In a major policy shift aimed at dismantling Africa’s historic “extract and export” commodities model, the Government of Ghana has announced a strict, value-addition mandate for its emerging critical minerals sector.
Under the new directive, any future exploitation of the nation’s commercially viable lithium deposits must be legally bound to domestic refining, processing, and downstream industrial integration.
The announcement, delivered at the opening of the 19th edition of the West African Mining and Power Expo (WAMPEX) in Accra, marks a definitive line in the sand for international mining conglomerates. Rather than allowing raw lithium ores or basic concentrates to leave Ghanaian ports unchecked, the state is positioning itself to capture a significant share of the global electric vehicle (EV) supply chain, with an ultimate eye on establishing a full-scale domestic battery manufacturing industry.
Rewriting the Extractive Paradigm
Addressing an international assembly of mining executives, investors, and regional policymakers, Lands and Natural Resources Minister Emmanuel Armah-Kofi Buah outlined a comprehensive strategy designed to maximize the economic returns of Ghana’s sovereign mineral wealth.
“Ghana is taking deliberate steps to move up the mining value chain from extraction to refining, processing, and industrial use so that more of the value generated from our mineral resources is retained within the national economy,” Minister Armah-Kofi Buah stated.
The Minister emphasized that international demand for green transition minerals driven by global net-zero mandates presents African nations with a historic, time-sensitive window to industrialize. However, he warned that this opportunity would be entirely squandered if governments repeat the historical mistakes made with gold, timber, and raw bauxite.
“As global demand for lithium, a critical input for modern technologies, continues to rise, Ghana is committed to ensuring that its lithium resources are not simply extracted and exported as raw materials, but that value addition takes place here in Ghana,” Buah maintained.
No Lithium Without Batteries: A Direct Ultimatum to Investors
The government’s industrialization blueprint explicitly links resource access to technology transfer and secondary infrastructure development. Drawing parallels to ongoing state-backed initiatives like the Ghana Integrated Aluminium Development Corporation (GIADEC) and the Ghana Integrated Iron and Steel Development Corporation (GIISDEC) which seek to build integrated, domestic mine-to-smelter supply chains the Minister stated that the lithium strategy will follow an equally rigid value-retention framework.
The state’s ultimate objective is to feed processed lithium carbonate and hydroxide directly into local manufacturing hubs capable of supplying lithium-ion packs to the global automotive market.
“Lithium’s ultimate product is batteries that are needed for the vehicles of the future,” Minister Armah-Kofi Buah remarked during his keynote presentation.
Issuing a clear directive to foreign entities eyeing the country’s lithium tenements, including the world-class Ewoyaa Project in the Central Region, the Minister added: “Anybody who comes to talk about lithium should also be talking to us about how those batteries will ultimately be produced in Ghana.”
Navigating Volatility and Global Competition
The policy shift arrives at a critical juncture for the domestic mining ecosystem. Following a prolonged legislative debate over equity distributions and sliding-scale royalty formulas, Ghana’s Minerals Income Investment Fund (MIIF) has aggressively scaled up direct state participation in the lithium sector, securing enhanced carried interests to protect national revenue margins.
However, international commodity analysts warn that transitioning from a raw exporter to a high-tech processing hub requires substantial capital injections and highly reliable energy grids. Setting up advanced chemical refining facilities requires specialized infrastructure, consistent electricity pricing, and a highly skilled technical workforce.
Furthermore, global lithium markets have faced intense price volatility since 2023, exposing mining projects to significant financing pressures. Despite these global headwinds, Ghanaian officials maintain that domestic processing is the only viable path to economic sovereignty.
By enforcing local-content protocols and demanding downstream manufacturing pipelines, Ghana aims to set a new precedent for resource governance in West Africa transitioning from a traditional supplier of raw commodities into a self-sustaining hub for the global clean energy frontier.
The flag-bearer of the NDC, John Dramani Mahama, has promised to review the laws that govern the extractive industry in next government.
He said, this will help the country to maximize her share and local participation in the exploitation of our natural resources.
