Home Opinion Featured Articles Ghana’s Deal with Atlantic Lithium, some Matters Arising from the Public debate 

Ghana’s Deal with Atlantic Lithium, some Matters Arising from the Public debate 

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Atlantic Lithium
Atlantic Lithium

Fellow Ghanaians, Ghana has a very reasonable number of the best scholars in various fields on mother Earth, yet the development of this Country is very slow thus suggest serious national problems. Among others, this may be due to lack of very serious research work and technological advancement as result  insufficient cash for such activities and may be the unbridled issue of corruption (deceit etc) in the Country has made it very difficult for effective  economic growth and development.   

 

Compatriots as stated due to financial and other problems including diversions, acts of corruption, lack of common sense in dealing with national issues has made and is making the ineffective economic growth and development of this Country. So, to ask the Country to spend money in conducting exploration of minerals and oil due to occurrences of same in the Country to determine proven commercial quantities for exploitation both of which are capital intensive and highly risky and may end in no discoveries may sound unpalatable/problematic to a nation which always cashstrapped. 

 

Mineral exploration needs high investment, sustained cash flow. It is laborious/ time consuming and represent the highest risks, risk of failure is great and the cost is high, successes is by capital intensive. So, the State normally prefers applies the principle of opportunity cost in spending the scarce resources and leave the gambling or risking activities to the private sector for her nationals solely or with the support of foreign investors or Foreign Direct Investment (which thus give direct control to the buyer over the asset) and whichever situation the Country enjoy royalties, taxes, some developments and employment for her citizens without heavy encumbrances. 

 

A developing State like Ghana should not risk into exploration, due to scarcity of resources,  It must consider the importance of opportunity cost in making a choice of expenditure , so spending in other areas other than exploration which is  capital intensive with requirement of sustained cash flow, and may lead to heavy losses due no or zero  discoveries of commercial quantities and if commercial quantities are found, the State may find it difficult to attract investment from the Capital Market due to Ghana’s issues of policy credibility otherwise due to our corrupt acts the details may be communicated to family and friends or foreign accomplices against the interest of the Nation.

 

We also have serious problems in the management of Firms. Hmm even the Country Ghana is badly managed. Some People saw or see the Country or a firm like their poultry farm.  The sad stories of TOR, former Ghana Telecom, Ghana Airways, Ghana Railways, Forestry Commission Saga under Sir John. Matters of COCOBOD which should be a very sound financial institution but due to issues, it rather depended in the past and will keep on depending on the ritual cyclic cocoa syndicated loan hence the yearly robbing Peter to pay Paul syndrome.  

 

The sad story of the former Savannah Accelerated Development Authority, with the Management insulting our intelligence with the statement that it made success in providing employment for alleged tree planting exercise, the trees which a CEO of the Company allegedly got burnt by bush fire. We see Agribusiness not for wealth creation but for employment. We hope the good idea of 24hour economy is not for a mere a political gimmick for employment but for wealth creation with the associated jobs creation, will therefore be driven by demand and supply, process requirement (value addition requirement like say in a Mining Company which requires three shift systems due to labour laws for the company to complete the process or industry or the state of raw material which may require quick action by value addition to prevent further decay etc, hence more time say 24hours operations.   

 

Can you imagine that Ghana with so many Universities, Research Stations and enjoys the services of the West Africa Rice Institute, the Jospong Group, which is very much interested in helping to ensure food security, wealth and employment creation instead of going straight with scarce resources to invest in massive rice, maize, soybeans production has to contact the University of Cape Coast for research work in order to help boost rice, maize and soybeans production. Google UCC, Asian Consortium Sign MOU to boost rice and legume in Ghana for confirmation. Recently some Indians were in the Nkoranza area and to introduce a very high yielding maize to the people.  

 

Also despite the numerous Research Institutions, Universities with faculty of Engineering, Agriculture etc, it was recently that farmers in Tono Irrigation Project which was constructed in 1974 by General Acheampong were educated in simple water management for irrigation system of farming by some experts. 

