Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye, has made a clear appeal to Ghanaians, urging them to stand against any new mining contracts that do not incorporate local mineral refinement.
He emphatically stated that the time has come for Ghana to enhance the value of its minerals, thereby increasing the country’s foreign exchange earnings.
This augmentation in foreign exchange earnings, he highlighted, will bolster the strength of the local currency, the Cedi.
In a tweet sighted by GhanaWeb Business, Dr John Kwakye stated that, “Ghanaians must oppose all new mining contracts that do not include refinement locally. We have to start adding value to our minerals to increase our forex earnings to shore up the cedi.”
This follows the Government of Ghana’s recent approval of a 15-year mining lease to Barari DV Ghana Limited, a subsidiary of Atlantic Lithium Limited, allowing them to initiate lithium mining operations at Ewoyaa in the Central Region. The $250 million project is set to begin production by 2025.
The lease agreement, signed by the Minister of Lands and Natural Resources, Samuel Abu Jinapor, in Accra on October 19, 2023, covers an area of approximately 42.63 square kilometers. Compliant with the country’s Green Minerals Policy, the mining lease entails an increase in royalties, upping them from the standard 5 percent to 10 percent.
Furthermore, the state’s free carried interest has been elevated from 10 percent to 13 percent. The government will also secure an additional six percent share in the mining company through the Minerals Income Investment Fund (MIIF) and 3.06 percent shares in the holding company, which is publicly listed on the Australian and London Stock exchanges.
This development aligns with the policy presented to Parliament on July 13, 2022, by the Lands and Natural Resources Minister on behalf of President Akufo-Addo. The policy’s primary focus is to ensure that the exploitation of green minerals benefits the people of Ghana. Subsequently, the policy was submitted to Cabinet, receiving approval on July 27, 2023, after substantial deliberation and critique.
Key features of the policy include an increase in royalty rates, raising Ghanaian participation in green mineral operations to a minimum of 30 percent, an emphasis on enhanced local content, local participation, including listing on the Ghana Stock Exchange, and promoting value addition and beneficiation.
Based on these policies, the government initiated negotiations with Atlantic Lithium.