Commenting on recently signed lithium mining lease agreement, the NDC holds the view, aside the fundamental issues battling the agreement, there are certain germane issues about the terms of the Ghana-Barari DV lease agreement that are worth highlighting. It has therefore listed a number of concerns in a press statement issued today.
“The NDC wants a deal that provides a clear and unambiguous strategy for maximizing the benefits of lithium mining through value chain participation”, the NDC statement signed by the National Communications Officer, Sammy Gyemfi, stated. “There is therefore the need for mandatory requirements for the local processing of raw lithium before it is exported out of the country and a 100% off-taker for the by-products thereof (i.e Feldspar, Silica, Kaolin etc.) for local industries and manufacturing companies.”
The NDC further believe that, the green minerals of the country, should not be exploited based on the existing mining laws and policies, which are predominantly tailored for gold mining and have not benefited the nation over the years.
“We are of the firm opinion, that it is about time the existing colonial model of mining lease concession agreements, was reviewed.
“New models for the exploitation of our mineral resources such as Joint Ventures and Service Agreements, that provide for equitable benefit sharing, enhanced local participation and value addition, should be considered as part of the review of the laws and policies governing our extractive sector.”
Read Full Press Statement Below:
PRESS STATEMENT
For Immediate Release
13th December, 2023
NDC’S POSITION ON THE GHANA-BARARI DV LITHIUM DEAL
The National Democratic Congress (NDC) has keenly followed public discussions on the controversial Mining Lease Agreement executed between the Government of Ghana and Barari DV Ghana Limited, for the exploitation of Lithium and other associated minerals in the Ewoyaa community of the Mfantseman Municipality of Ghana.
After a meticulous scrutiny of the terms of the Mining Lease Agreement, the NDC has come to the conclusion that the Ghana-Barari Lithium agreement is not in the best interest of Ghana.
1. It is an indisputable fact, that mining hasn’t benefited us as a nation over the years. Hence, there is the need for an urgent review of the country’s existing mining laws and policies, particularly in relation to green minerals.
2. This is why the flag-bearer of the NDC, H.E John Dramani Mahama has promised to review the laws that govern the extractive industry, in order for the country to maximize her share and local participation in the exploitation of our natural resources.
3. The NDC holds the view, that the green minerals of the country, should not be exploited based on the existing mining laws and policies, which are predominantly tailored for gold mining and have not benefited the nation over the years.
4. We are of the firm opinion, that it is about time the existing colonial model of mining lease concession agreements, was reviewed. New models for the exploitation of our mineral resources such as Joint Ventures and Service Agreements, that provide for equitable benefit sharing, enhanced local participation and value addition, should be considered as part of the review of the laws and policies governing our extractive sector.
5. Our beloved country urgently needs a reviewed mining regime, that provides for the sustainable funding and strengthening of the Ghana Geological Survey Authority, to engage in reconnaissance and prospecting, particularly in relation to green minerals. We believe that this, if supported by the Minerals Income and Investment Fund (MIIF) under the right policy framework, will enhance the bargaining power of the state in the exploitation of our mineral resources.
6. It is for these reasons, that the Akufo-Addo/Bawumia/NPP government should have extensively engaged all affected local communities, as well as key stakeholders including CSOs in the extractive sector, before executing the Barari-Lithium agreement. Sadly, there has been very little engagement by government with the affected local communities and key stakeholders in the processes leading to the execution of the controversial lithium deal. The NDC believes that, all stakeholders in the extractive sector must have a say in the kind of law and model, under which our lithium and other green minerals should be exploited for the maximum benefit of the State.
7. Aside the fundamental issues enumerated above, there are certain germane issues about the terms of the Ghana-Barari DV lease agreement that are worth highlighting:
I) First and foremost, the requirement in the mining lease agreement for the establishment of a chemical plant to process our lithium locally, is very weak to say the least.
* We note with concern, that under Schedule Two (2) of the lease agreement, the establishment of a local chemical plant by the company is not mandatory, but contingent on the conduct of a scoping study to determine the economic viability of the processing of lithium in Ghana.