 

For the above points suggest Ghana has a long way to go, so asking Ghana to gamble with limited resources in exploration of minerals which is a very laborious and expensive due to occurrences of minerals everywhere in Ghana in order to determine proven commercial quantities may not be a good idea since what is elementary like irrigation water management was a problem, likewise the printing of text books, printing of ballot papers, monitoring and collection and collating election results are a headache to the State. So asking Ghana to undertake a laborious and capital intensive exploration and the exploitation of minerals will be a serious gamble or risk.

 

  The private sector is the main engine of economy growth, this must be promoted. By principle of mutualism, the private sector must also see the need for sponsoring research work. So, the Jospong Group must be commended for sponsoring UCC in researches in Agric items production. 

 

The world is seriously in search for fossil-free vehicle and for supply of clean power through renewal source of energy beside solar, wind and hydroelectric power, the world is exploiting minerals for development of renewal energy for power provision and rechargeable batteries for electric vehicles etc. This has brought the mineral Lithium to the limelight as a source of renewal energy and for rechargeable batteries for electrical vehicles in addition to the current usage in powering phones, laptops etc.  

 

Some school of thought in Ghana are kicking against a planned mining of lithium due an allegation of not happy with the state of deal being drafted by the Executive Arm of Government. Presumably due to a mistaken belief there may be no alternative mineral to Lithium, so the demand for Lithium may in the future hit the roof, thus pushing the price of Lithium astronomically above the current price of about 27000 US Dollars per metric tonne and a fear that Ghana may not gain much from the current deal, which is reportedly by the Sector Minister as the best in the history of Ghana and based on current national laws.

 

This scholar of thought failed to appreciate that nothing ventured nothing gained, so we should be grateful that this deal will give Ghana a better stake in the mining sector and the more Barari DV gains, an increase in the gains of Ghana is expected without cost. So the earlier both parties work hard for the establishment of the Mine to enable both parties make substantial gains from Lithium before commercial production of an improved Sodium-ion Battery (SIB) which has recently attracted great attention of China, Sweden etc due to the abundant Sodium resources, hence low cost. 

 

Furthermore, Sodium is more environmental friendly, not very reactive, not inflammable hence may serve as alternative to Lithium-ion Battery (LIB). So, Researchers globally with the exception of Ghana are working very hard and rapidly to change the narrative. 

 

 Researchers in Chalmers University of Technology in Sweden have shown that Sodium-ion battery has an equivalent climatic impact as their Lithium-ion competitors without the risk of running short supply of Sodium and have found that Sodium batteries (Sodium-ion batteries) will soon be regarded as better alternative to lithiumion batteries in terms of chemical property especially when combined with Oxygen to form oxide, issue of grid storage capabilities and issues of safety (lithium tend to be highly reactive,  inflammable or highly combustible than Sodium in the same family or group as Alkali metal). Also in terms of minerals resources scarcity and equivalent in terms of climatic impact, Sodium has better advantage.

 

 Sodiumion batteries give a more sustainable alternative to Lithium due to massive abundance of salt in sea water thus afford very low-cost alternative for energy storage. Researchers within the University of Maryland’s A James Clark School of Engineering have developed a NASICON based solid-state Sodium battery that outperforms current SodiumBatteries due to ability to use sodium metal as the anode with high density.

 

For the above reason, we need to quickly give unflinching support for the planned mining of the mineral metal of Lithium in Ghana by Atlantic Lithium Ltd, a foreign Company through a subsidiary Company as Barari DV. This as the locally registered special purpose vehicle to undertake the Mining of lithium within the current Constitutional provisions and the legal frameworks of Ghana for the benefit of the Country and the Communities of the catchment area before sodium which is abundant and cheaper to exploit becomes the preferred metal to lithium for renewal energy and for rechargeable batteries for electrical vehicles. 

