Lithium mining gets green light - Atlantic Lithium receives first lease
After six years of exploratory activities, all is set for the mining of lithium to start in commercial quantities, with improved terms for the country.
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This follows the granting of the first-ever mining lease for lithium to Barari DV Ghana Ltd, a subsidiary of Australia-based Atlantic Lithium.
The $250-million project located at Ewoyaa in the Mfantseman Municipality in the Central Region, is expected to commence production by 2025.
The Minister of Lands and Natural Resources, Samuel Abu Jinapor, signed the 15-year lease agreement over an area of approximately 42.63 square kilometres with the company in Accra yesterday.
The lease has increased the royalty regime, more state equity interest, improved local content and a levy for community development.
Mr Jinapor handed over the lease document to the Chairman of Atlantic Lithium, Neil Herbert, with a call on the company to strictly adhere to the country's mining laws.
The Chief Executive Officer (CEO) of the Minerals Commission, Martin Ayisi, was present at the presentation of the signed lease to the company.
Lease requirements
The minister explained that per the mining lease which was in line with the country’s Green Minerals Policy, there had been an increase in royalties rate from the standard five per cent to 10 per cent.
"The company will, therefore, pay 10 per cent royalties on all minerals mined," Mr Jinapor said.
He added that there had also been an increment in the state’s free carried interest from 10 per cent to 13 per cent.
“This means though the government will hold 13 per cent shares in the company, it will not pay for; but will be entitled to dividends and other rights," he explained.
Again, Mr Jinapor, who is also the Member of Parliament for Damongo, said in addition to that, the government, through the Minerals Income Investment Fund (MIIF), would acquire additional six per cent shares in the mining company and 3.06 per shares in the holding company, which had been listed on the Australian and London Stocks exchanges.
"This will bring the government’s interest in the company to 19 per cent in the local company, and 3.06 per cent in the foreign holding company," he added.
Mr Jinapor also said as part of the new dawn, the government and MIIF would have representations on the boards of the local company and foreign companies to protect the government’s interest.
Local content
As a measure to ensure that other interested Ghanaians benefited from the mining operation, the minister indicated that the company would list on the Ghana Stock Exchange (GSE) "and their shares will be made available to Ghanaian entities and individuals, including the Social Security and National Insurance Trust (SSNIT), pension funds and other high-income individuals.”
"In addition to all taxes, royalties and levies, including one per cent growth and sustainability levy, the company will also pay one per cent of its revenue into a Community
Development Fund to be utilised for the development of communities impacted by its operations," Mr Jinapor added.
Feasibility study
In terms of value addition, the Lands and Natural Resources Minister said the company had committed to complete a feasibility study for the establishment of a chemical plant within four months of the signing of the lease.
"As I have said before, our commitment is to ensure that as much as possible, we add value to these minerals before exporting them.
We do not intend to export lithium in its raw state.
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So, we have agreed that if the company is unable to establish a chemical plant in the country, it will provide its minerals mined to any chemical plant established in the country.
This will ensure that we do not export lithium in its raw state," he said.
The minister further said all by-products from the operation, such as feldspar and kaolin, would have to be sold locally to feed the local ceramic and other industries.
Mr Jinapor said all those measures had been put in place to ensure that the country derived
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