10% Lithium Royalty One Of The World’s Highest- Jinapor

The Minister for Lands and Natural Resources, Samuel Abu Jinapor has touted the agreed 10% royalty rate for Lithium extraction with Barari DV Ltd, a subsidiary of Atlantic Lithium Limited, as one of the highest in the world.

According to him, the rate and other agreements of the lease are Ghana’s first “successfully” negotiated mineral extraction agreement.

Addressing concerns raised against the 15-year lease, the Minister who doubles as the Member of Parliament for Damongo Constituency said, “This lease differs from all previous mining leases in many respects.”

“Suffice for me to point out that it is the first time in the history of our country that we have successfully negotiated for 10% Royalties for any mineral which is one of the highest for exploitation of any mineral across the world,” he said on Thursday, December 7, 2023.

He asserted, “We have already secured a 19% state participation in the mining company with the requirement to scale it up to a minimum of 30% Ghanaian participation through listing on the Ghana Stock Exchange for share to be made available to Ghanaians and Ghanaian entities. This has never happened in the history of the country with respect to any mineral. And for the first time in the history of the country, a mining lease contains provisions for the establishment of a refinery, that is, value addition and beneficiation.”

He said the lease was granted with reference to an adopted policy for the development, management and exploitation of the green minerals which features the contribution of Parliament with subsequent scrutiny and review by Cabinet.

“It was based on this policy we entered into negotiations with the Company leading to the signing of the mining lease.”

Parliamentary Ratification
Reacting to concerns about the Parliamentary disregard, Hon Jinapor said the lease will be laid before Parliament for ratification as it forms part of the terms of the mining lease.

“The mining lease will be laid before Parliament for ratification. That is non-negotiable but before such agreements can be laid before Parliament, it must go through a number of processes including securing cabinet approval.”

According to him, the processes are ongoing for onward Parliamentary consideration and ratification.

Tender Process
On concerns about the disregard for a tender process in awarding the lease to Berari, he explained that International best practice and the country’s Mining Act entitles a company that has undertaken exploration of a mining lease.

He furthered that the use of the tender processes is only suitable when there exists geological statistics and the state is scouting for partners to undertake extraction.

“Tender can be used when the Minerals Commission has adequate mineral resources and the government has undertaken mineral exploration. The historical lack of resources to undertake exploitation means that we have had to depend on private companies to undertake exploration of most of our minerals which then entitles them to the grant of mining leases without going through a tender Process.”

A Ghana Lithium Company
On these concerns, the Minister said the country’s voluminous minerals and its quest to ensure optimal benefit in the exploitation ruled out the option of setting up a Ghana Lithium Company to streamline the extraction of the mineral.

In justification, he explained, “Globally, only China has an end-to-end Lithium value chain. This is why we have instituted the retention of a significant part of the value chain which we will work systematically to eventually construct here in our country the full value chain for lithium.”