Business & Finance

Minerals Commission To Address Concerns About 15-year Lithium Lease

The Minerals Commission has reacted to concerns raised by the Institute of Economic Affairs (IEA) over a 15-year lithium lease agreement granted by the government of Ghana to Barari DV Ltd, a subsidiary of Atlantic Lithium Limited to mine in 42.63 Km of land in and around Ewoyaa in the Mfantseman Municipality of the Central Region.

According to the Commission, the concerns raised by stakeholders suggest they “have not read the agreement in its entirety”.

It also stated that the concerns are based on “assumptions that are inaccurate and assertions that are not supported by facts or any data”.

“Recognizing these concerns raised, the Commission has scheduled a press conference on Thursday, 7th December 2023 to further explain the nature of the contract and procedures, including the next steps after the grant of the lease.”

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It comes after the IEA compared the agreement to colonial-era leases which yielded minimal benefits for the country.

The Minister for Lands and Natural Resources, Samuel Abu Jinapor, spearheaded the signing of the lease on October 19, 2023.

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 holding company listed on the Australian and London Stocks Exchange.

In addition to that, he said the government and Minerals Income Investment Fund (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.”

 

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