Vice President of the think-tank IMANI Centre for Policy and Education, Bright Simons, has raised significant concerns regarding the timeline and terms of Ghana’s first lithium mining project.
According to Mr Simons in a post on X, Thursday, February 8, the American company, Piedmont, which funded the feasibility study for the project, has indicated that construction of the mine is not set to begin until 2025.
Furthermore, Piedmont, he said, has reserved the right to decide next year whether to proceed with its investment in the project, despite earlier claims suggesting the imminent commencement of construction.
“The American company, Piedmont, that funded the main feasibility for Ghana’s first lithium lease & is expected to fund construction in exchange for 50% of all the lithium says the project will begin in 2025 & it will make a decision next year if it will actually invest.
This revelation contradicts previous assertions about the timing of the project’s implementation, casting doubt on the government’s plans for the lithium sector.
Mr Simons has emphasized the importance of scrutinizing these developments, particularly in light of Parliament’s impending ratification of the lease agreement.
“This update contradicts claims that the mine construction is starting this year. It also means that Parliament shouldn’t be rushed into ratifying the lease. Govt needs to be asked hard questions about local refining of the lithium concentrate,” Mr Simons wrote.
The government has granted Barari DV Ghana Limited, a subsidiary of Atlantic Lithium Limited, a fifteen-year mining lease to commence the construction and mining of lithium at Ewoyaa in the Mfantseman Municipality of the Central Region.
The issuance of the mining lease is subject to ratification by the Ghanaian parliament
In 2021, Piedmont Lithium acquired an equity interest in Atlantic Lithium with the ability to earn a 50% ownership interest in Atlantic Lithium’s Ghanaian lithium portfolio.
Fast forward, on October 24, 2023, Piedmont Lithium noted that Ghana’s Ministry of Lands and Natural Resources has granted a mining lease for the Ewoyaa Lithium Project (“Ewoyaa” or the “Project”), which is being developed by itself and its partner, Atlantic Lithium Limited (“Atlantic Lithium”).
Prior to this, Piedmont Lithium in August of the same year announced that it exercised its option to acquire an initial 22.5% interest in Ewoyaa, subject to government approvals.
Piedmont has a right to earn an additional 27.5% interest in the project, subject to satisfying certain funding requirements, which would result in Piedmont and Atlantic Lithium each owning 50% of Ewoyaa, exclusive of the expected MIIF investment and the Ghanaian government’s carried interest.
Piedmont also holds an offtake agreement to purchase 50% of lithium concentrate production at Ewoyaa on a market-based pricing mechanism for the life of the mine.
Prior to starting construction, approval from the Environmental Protection Agency of Ghana will also be required. Atlantic Lithium expects the Ewoyaa permitting process to be finalized in second half of 2024.