* Even more worrying, is the fact that, paragraphs 1(b)(c) and (d) of schedule two (2) of the lease agreement, envisages the inability of the company (Barari DV) to meet this requirement. This makes nonsense of the claim by government that no raw lithium will be exported from Ghana under the agreement.
II) Secondly, there are no specific provisions in the mining lease that emphasize Ghana’s control over the lithium mining value chain and the benefits thereof.
* In the extractive sector, the ability of a country to optimize gains from the value chain is the surest way of domesticating benefits.
* The NDC wants a deal that provides a clear and unambiguous strategy for maximizing the benefits of lithium mining through value chain participation. There is therefore the need for mandatory requirements for the local processing of raw lithium before it is exported out of the country and a 100% off-taker for the by-products thereof (i.e Feldspar, Silica, Kaolin etc.) for local industries and manufacturing companies.
III) On the claim by government, that Barari DV will be paying corporate tax of 35% under the deal, it is important for government to clarify the status of the company and provide the full facts relative to concessions that have been granted the company.
*What the Mining Lease expressly provides is that, Barari DV shall pay taxes in accordance with the mining laws of Ghana, without more.
* We are however told that the Company is registered under the Ghana Free Zones Authority and is entitled to a 10-year tax holiday, when such tax concessions are ordinarily not granted to mining companies in the country. This if true, will deprive the country of corporate taxes during the first ten years of the Ewoyaa Lithium project. This will effectively limit Ghana’s share to the paltry 10% royalty and marginal benefits from our 13% carried interest and the 6% equity held by the Minerals Income Investment Fund (MIIF).
* It is therefore imperative, for government to clarify the status and tax obligation of Barari DV and its parent company. Ghanaians deserve to know whether or not the company is a free zone company and why a mining company should be accorded free zone status. Ghanaians deserve to know all the concessions government is giving the company (Barari DV/Atlantic Lithium) for a holistic assessment of the benefits of the deal.
* Beyond that, strict provisions on tax compliance and enforcement are required to ensure that the state is not cheated through transfer pricing and creative accounting.
IV) It is important to make the point, that government’s boastful claim about securing a 10% Royalty under the deal, is a celebration of mediocrity.
* It is worthy of note, that the prevailing royalty rate of 5% was based on section 25 of the Minerals and Mining Act, 2007 (ACT 703), which provides for a royalty rate of not less than 3% and not more than 6%. This law was amended by the erstwhile NDC/Mahama government, as far back as 2015 by ACT 900, which has made the Royalty rate open-ended and subject to negotiations.
* Also, the prevailing industry royalty rate of 5% relates to the country’s traditional minerals such as gold, bauxite etc. The Barari-Lithium agreement is the first deal for the exploitation of a Green Mineral in Ghana. Therefore, comparing the prevailing royalty rate of 5% to a 10% royalty rate for a Green Mineral like lithium, is an exercise in mediocrity.
* More importantly, we think that government should have opted for a flexible range of royalty rate, which takes into account windfall profit of the company. This royalty arrangement has been adopted by Chile, which currently has a royalty rate range of 8% to 21% depending on certain variables. In similar vein, the 10% royalty rate secured by government could have been the baseline rate, subject to upward adjustment in cases of windfall revenue or profit by the company, if government had negotiated properly.
V) Also, the requirement in the mining lease agreement for Barari DV or its parent company, Atlantic Lithium, to list on the Ghana Stock Exchange, is problematic for several reasons, including the following;
● No specific time-frame has been provided in the mining lease agreement for such listing.
● Listing on the Ghana Stock Exchange (GSE) may not necessarily benefit Ghanaians as foreigners can invest on the GSE and/or hide behind Ghanaian fronts to buy shares.
● Over the years, similar arrangements have largely benefited a few rich and powerful Ghanaians and not the ordinary Ghanaian.
● Ghana’s own previous experience with the listing of Anglogold Ashanti shares on the Ghana Stock Exchange, where Ghanaians who purchased shares completely lost out, should awaken us to the fact that, listing on the Ghana Stock Exchange can go wrong.
