line with market prices, and especially in the case of the sale to Piedmont, that prices are at arm’s length. Surely the government must insist on seeing the provisions of the off-take agreements.

The lithium market is very dynamic and in the last few months and weeks has been very volatile. Government could by itself engage a commodities research company to regularly provide it with prices – both open market prices and where possible contract prices between unaffiliated companies – for its guidance.

Another way is for government to have a side agreement with the company which would provide for the engagement of an independent and reputable company to provide, on a regular basis, current data on prices which would be used for the gross revenue determination of the company. The second area in which we would like to see tighter language in the mining lease and associated agreements is that relating to the possibility of establishing a plant to process concentrate from the mine.

The mining lease contains provisions requiring the company to undertake a “scoping study to evaluate the economic benefits of the downstream conversion of the concentrate in Ghana”. It also provides that if the company “is unable to establish a chemical plant, the Company shall make concentrate available to any chemical plant(s) established in Ghana for refining on terms to be agreed.”

This relates to the possibility of establishing a plant to convert concentrate into lithium hydroxide or lithium carbonate. It would do no harm to be more precise about this. it should be made clearer that the obligation is to make the concentrate available to any Ghana plant on terms no less favorable than those on which the mine supplies any other customer, including its shareholder/customer. This would be an important step along the path of achieving value addition in the country.

The agreement must require that prices obtained by the company are in line with market prices, and especially in the case of the sale to Piedmont, that prices are at arm’s length. Surely the government must insist on seeing the provisions of the off-take agreements.

The lithium market is very dynamic and in the last few months and weeks has been very volatile. Government could by itself engage a commodities research company to regularly provide it with prices – both open market prices and where possible contract prices between unaffiliated companies – for its guidance.

Another way is for government to have a side agreement with the company which would provide for the engagement of an independent and reputable company to provide, on a regular basis, current data on prices which would be used for the gross revenue determination of the company.

The second area in which we would like to see tighter language in the mining lease and associated agreements is that relating to the possibility of establishing a plant to process concentrate from the mine.

The mining lease contains provisions requiring the company to undertake a “scoping study to evaluate the economic benefits of the downstream conversion of the concentrate in Ghana”. It also provides that if the company “is unable to establish a chemical plant, the Company shall make concentrate available to any chemical plant(s) established in Ghana for refining on terms to be agreed.”

As we understand it, this relates to the possibility of establishing a plant to convert concentrate into lithium hydroxide or lithium carbonate. It would do no harm to be more precise about this. In any case, it should be made clearer that the obligation is to make the concentrate available to any Ghana plant on terms no less favorable than those on which the mine supplies any other customer, including its shareholder/customer. This would be an important step along the path of achieving value addition in the country.

As indicated above, the main product from the project which will be exported for sale is spodumene concentrate. The grade (quality) of this material is normally measured in the industry in terms of the proportion of lithium oxide it contains (rather than in terms of pure lithium metal).

The Ewoyaa feasibility report indicates that half the spodumene concentrate to be exported will contain 6% lithium oxide i.e., 0.06 tonnes of lithium oxide per tonne of spodumene concentrate. So, for an annual concentrate production of 160,000 tonnes, even if we were to assume that all the production would be SC6, the lithium oxide content would be 0.06 × 160,000 tonnes, i.e., 9,600 tonnes per year.

Now a way of pricing lithium compounds is by reference to lithium carbonate price. So, the particular lithium compound in question is converted to its lithium carbonate equivalent (“LCE”) in weight and priced accordingly. For lithium oxide, the conversion factor is 2.473, meaning, 1 tonne of lithium oxide is equivalent to 2.473 tonnes of lithium carbonate, for the purposes of pricing. So, the 160,000 of spodumene concentrate with a grade of 6% lithium oxide (9,600 tonnes) will be equivalent to 9600 × 2.473 = 23,712 tonnes per annum of lithium carbonate.

Now a way of pricing lithium compounds is by reference to lithium carbonate price. So, the particular lithium compound in question is converted to its lithium carbonate equivalent (“LCE”) in weight and priced accordingly.

