By Eugene Davis
The government has negotiated a new agreement with Atlantic Lithium, granting them a mining lease for lithium exploitation in Ewoyaa.
As part of this arrangement, a 10% royalty rate will replace the standard 5% on minerals extracted within the country, boosting government revenue.”
It represents the first lease granted for the mining of lithium in the country.
Addressing the press during the signing ceremony in Accra, the Minister of Lands and Natural Resources, Samuel Abu Jinapor said “The lease we are signing today differs from our standard Mining Lease, in that, it incorporates the agreed terms we have concluded with the company, based on the Policy approved by Cabinet;
-an increase in royalties rate from the standard five percent (5%) to ten percent (10%). The company will therefore pay 10% royalties on all minerals mined;
-an increase in the State’s free carried interest from ten percent (10%) to thirteen percent (13%). The government will, therefore, hold 13% shares in the company which it will not pay for; but would be entitled to dividends and other rights. “
It comes on the back of an approval of a green minerals policy by the government in July this year.
Among the approved policies are: enhanced local content and local participation, including listing on the Ghana Stock Exchange; and value addition and beneficiation.
Additional Government participation through the acquisition of shares. Thus, in addition to the 13% shares, the Government, through the Minerals Income Investment Fund (MIIF) will acquire an additional six percent (6%) shares in the mining company, and 3.06% shares in the holding company, which is listed on the Australian and London Stocks Exchange.
This will bring the Government’s interest in the company to nineteen percent (19%) in the local company, and 3.06% in the foreign holding company; additionally, Government and MIIF will have representations on the Board of both the local company and the foreign company to protect Government’s interest;
To ensure that other interested Ghanaians benefit from this mining operation, the company will list on the Ghana Stock Exchange, and their shares will be made available to Ghanaian entities and individuals, including SSNIT, pension funds, and other high-income individuals;
In addition to all taxes, royalties, and levies, including one percent (1%) Growth and Sustainability Levey, the Company will also pay one percent (1%) of its revenue into a Community Development Fund, to be utilized for the development of communities impacted by their operations;
In terms of value addition, the company has committed to complete a feasibility study for the establishment of a chemical plant within four (4) months of the signing of the lease. As I have said repeatedly, our commitment is to ensure that, as much as possible, we add value to these minerals before exporting them.
“We do not intend to export lithium in its raw state; so, we have agreed that if the company is unable to establish a chemical plant in the country, it will provide its mineral mined to any chemical plant established in the country. This will ensure that we do not export lithium in its raw state;”
Further, other provisions in the mining agreement include all by-products from the operation, such as feldspar and kaolin would have to be sold locally to feed the local ceramic and other industries.
To the minister, “All these measures have been put in place to ensure that we derive optimal benefit from these minerals.”
Maintaining the full value chain of lithium is a huge task and very capital-intensive. Currently, only China, has an end-to-end lithium–battery industry, from mining to battery production, but the Lands minister says the country is committed to ensuring that what can be done domestically remains here.