By: Franklin ASARE-DONKOH
The Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye, is insisting that Ghana’s lithium should remain in the belly of the soil until the best of exploration negotiations are reached.
His caution comes on the back of the assurance by the Lands and Natural Resources Minister that the deal is the best Ghana in its natural resources exploration.
Dr. Kwakye has therefore, cautioned the government to be cautious and ensure that Ghanaians get a good deal in the Lithium lease that it signed.
Addressing a press briefing on Ghana’s First Lithium Contract, Terms, Benefits, and the Way Forward on Thursday, December 7, 2023, the Lands and Natural Resources Minister, Mr. Samuel Abu Jinapor maintained that the Lithium Mining Lease includes provisions for the establishment of a refinery and the provision of the lithium by-products to local industries, hence the decision to process lithium locally was in the best interest of the state.
The Minister listed significant advantages expected from the implementation of the Lithium deal, disclosing that the execution of the contract will give Ghana 10 percent in the form of royalties which will be one of the highest in the country’s mineral exploration history.
He added that the government has also secured 19 percent state participation in Barari DV Limited, which is projected to scale up to 30 percent by the end of the contract.
“We have already secured 19 percent state participation in this mining company with the requirement to scale it up to a minimum of Ghanaian participation through listing on the Ghana Stock Exchange for shares to be made available to Ghanaians and Ghanaian entities.”
Mr Abu Jinapor affirmed that the lithium contract is in the ultimate interest of all Ghanaians.
The Minister said that the government had infused in the lithium agreement with Barari DV Ghana Limited a clause that ensures the retention of a significant part of the mining value chain locally.
However, the Director of Research at the IEA reiterated that until the country gets a good deal, the mineral resource should not be mined.
“Why is the Minister and his bosses rushing with the lithium lease? We want enough time to get the best lease for Ghana. Until then, the lithium can stay underground and the Minister can exit office,” he wrote on his X platform while reacting to a comment by the Minister of Lands and Natural Resources Samuel Abu Jinapor who assured Ghanaians that the government would not allow the export of lithium in its raw state.
Meanwhile, the Chief Executive Officer for Minerals Commission, Mr. Martin Ayisi, pointed out that the critical statements made by some individuals on the deal stems from a lack of thorough reading of the agreement, noting that many of the concerns raised are based on inaccurate assumptions and unsupported assertions.
Mr. Ayisi explained that the $250 million project, located in Ewoyaa, Mfantseman Municipality in the Central Region, is set to commence production by 2025.
The deal includes a 10 percent royalty and 13 percent free carried interest by the state, surpassing the existing 5 percent and 10 percent, respectively, for other mining agreements.
He noted that Barari DV Ghana Limited is also required to contribute 1 percent of its revenue to a community development fund for the upliftment of the mining area.
Mr. Edward NanaYaw Koranteng, Chief Executive for Minerals Income Investment Fund (MIIF), spelt out several financial benefits to Ghanaians, saying MIIF identified opportunities for undervalued shares at the time of closing the transaction with the locked-in price of USD per share, and intrinsic value ranging of USD 1.25 to USD 1.9 per share.
“MIIF has already made a 31% gain in its planned investment in the lithium deal,” he added.
