Ghana Issues First Lease for Lithium Extraction

Ghana has signed a 15-year mining lease agreement with Atlantic Lithium Limited for the extraction of lithium in the country.

The agreement which defies the standard mining agreements of the country was signed by the Minister for Lands and Natural Resources, Samuel Abu Jinapor on Thursday, October 19, 2023.

The company was represented at the meeting by Neil Herbert, Executive Chairman of Atlantic Lithium Limited.

The agreement affords Barari DV Ltd, a subsidiary of Atlantic Lithium Limited, to commence the construction and production of lithium in Ghana.

Addressing the press ahead of the singing, the Minister for Lands explained that Atlantic Lithium won the bid for a lease to extract lithium in the country after exploring and discovering the green mineral in the Central region in 2017.

He said a Policy statement outlining the guidelines for their operation was presented to the company afterwards, a copy of which was also made available to Parliament.

Additionally, he said a memorandum for Policy Approval for the exploitation and management of the green minerals was submitted to the Cabinet. This received an amendment and subsequent approval in July 2023.

“Based on these policies approved by the Cabinet of President Akufo-Addo, we entered into negotiations with the Atlantic Lithium,” he told the press.

Agreement
Mr Jinapor disclosed the lease differs from the country’s standard mining lease due to the policy approval by the Cabinet.

Per their agreement, he said, there will be an increase in royalties rate from 5% to 10%; an increase in the Government’s free carried interest from 10% to 13%; additional Government participation through the acquisition of 6% shares in the company and 3.06% shares in the companies holding company listed on the Australian and London Stocks Exchange.

In addition to that, he said the Government and MIIF would be represented on the Board of both the local and the holding companies to protect Ghana’s interests.

Also, the company is required to list on the Ghana Stock Exchange and contribute 1% of its revenue to a Community Development Fund for the development of communities impacted by their operations, in addition to 1% Growth and Sustainability Levy, as well as other levies and taxes.

He furthered, “In terms of value addition, the company will complete a feasibility study for the establishment of a chemical plant within 4 months, and in the event the company is unable to establish a chemical plant in the country, it will provide its minerals to feed any chemical plant established in the country. This will ensure that we do not export lithium in its raw state. Again, all by-products from the operation, such as feldspar and kaolin, would be sold locally to feed the local ceramic and other industries.”

According to the Minister, these agreements are aimed at ensuring minerals benefit the people of Ghana.

On his part, Neil Herbert reassured that the laws of the country will be held in high regard.