Suggestions for the Minerals Income and Investment Fund (MIIF) to acquire the said 11% Equity in the Ghana operations of the Barari DV, for and on behalf of the people of Ghana, is therefore worth considering.
VI) These facts completely belie the claim by government, that Ghanaian participation in the Ewoyaa Lithium project will be 30%. Beyond Ghana’s Free Carried Interest of 13% and the wholly inadequate 6% Equity acquired by MIIF, there are no specific provisions in the lease agreement that provide with certainty, a Ghanaian participation rate of 30% in the foreseeable future.
VII) Again, it is interesting to note, that under the shareholding structure of the company, there is a 4.4% Equity in the name of “Previous Land Owners”. In the spirit of transparency, the NDC demands a full disclosure of the identities of the Beneficial Owners of that 4.4% Equity and how that was arrived at. Ghanaians deserve to know who these “previous land owners” are.
8. In the face of all these pertinent issues, particularly, the non-existence of a feasibility report and a mandatory requirement for the local processing of our lithium resources, the NDC is of the view, that the Ghana-Barari Lithium deal is not in the best interest of Ghana. Thus, the ratification of the Mining Lease agreement executed by the Akufo-Addo/Bawumia NPP Government, should not even arise at this stage. It is our considered position, that Parliament should not consider the ratification of the Lease Agreement until all these pertinent issues are satisfactorily addressed in the best interest of Ghanaians.
The Minister for Lands and Natural Resources, Samuel Abu Jinapor, has revealed that the mining lease agreement between Ghana and Barari DV Ghana Limited for lithium extraction will be presented to Parliament for ratification early next year.
This announcement was made during a press briefing last week, where the minister addressed concerns over the lithium mining lease signed on October 20, 2023.
According to the Damongo legislator, the mining lease mandates ratification by Parliament, and failure to undergo this process would result in the annulment of the lease.
“There has been an issue of ratification of the lease. It has been raised by several people. This has never been lost on us as this is expressly provided for the mining lease granted to Barari DV Ghana Limited. Specifically, Clause 1E of the lease states ‘the mining lease is subject to ratification by Parliament in accordance with Article 2681 of the constitution and section 54 of Act 703’. ‘Upon execution of this mining lease, the Minister shall cause the mining lease to be laid in Parliament for ratification’.”
“By the very term of the lease, therefore, ratification by Parliament is a condition precedent, he said, “as an unratified mining lease confers no enforceable right, and the government has always been mindful of this decision.”
“The mining lease in question will be laid before Parliament for ratification,” he added.
For instance, a former Chief Justice of Ghana, Sophia Akuffo, has expressed the view that the recently signed lithium lease by the government lacks completeness without parliamentary ratification.
According to her legal analysis, this particular transaction should have undergone the process of submission to Parliament for approval.
“My legal view is that it is a transaction that requires ratification, it is not complete. This is a document, it is signed and sealed and delivered but it is a deal that has to be ratified by a named authority, that is the Parliament of the Republic of Ghana,” she said while speaking as a Distinguished Scholar of the Institute of Economic Affairs (IEA) in Accra on Tuesday, November 28.
Meanwhile, the Minerals Commission responded to criticism from certain individuals regarding the lithium deal between the government of Ghana and Barari DV Ghana Limited.
In a press statement issued on Monday, December 4, the Minerals Commission pointed out that the critical statements made by some individuals stem from a lack of thorough reading of the agreement.
The statement emphasized that many concerns are based on inaccurate assumptions and unsupported assertions.
The Minerals Commission reiterated that the lithium deal is in the best interest of the nation.
The mining lease, granted for 15 years to Barari, a subsidiary of Atlantic Lithium Limited, an Australian company listed on the Australian Securities Exchange (ASX) and the Alternative Investment Market (AIM) of the London Stock Exchange, covers an area of 42.63 km² in and around Ewoyaa in the Mfantseman Municipality of the Central Region.
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% royalty and 13% free carried interest by the state, surpassing the existing 5% and 10%, respectively, for other mining agreements.