 

We also should not forget that Africa has abundant sunshine for solar energy as a good source of renewal energy and some countries like Ghana, Burkina Faso, DRC have a lot of Hydrogen or Hydro system in the form of rivers for Hydroelectric power stations. Hence, the other sources of renewal energy suggest that demand for lithium may not hit the roof as perceived due to its inflammable and other risks including corrosiveness when combined with Oxygen.  

 

The issue that Barari DV is going to make more profit due to the state of the deal is totally not true. It must be noted that the Company used current prices or forecasts in the computation for the Capital Market. Price of lithium is not like gold it is volatile and can drop drastically and since the Mine is yet to start construction, acquire assets, meet cost of operation, so the cost may not be the same as the paper work/calculation for presentation to the Capital Market to attract investors.  

 

It is also envisaged that the ownership of the Mine may change before 7years of operation, hence the Company is likely to make money from the Capital Market through Shareholders and not the Mine. For this reason, Ghana should appreciate that it may get the lucrative opportunity to change the narrative in future and bear in mind that gains were/are sometimes made from the activities of the  parent Company and not necessary from mining business.  Some Exploration and Mining Companies raised funds without even mining an ounce of gold etc especially those registered with external Stock Markets. Ghana will also gain in capacity building in lithium operations, making the Ghanaian miner likely global miner or asset for lithium.

 

 It is reiterated that Most Companies make money from investors or shareholders than the Mine. This is so because some of the investors especially holders of Stock Option Shares have an expiring date, grant price, and exercise or strike price, may result in one not making earnings and a likely total loss of investors principals like what happened to some of us with AGC Obuasi Gold Mine before 1993 or so, we bought the Shares at 25 US Dollars and it collapsed as lower as 3 US Dollars per share. 

 

Some of us have our shares locked up with Gold Coast Security or Black shire, we lost our shares of Golden Star Resources Ghana because we did not get the info before GSR was delisted from the Ghana Stock Market.  We also lost our shares of UT Bank etc. 

 

Golden Star Resources Toronto for example as at 31 December 2014 made candid disclosure of gold ore reserves of 1.32million tonnes with grading of 14.82g/tonne in the Prestea Underground Mine to the Stock Market. This was as part of the proven commercial quantity of gold the Company planned for mining as required of the idea of transparency requirement of the Stock Market especially the foreign ones who also depend on the confirmation from reputable financial analysts. 

 

I can say with confidence that not much of this reported or declared gold in the Underground Mine was mined by the Company before it exited from Ghana but we the shareholders or investors at the time of the public offer accepted the story hook, line and Sinker. John Ackah Blay Miezah tricks to investors may be different but the value that investors lost their money made our case the same with that of the investors of Oman Ghana Trust of Miezah who enticed investors with his kweku Ananse story.  

  

Some of the persons who opposed the deal were found to be uninformed of the state of affairs of the massive contribution of the mining sector because they failed to appreciate that the Constitution of Ghana decreed all State revenue must be paid into the consolidated fund for national development. 

A check from the Ghana Chamber of Mines will reveal the yearly massive amounts paid into the fund. A report from the Chamber indicated that over Ghc550 Million was paid in 2016 to the State and only a small amount of Ghc27millon was allocated to the District Assemblies of affected areas by the State and normally the affected District Assemblies do not use it for developmental work.  

 Others based on the vast comparison of Johannesburg with Obuasi concluded that the mining sector has not contributed much to the development of Ghana. Common sense will require that all things remain equal, the comparison should be based on what was the situation in 1886 and in 1895 when Johannesburg and Obuasi came to the limelight as areas endowed with mines in Africa respectively.   

 

A check on the matter will reveal that gold was discovered in 1886 in Johannesburg by a farmer and Johannesburg had over 100,000 residents or indigene in that year who remained and invested their wealth in Johannesburg which together with the social, economic and political history (including the Apartheid system) matters caused the massive development of Johannesburg.    

