Lithium Mining: Gov’t inks 13% carried interest, 10% royalty rate agreement with Atlantic Lithium
As part of this comprehensive agreement, the government, through the Minerals Income Investment Fund (MIIF), will secure an additional 6 percent stake in the mining operation, along with a 3.06 percent interest in the company’s parent entity, which is listed on the Australian and London Stock Exchanges. Furthermore, the company has committed to a listing on the Ghana Stock Exchange (GSE), thereby promoting local participation in this venture.
Government has inked a groundbreaking deal with Barari DV Ghana Limited, a subsidiary of Atlantic Lithium Limited, marking a pivotal moment in the nation’s quest to harness its lithium resources. This agreement, characterized by a royalty rate of 10 percent and a free carried interest of 13 percent, sets the stage for the inaugural mining lease for lithium extraction at Ewoyaa in the Mfantsiman municipality of the Central Region.
This 15-year mining lease incorporates a suite of meticulously structured terms aimed at ensuring optimal returns for the nation from this strategic mineral resource. The significance of this pact lies not only in the economic potential of lithium extraction but also in its role as a critical component in the global energy transition.
Ghana’s Minister for Lands and Natural Resources, Samuel Jinapor, emphasized that the government had taken a deliberate approach to treat lithium differently from other minerals, necessitating the formulation of a unique policy for its exploitation and management. The policy, having received the green light from Parliament, serves as the bedrock for the mining lease granted to Barari DV.
This accord aligns with Ghana’s mining regulations, bestowing the company with the coveted “first right of refusal.” In essence, when a company undertakes exploration and discovers minerals in commercial quantities, it earns the privilege to pursue mining operations. This advantageous arrangement not only empowers the company but also enables the state to secure an increased royalty rate of 10 percent, elevated from the standard 5 percent. Moreover, the state’s free carried interest in the mining operation has been uplifted from 10 percent to a notable 13 percent.
As part of this comprehensive agreement, the government, through the Minerals Income Investment Fund (MIIF), will secure an additional 6 percent stake in the mining operation, along with a 3.06 percent interest in the company’s parent entity, which is listed on the Australian and London Stock Exchanges. Furthermore, the company has committed to a listing on the Ghana Stock Exchange (GSE), thereby promoting local participation in this venture.
To underscore its commitment to responsible resource management and community development, Barari DV Ghana Limited will allocate one percent of its revenue to a Community Development Fund. Additionally, the company will work towards establishing a chemical plant for processing lithium, which, if unrealized, will be made available to third-party chemical plants within the country, bolstering job creation and socio-economic development.
This historic agreement underscores Ghana’s dedication to ensuring that the mining industry benefits not only the government but also the communities directly affected by these operations. As the nation’s journey towards green energy solutions continues, it is evident that this deal marks a pivotal step in the pursuit of sustainable and environmentally sound resource management.
Niel Herbert, the Executive Chairman of Atlantic Lithium Limited, expressed the company’s commitment to collaborate closely with the government to ensure the effective exploitation of lithium for the benefit of all stakeholders. The emphasis on adherence to the nation’s laws and a safe mining environment underscores the collective commitment to a prosperous and responsible lithium mining sector in Ghana.
Source: Norvanreports
