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.
This lease comes with updated and enhanced terms designed to ensure the optimal benefit of the country from the extraction of this mineral. These terms encompass an increased royalty rate, the participation of the state and Ghanaian stakeholders, and value addition to the mined mineral.
The issuance of this mining lease follows the completion of prospecting and feasibility studies by the company, along with extensive negotiations between the government and the company.
The mining lease covers an approximate area of 42.63 square kilometers, granting the company exclusive rights to exploit and produce lithium and associated minerals in accordance with the country’s mining regulations.
Lithium is a primary mineral used in the production of lithium-ion batteries, which are advocated as an alternative to fossil fuels as the world grapples with climate change. The burning of fossil fuels by internal combustion engines is a major contributor to the climate crisis.
To address this issue, global leaders are promoting a transition to green energy to reduce and ultimately eliminate carbon emissions. Some countries have already enacted legislation to phase out fossil fuel-powered vehicles, creating a growing market for the battery industry and the minerals essential for battery production, often referred to as green minerals or critical minerals. Currently, many African countries that mine lithium export the mineral in its raw form.
Barari Ltd. began exploring for lithium in the country in 2017 and discovered high-grade lithium in commercial quantities in Ewoyaa. Geological investigations also indicate deposits in various parts of the country, from the south to the north, predominantly around Cape Coast, Kumasi, Sunyani, Bole, and Wa. However, the country has not yet begun mining this mineral.
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.
“The lease we are signing today differs from our standard mining lease in that, it incorporates the agreed terms we have concluded with the company, based on the policy approved by Cabinet,” the minister explained.
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%.
- An increase in the state’s free-carried interest in the mining operation from 10% to 13%.
- 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.
Mr. Jinapor emphasized the government’s recognition of the impact of mining on local communities and its commitment to ensuring that these communities, as well as Ghanaian citizens who legally own these minerals, benefit from their exploitation.
He urged the Company to strictly adhere to the country’s mining laws and the agreement with the government, engaging in responsible, sustainable, and environmentally sound mining practices.
The Executive Chairman of Atlantic Lithium Limited, Mr. Niel Herbert, expressed gratitude to the Minister and the Government for their collaboration in reaching this milestone.
He stressed the significance of the Ewoyaa project to the company and its willingness to work with the government to ensure the effective utilization of this mineral for the benefit of Ghanaians. Mr. Herbert pledged the company’s commitment to abiding by Ghana’s laws and ensuring a safe mining environment.