Barari DV Ghana Limited is also required to contribute 1% of its revenue to a community development fund for the upliftment of the mining area.
The Institute of Economic Affairs (IEA) has cautioned the Government of Ghana on the lithium mining agreement it signed with Barari DV Ghana Limited.
The Institute has indicated that, the agreement requires ratification by parliament as per Article 268 of the 1992 Constitution in order to be legally effective.
A swathe of land was leased to the Barari DV Ghana at Ewoyaa in the Mfantsiman Municipality in the Central region and granted rights to mine lithium and ‘other associated minerals’, for a term of 15 years from the date of the agreement. Already, the Minority in Parliament has called on the government and the beneficiary company to present the agreement for ratification before it is executed.
“The IEA firmly believes that the terms of the agreement, which the Minister of Lands and Natural Resources and the Chief Executive Officer of the Minerals Commission, have touted as favourable to Ghana and surpassing those of other lithium leases around the world, is not different in principle and substance from any Ghana’s previous colonial-type agreements, which over the years, have yielded very little to the overall benefit of the average Ghanaian”, it said in a statement released last week.
The Institute said “in modern best-practice, the exploitation or extraction of mineral resources is covered by either a joint-venture agreement – whereby the host country takes an agreed ownership in the mining company – or a service contract – whereby the host country contracts the mining company, selected through a transparent and competitive bidding process, to mine the mineral and be reimbursed for its cost of production plus a profit margin”.
It urged parliament to exercise caution and patience to secure a modern, best practice-based arrangement that will guarantee maximum benefit for the people of the Republic Ghana, “instead of the usual colonial-type lease that benefits foreign companies’, masquerading as investors, and their local cohorts”.
“The IEA recognises Ghana’s natural resources as the low-hanging fruits that can be leveraged to accelerate the development of the country and eradicate poverty within a generation. It is inexcusable that we continue to sell our birthright cheaply only to descend on Western capitals to seek reparation for the slave trade or beg for aid. President Paul Kagame could not have put it more eloquently when he said: If the Owners of Natural Resources Go around Begging, Then You Should Know There’s Something Wrong with Their Minds.”
“Yes, Ghana is rich, let us finally take full and meaningful control of the management of our wealth”, it added.
Ghana government granted Atlantic Lithium’s (ASX: A11) local subsidiary a mining permit for its flagship Ewoyaa project, which will be the West African country’s first lithium operation.
The 15-year permit allows the Australian miner’s unit Barari DV Ghana Limited to start building a lithium mine in the country’s Cape Coast region, around 100 km southwest of capital city Accra.
The decision comes after Atlantic Lithum’s almost six years of exploration and is part of Ghana’s strategy to tap into the global move towards electric vehicles and renewables.
The Ministry of Lands and Natural Resources has increased the royalty rate to 10% from the standard 5% and the state’s interest in the project to 13% from 10%, it said in a statement.
As part of the deal, Ghana’s sovereign wealth fund, the Minerals Income Investment Fund (MIIF), will acquire 6% in Ewoyaa and 3.06% in Atlantic Lithium, which will be required to list on the Ghana Stock Exchange.
The company will also work on developing a lithium processing plant to maximize the economic benefit of a mineral it has often shipped to China for processing, the ministry added.
“The Mining Lease is a major endorsement of the viability of the project and a landmark de-risking milestone in its advancement towards production,” Atlantic Lithium chairman, Neil Herbert, said in a statement.
“The Government of Ghana, which is eager to build upon its mining history that spans back over a century and diversify away from its long-standing gold production, has remained incredibly cooperative throughout our application process and we wholeheartedly welcome their support,” Herbert said.
Half of the lithium produced at Ewoyaa will be sent to a refinery of US-based Piedmont Lithium (NASDAQ, ASX: PLL), which is the Australian firm’s second-largest shareholder and has agreed to provide most of the funds for building the mine.
Atlantic Lithium aims to produce a total of 3.6 million tonnes of spodumene concentrate, or 350,000 tonnes annually, over 12 years from the site. That would make it the world’s 10th-biggest project, according to the company.
