The government has issued a fifteen-year mining lease to Barari DV Ghana Limited, a subsidiary of Atlantic Lithium Limited, enabling them to commence lithium mining in Ewoyaa, within the Mfantseman Municipality of the Central Region.
During a brief ceremony to sign a mining lease for Barari DV Ltd., the Minister for Lands and Natural Resources, Samuel A. Jinapor, explained that the government decided not to treat lithium the same way as other minerals have been treated.
As a result, a special policy for the exploitation and management of this mineral was deemed necessary before granting any mining lease.
After extensive consultations and approval by Cabinet, a policy for the exploitation and management of green minerals, including lithium, was endorsed by Parliament and integrated into the mining lease issued to the company.
Mr. Jinapor emphasized that the agreed terms provide the Government and the people of Ghana with greater value in the mining of lithium. He highlighted key aspects of the lease, including:
- An increased royalty rate from the standard 5% to 10%.
A royalty rate refers to the percentage of revenue or profit that one party (the licensee) agrees to pay to another party (the licensor) in exchange for the right to use a specific asset or intellectual property.
- An increase in the state’s free-carried interest in the mining operation from 10% to 13%.
Free-carried interest refers to a portion of ownership or equity interest in an investment that an individual or entity holds without having to make any financial contributions or bear any of the associated risks.
- The acquisition of an additional 6% in the mining operation by the government through the Minerals Income Investment Fund (MIIF).
- The government will also secure a 3.06% stake in the company’s parent entity, listed on the Australian and London Stock Exchanges.
- The requirement for the company to list on the Ghana Stock Exchange to allow Ghanaian entities, such as pension funds and individuals, to participate in the business.
- The commitment of the company to contribute 1% of its revenue to a Community Development Fund, which will be used for the development of communities affected by its operations.
- The company’s obligation is to establish a chemical plant for lithium processing. If the company is unable to establish such a plant, it will provide its lithium to third-party chemical plants in the country, promoting job creation and development in mining communities and across Ghana.