 

On the other hand, Obuasi was a bushy area in 1895 and the Mine or gold was found in Obuasi in 1895 by immigrants, who sold the Obuasi Mine to a foreigner and took their money 100 percent out of Obuasi to the Central Region. Obuasi Mine was operated mainly by emigrants, most of them did not invest much in Obuasi.  A clear example is the story that Dr Sam Jonah of Obuasi Mine also invested massively in Johannesburg like the indigenes of Johannesburg. Thus it speaks volume that the Socioeconomic and Political history of Johannesburg contributed massive development of Johannesburg. So, Mining Companies cannot be blamed for the vast differences in the development between Johannesburg and Kumasi or Accra.    

 

 It is not true to say that Ghana has not benefited very much from mining. This maybe so in the colonial days but the narratives have changed with time and most recently in the Fourth Republic with the local content and local participation policies made Ghana to gain and will continue to gain massively from the Mining Sector in terms of massive employment, revenue, development, wealth creation example are Mr Ibrahim Mahama, Dr Sam Jonah, Mr Ofori of Rocksure International and others.

 

The detractors need to be educated that Atlantic Lithium Ltd started work in Ghana since 2012 and since then its operation has not breached any Constitutional provision and laws of Ghana. The draft of deal as expected globally is being prepared by the Executive Arm of Government, one of the trilateral Arms of Government, thus independent of Parliament and the Judiciary in decision making as required by the doctrine of separation of powers before submitting the draft to the Legislature Arm of Government for scrutiny to ensure it is within the laws and Constitutional provision

 

The issue of consideration of public sentiments before ratification to allow the actual exploitation or mining of the mineral to take place as required by Section (1) of Article 268 the 1992 Constitution is not in the legal equation. The process which is within the laws of Ghana is in progress for submission to Parliament in the first quarter of 2024.

 

 In this week was a video depicting our much respected Paramount Chief of Dormaa (Dormaahene) appealing for the suspension of the Lithium Deal with Atlantic Lithium for among others, an issue that the agreement was silent on associated minerals which may be mined with the main mineral as Lithium thus according to his understanding, the deal will be granting free extraction of any associated mineral found on the land which according to him may be detrimental to the interest of Ghana.  

Our respected Nana (Paramount Chief) and others are hereby assured that this is not a problem because other minerals other than the main named mineral or all the minerals as per the lease are required by International law or Transparency Integrity policy of the Capital Market, the Off taker agreement with the receiving Refinery or buyer to be accounted for and form part of the sales from which Royalties, tax etc are computed and paid for. 

Furthermore, accounting for the main mineral say gold or Lithium and the associated mined minerals dubbed as byproduct is a local Mandatory requirement by metallurgical security Code. That is a requirement to be monitored and authenticated or covered by signatures of Head of Security, Stationed GRA (Custom) Officer, the Good Room Supervisor and the Process Manager this is after the weighing of each bar, which must be recorded and signed against, then the bullions are boxed, sealed with both the Company’s seal and State seal from GRA with seal numbers, then secured in a very strong safe with double keys system controlled by the Head of Security and Process Plant Manager.

The accurate details as signed against by GRA Officer and two others from the Company are handed over to the GRA Officer for submission to the Finance Manager. The accurate details include the weight of each mineral in each bullion bar, each with its byproduct is provided with bar code number, total weight of the gold and others are done for computation of the sales using the international price in Dollars for the day or date by the Finance Manager.

The mining laws and Mining Regulations (2012) decreed that the minerals must be well accounted for and same report is signed by the Finance Manager, the GRA Officer etc are shipped with the bullion to the Off Taker (the receiving Refinery), Copies to GRA and Bank of Ghana are submitted by the GRA Officer and the Company submits report of same to the Minerals Commission. 

Samples of each bullion with byproduct are normally submitted to a Standard Laboratory for assay to provide the state of affairs for the computation of the sales. Samples of each bar is kept under double locking system with keys controlled by two persons. The Off taker on receipt is required by the agreement to also take samples for assay for reconciliation by parties to the agreement. When satisfied by both parties, then authority is granted to security to escort the samples to the Gold House to be added to the next smelting and the same procedures are executed. 

