The Ministry of Lands and Natural Resources is expected to lay before Parliament the Lithium Mining Lease Agreement for consideration and ratification by the first quarter of 2024, if all things being equal.
The Ministry on 19th of October this year signed a lease agreement with Barari DV Limited, a subsidiary of Atlantic Lithium Limited for the mining of Lithium in Ewoyaa in Mfantsiman Municipality of the Central Region.
The Agreement stipulates that the State will have 19 percent Carried Interest with an option of scaling up to a minimum of 30 percent by the end of the contract. ‘
There is a 13 per cent royalty, 35 percent corporate income tax, 1% of the company’s revenue to be lodged in a Community Development Fund for the development of host communities and a requirement to establish a refinery to process Lithium locally before export.
However, following the signing of the Agreement, some civil society organisations and high profile personalities including the Institute of Economic Affairs and former Chief Justice, Sophia Akuffo have criticised the terms of agreement, saying; “It’s not in the interest of the nation'”.
Speaking at the Minister’s news briefing hosted by the Ministry of Information in Accra on Thursday, to respond to some public concerns on the Lithium Mining Lease, Mr Samuel Abu Jinapor, the Sector Minister, insisted that the Lithium Agreement signed with Barari DV Limited was the best ever in the history of the country’s mineral transactions.
He, however, said his doors are always open to listen to “superior propositions and alternative option from the public”.
Also, the Lease Agreement must go through Parliament for consideration and ratification before the lease can be validated.
“The Mining Lease is subject to ratification by Parliament in accordance with Article 268(1) of the Constitution and section 5(4) of Act 703. Upon execution of this Mining Lease, the Minister shall cause the mining lease to be laid before Parliament for ratification,” Mr Jinapor stated.
Therefore, by the terms of the Lease, ratification by Parliament is a condition precedent, the Minister explained, noting that, an unratified mining lease confers no enforceable rights, and that government has always been mindful of its decision.
On refining the lithium ore locally, the Minister said, either Barari DV Limited could establish a refinery to process it or given to a third party to do so.
He said the Ministry had received multiple offer including a Korean firm expressing interest to refine lithium domestically.
That, he believed, would enable the nation to benefit fully from the entire value chain of lithium exploitation.
Mr Jinapor hinted that the Government was ready to provide more resources to the Ghana Geological Survey Authority to expand its survey and aerial mapping of the country towards finding more lithium deposit.
Mr Edward Nana Yaw Koranteng, the Chief Executive Officer, Minerals Income Investment Fund, said the nation stood the chance of raking in $2.4 billion within the lifespan of Lithium exploitation, with an estimated amount of $360 million per year.
According to the Minerals Commission, Ghana’s lithium deposit is estimated at 15 million tonnes with 27 per cent grade quality.
Mr Martin Kwaku Ayisi, the Chief Executive Officer, Minerals Commission, stated that the government thoroughly examined all the available options before entering the lease agreement.
The $250 million Lithium project covers a period of 15 years and an area of 426 kilometre square and located at the Mfantsiman Municipality of the Central Region.
The project is expected to commence commercial production in 2025.