Honorary Vice President of IMANI Ghana, Bright Simons, has averred that the Minister for Lands and Natural Resources, Samuel Jinapor, has been misadvised on the lithium deal between the State and Atlantic Lithium Ltd.
This, he noted, is evident from the Minister’s assertions that the country’s lithium exploration deal with Atlantic Lithium is one of the best on the African Continent on the back of a 10% royalty rate and 13% state-carried interest in the company.
Speaking on Joy News’ News file, Mr Simons noted that, there have been instances in the past, particularly in the General Acheampong regime where the country had a 55% equity stake in mining companies coupled with a variable royalty structure.
“The Minister has been misadvised because if you look at the claims he is making that the deal is the best for the country based on the 10% royalty rate and 13% carried interest for the state.
“In the 1970s, Ghana had a 55% interest participation rate in mining companies, there were times too when we had a variable royalty structure that was higher than the current fixed 10% we have now,” he quipped.
Speaking further, he noted that the lithium deal set to be ratified by Parliament must be thoroughly scrutinized by Parliament before its ratification.
“Parliament shouldn’t just rubber stamp the deal because there are significant improvements that can be made to the deal.
“Our advice to Parliament is that the deal should be sent back for additional work before Parliament ratifies it,” he noted.
The mining lease agreement between Ghana and Barari DV Ghana Limited – subsidiary of Atlantic Lithium – for lithium extraction, is expected to be presented to Parliament for ratification by the first quarter of 2024.
The Minister has emphasized that parliamentary ratification is a prerequisite for the lease, as specified in Clause 1E of the agreement, adding that failure to undergo this process would lead to the annulment of the lease.
The Minister clarified the government’s awareness of the importance of parliamentary approval, stating, “By the very term of the lease, therefore, ratification by Parliament is a condition precedent, as an unratified mining lease confers no enforceable right, and the government has always been mindful of this decision.”
He has assured that the mining lease would be presented to Parliament, aligning with constitutional provisions and legal protocols.
The lithium mining lease, granted for 15 years to Barari, a subsidiary of Atlantic Lithium Limited, an Australian company listed on the Australian Securities Exchange (ASX) and the Alternative Investment Market (AIM) of the London Stock Exchange, covers an area of 42.63 km² in and around Ewoyaa in the Mfantseman Municipality of the Central Region.
The $250-million project, located in Ewoyaa, Mfantseman Municipality in the Central Region, is set to commence production by 2025.
The deal includes a 10% royalty and 13% free carried interest by the state, surpassing the existing 5% and 10%, respectively, for other mining agreements.
Barari DV Ghana Limited is also required to contribute 1% of its revenue to a community development fund for the upliftment of the mining area.