 Folks I was a former Loss Prevention Officer of a Mining Company which was granted a gold mining lease and this afforded me with wide practical and theoretical experiences in security cover for the Process Plant for smelting/refining of Gold. 

The Metallurgical Security Code deals with everything in the mining Company, starting from mining,  haulage of ore, stockpiling of ore, feeding the of the Crusher for crushing of rocks,  then by conveyor belt for processing via the ball mill. After milling the products goes to tanks for the oxidation or Biooxidation if refractory ore with sulphide in the process Tanks then it goes for gravity separation through gravity shaking table or Knelson Concentrator. After which it travels to the Gold Room for Smelting/Refining. The security codes also deals with handling of the bullion and related bullion samples, gold sales and escort and shipment of the bullion and lastly feedback from the Refinery (Rand Refinery in South Africa).

Almost every mineral metal mined in the World produces more than one metal element product though the lease speaks of a main mineral to be mined say in a gold mine as gold.  So, the other minerals as mined with gold ore are normally or mainly silver and with or without copper are accounted separately to the relevant authorities as part of transparency integrity requirements and are accounted and marketed as byproduct.

 Depending on the mineral rocks involved, some mines produce a single metal almost exclusively but most mines produce a major product and various by product metals. Gold, silver and copper often occur together in the lease of say gold mining lease or silver mining lease or copper mining lease. Gold and   silver always found together in either metal lease. 

Chemistry or Metallurgy tells that Metals occur in minerals and minerals with similar characteristic occur together because they occur in their associated groups as a rule. Gold is common with copper and silver and not with iron. It is hard to get gold from a mine without silver.   

A very interesting example is Grasberg mining Company in Indonesia, It is a Copper Mining Company (that is granted only Copper Lease as the main mineral metal) but the value of the byproduct which is gold is reported worth more than the copper mined by the Company as per the lease granted.  

Grasberg in Indonesia though regarded as a copper mine per the lease is one of the biggest Gold producing mines in the world, but as stated it is not a gold mine but a Copper Mine which as results is required to account the sale of the main product as Copper and the sale of the by products which are gold and silver.  As at end of 31 Dec 2020, Grasberg Indonesia, proven and probable minerals reserves were 33.4 billion pounds or 15.1 million tonnes of copper, 28.3 million ounce of gold and 130.6 million ounces of silver as declared to the State and the Capital Market.

Also Goldcorp Penasquito mine in Mexico is a silver Mining Company but it produces gold, silver etc as by product, so the policy of Transparency integrity requires accounting for each mineral but the sales are declared as sale of the Silver Mine to the Market since cash flow is of essence. 

Another scholar of thought claimed that Ghana has accurate geodata of the minerals in Ghana. I wish to state this may not be true because the Geological Department of Ghana with limited resources only have information of occurrences of a particular mineral or group of minerals since era of Gold Cost Colonial rule due to the work of George Ekem Ferguson a Fanti and others, and these results do not give the proven commercial quantity which is what the Market is interested in and this can be determined by Exploration which is very laborious and capital intensive. 

The exploration is normally done by foreign Exploration Companies as result of the issues of integrity and credibility of the management.  Thus the Exploration Companies leverage their competency in raising capital from the Stock Market and or by a sponsorship by off taker(s).  Due to among others, the issue of credibility makes the situation very difficult for Ghana and or a Ghanaian Company unless fronting for foreigner or foreign Company with international repute.

As earlier on stated, Atlantic Lithium Ltd started work in 2012 with the support of a Ghanaian legal firm, and the operated on the guidance of their lawyers within the laws of Ghana. Negotiation is by global standards and it was based on professional work that gave the negotiable aspects of the draft deal between Company and the State on the public domain.

 Contrary to allegation that the Market always think very much of the repute of the Company, I wish to say that this may not be entirely true because the Market also considers caliber of the Management Team and the Board and not necessary how old a Company is but as stated the caliber of the people who formed or going to manage the Company is of interest to the Market. That was why some of us agitated for the change of the Finance Minister with the perception that the Market would responding favoruable to a new competent face for running the Finance Ministry.    

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