For lithium oxide, the conversion factor is 2.473, meaning, 1 tonne of lithium oxide is equivalent to 2.473 tonnes of lithium carbonate, for the purposes of pricing. the 160,000 of spodumene concentrate with a grade of 6% lithium oxide (9,600 tonnes) will be equivalent to 9600 × 2.473 = 23,712 tonnes per annum of lithium carbonate. If the price of lithium carbonate is indeed US$29,000 per tonne, then the gross revenue per year will be US$29,000 × 23,712, or US$688 million.

We can illustrate this with a simplified hypothetical example. Take a company with an annual gross revenue of GHC100, and an operating cost and other allowable deductions amounting to GHC30, resulting in a taxable income of GHC70 and an income tax of GHC24.5 leaving a profit of GHC45.5. Assume that the whole profit is paid out in dividends to shareholders, viz, government and the investors. Dividend payments would be 13% of GHC45.5 or GHC6 to government and GHC39.5 to the investors. Therefore, the annual total amount of money from the project to government would be:

1) Royalty plus levy equal to 11% of GHC100 or GHC11

2) Income tax of GHC24.5

3) Dividend of GHC6.

These add up to GHC41.5 for government vs. GHC39.5 for the investors. The two amounts together totaling GHC81 can be taken as proxy for the annual direct monetary benefit derived from the project for the government and the investors. And in this model, simplified for illustrative purposes, government takes 51% of the available direct project monetary benefit and the investors 49%. reference to gold mining projects where it seems to think that the division of benefits is 5% to government and 95% to investors. There, with a regime of 5% royalty, 35% income tax rate and 10% government free-carried interest, using a similar simplified model of GHC100 annual gross revenue and an operating plus other tax-deductible amount of GHC30, the direct monetary benefit sharing proportions turn out 45% for government and 55% for investors. As for the argument relating to “joint ventures” and “service contracts”, making express the implication that they are inherently better than leases make the error clear.

The proposition does not even attempt to engage in a meaningful comparison of financial terms. If, for instance, under the terms of a service contract government pays the contractor 60% of mining revenues and retains 40%, that would be less beneficial than in a “concession” contract in which the direct monetary benefits are 50:50. And vice versa.

Besides, the terms “joint venture” and “service contract” are so broad as to cover such a multiplicity of mechanisms that it makes the proposition too vague to be meaningful. In a sense, any legal entity with more than one shareholder can be called a joint venture between the shareholders.

Presumably, the fact of some government shareholding in the project vehicle is not, in this instance, sufficient to characterize it as a joint venture in the minds of the authors. Would majority shareholding be required? Or is shareholding irrelevant or merely insufficient? If insufficient, what else is required? The proposition that the government should risk money in mine development and engage contractors who have no legal rights in what is mined?

Or does the term encompass risk service contracts in which the “contractor” takes the risk of exploration and development and is compensated only if the project is successful and then, in many instances by an allocation of product?

There is one other set of matters we think is worthy of consideration but in relation to which we would like to modify its recommendation. That has to do with the issue of developing policy for lithium mining and value addition as well as improving the level of information on available resources.

Indeed, we think that it is important to pay attention to implementing such a task not only for lithium but for other  minerals.

The example of the feasibility studies done in the 1970s to establish the extent of bauxite reserves available at Kyebi and Nyinahin and the viability of an alumina plant based on those reserves could provide some guidance on the approach to be taken.

This would not only improve the country’s bargaining position in negotiations with mining companies; it would also make it clearer on which elements of the value chain policy should be seeking to focus and over what time frames. However, it is premature to be contemplating the establishment of a Ghana Lithium Company.

The risk of creating a new entity (with its own board of directors, chief executive and secretariat), with its avenue for wasteful, unproductive expenditure, leads us to suggest that the requisite feasibility studies should be carried out under the auspices of existing institutions.

