President of IMANI Africa, Franklin Cudjoe says Ghana is making a mockery of itself after proposing 7% royalty in the revised lithium agreement deal with Barari DV.
According to him, it still does not make sense to revise a deal that was originally 10% to 7%.
On Friday, the Minister for Lands and Natural Resources, Emmanuel Armah Kofi Buah laid before Parliament the Minerals and Mining Royalty Regulations, 2025, aimed at introducing variable royalty bands for gold, lithium and other minerals.
The Legislative Instrument establishes a sliding scale framework that allows royalty rates to be adjusted in line with fluctuations in global commodity prices.
Acting Environment Minister, Emmanuel Armah-Kofi Buah, explained that based on current market prices, lithium attracts a royalty rate of 7 percent, which could rise to as much as 12 percent should prices increase.
However, speaking on 3FM’s ‘Hot Edition’ Show with Host Martin Asiedu -Dartey, Franklin Cudjoe said, “Even on the royalty issue, I find it a bit problematic. You know, I don’t think anybody suggested that the Minister cannot set any percentage he wants, right? Now, in the argument that is being made, as I’m hearing right now, that sliding scale is useful, which is, by the way a good thing, but it will be based on market performance of lithium, right?
Now, let’s go back two years ago, when the last administration was about signing this deal with the same company, the price of lithium, the ore at that time, was $800. Now, the people are willing to sign with a 10% royalty for Ghana. Listen carefully. Now, their own cost, their own calculated cost of mining the ore was $610. So, if you look at it critically at their margins, they were going to make at the time was 20%, but they were willing to sign, including the 10% royalty.
Listen carefully. Now, fast forward, a new government has come. The minister says, yes, we know, but he’s taking it back to 7% for a start and claiming that if the market prices, if the conditions do well, then we’ll go up. But the market conditions are better today, because today the price of lithium ore per ton is $1,200”. Franklin stressed.
He subsequently, described the agreement as not being in the best interest of Ghana and further chastised the government for relying on the data provided by the company to do its own assessment.
“Do you know how mocking and mockery this whole thing sounds? It’s as if we are doing everything and throwing ourselves at this investor. Look, I’m a capitalist. I’m a private sector person but I don’t condone what I’m beginning to see, like chrony capitalist arrangements. It doesn’t make sense to me. If you want the company to do it, why are you giving different concessions when the price of lithium today is $1,000? They’re making 44% profit margin, and they want more concessions, and the minister is willing to give them”.
“Let’s base the value on their analysis, as well as our analysis. And even if you base your analysis on the company’s figures, the company’s figures, by their own books that we have seen, sits around $10 cost, because our ore is rich. A company can come and tell you that it will cost me X to do this, so give me concession. You have to use your head. Use your own people, investigate the cost, and then compare and then when you compare, you say, OK. As we speak, Ghana has done nothing, No physical study of its own. They are basing everything on the company’s data,” Mr Cudjoe pointed out.
By Richard Bright Addo