The Minerals Commission and the Ghana Geological Survey Authority are obvious possibilities. Perhaps the Minerals Income Investment Fund (MIIF) can collaborate and pay for such studies. Our curiosity about the quality of investment decisions being made at the go beyond the scope of this statement. We simply note our interest in that issue for now. Mining is a key component both of Ghana’s national economy and the global extraction industry. The country overtook South Africa as the continent’s largest gold producer in 2018 and has held the title since. The Covid-19 pandemic highlighted the mineral’s prominent role, as gold is seen as a safe investment during uncertain times. Although hampered by the pandemic’s impact on daily mining operations, demand for the resource helped ameliorate the declines in oil and gas prices during the initial part of the health emergency, helping the government finance its response.

The Ministry of Lands and Natural Resources (MLNR) is the chief government policy-making and regulating authority for the sector, with a deputy minister that has sole responsibility for mining. A series of agencies fall under the purview of the MLNR: the Minerals Commission (MC); the Ghana Geological Survey Authority (GGSA); the Precious Minerals Marketing Company (PMMC); the Minerals Development Fund (MDF); the Ghana Integrated Aluminium Development Corporation (GIADEC); and the Ghana Integrated Iron and Steel Development Corporation (GIISDEC).

The MC is responsible for regulation of the sector, including registering operators, advising the MLNR on license issuance and inspecting mining operations. The GGSA advises on, promotes and researches geoscientific issues pertaining to the environment, groundwater, land use and mineral resources. The PMMC is a state-owned enterprise that grades, values, buys and sells precious minerals. The MDF, meanwhile, supports mining communities and local authorities in mining areas with financial resources and programmes.

The Ghana Chamber of Mines (GCM) represents private sector mining companies, including exploration, production, processing and mining support service providers. The largest labour organization is the Ghana Mine Workers Union, which had approximately 13,000 members as of mid-2021.

Sector operators are generally categorized as part of large-scale mining (LSM) or artisanal and small-scale mining (ASM), with ASM firms having concessions no larger than 4000 sq meters.” A 2016 report by the International Institute for Environment and Development found that ASM directly employed about 1m Ghanaians and indirectly supported around 4.5m more.

Some of the smaller-scale activities are done in informal or illegal mines, which have been linked to environmental degradation, deforestation and water contamination. “It will be necessary to educate ASM entities on the importance of environmental protection for the sector to meet its full potential.”

Formalizing these operations has been a pillar of the government’s development policy, and the 2022 national budget contained a recommitment to sustainable community mining, reforestation and land reclamation (see analysis). The spending package also included provisions that reduced the withholding tax on ASM firms’ unprocessed gold, from 3% to 1.5%, to help them manage the effects of the pandemic. Because ASM entities lack their own refineries, they generally sell their output – at times below-market prices in 2020 and 2021 – to licensed gold-buying firms, which sell it to third-party buyers or refineries that are mainly in Asia.

Ghana’s LSM companies are mainly multinationals, which benefit from a clear and long-standing legal framework. There are constitutional guarantees against nationalization and expropriation. LSM firms have the right of resort to international fora in dispute resolution, and there are clear regulations on health, safety and environmental protection.

Provisional figures from the Ghana Statistical Service show that mining and quarrying – excluding oil and gas – accounted for GHS11bn ($1.9bn) of GDP in 2020, or around 7% of the total. This was down from GHS13.3bn ($2.3bn) in 2019, reflective of the pandemic’s impact on production. Health protocols such as social distancing severely impeded production, as did periodic lockdowns to combat outbreaks among workers. Fiscal receipts from mining rose by 4% in 2020 to GHS4.2bn ($718.2m). The budget projected the sector would contribute GHS11.1bn ($1.9bn) to GDP in 2022.

The mining of gold in Ghana dates back at least to the 15th century, reflected in early European descriptions of the region as the Gold Coast. Gold has long been the most lucrative mining subsector, and in recent years Ghana became Africa’s leading gold producer, with around 5m oz of output in 2020. Underscoring the mineral’s importance to the economy, in 2020 gold accounted for GHS7.8bn ($1.3bn) of GDP, or 71% of mining’s contribution. The segment is a key export, accounting for $6.8bn of Ghana’s $14.6bn in merchandise exports that year. Indeed, in 2020 gold accounted for 97% of total minerals exports by value. Exports maintained pace in the first quarter of 2021, with Ghana exporting $1.4bn of gold.