Given the importance of Lithium in the manufacturing of batteries for electric cars, there is a need for a comprehensive policy for this particular mineral in Ghana, Member of Parliament for Bongo, Edward Bawa, has said.
Mr. Bawa said that the policy will guide how Lithium mining should be done in the country.
“There is a need for a policy. If you have a state policy on this mineral, it will then guide whoever is in charge,” he said on the Key Points on TV3 Saturday, December 9 while commenting on the Lithium lease agreement government has signed with a private company.
He further stated that the deal will be properly assessed if it is presented to Parliament.
To that end, the Minority in Parliament has demanded that the government lay before the House the 15-year mining lease with Barari DV Ghana Limited before the commencement of mining of lithium at Ewoyaa in the Mfantseman Municipality of the Central Region.
The Yapei Kusawgu lawmaker told journalists in Parliament on Thursday, December 7, that “Article 268 of the 1992 Constitution is explicit and it states that any transaction, inclduing but not limited to the application for a license to exploit natural resources requires prior parliamentary approval. On this note, I want to make it loud and clear that the agreement between the government of Ghana and Barari DV should be laid before Parliament without delay.
“Let me assure the people of Ghana that the Minority will not let you down. We will scrutinize the agreement, we will not allow this agreement to be rushed through. We will seek the guidance and the involvement of civil society, and we will speak to important personalities including former Chief Justice, Justice Sophia Akuffo who has been vocal on this Lithium agreement. The new order is lithium. Lithium is more profitable than gold, lithium is more profitable than diamond and the world order is moving to this green mineral. So, the Minority will insist that Ghana benefits from these resources and that the terms and agreement, if they are not in the interest of Ghana, the Minority will kick against that.
“We demand that the Akufo-Addo government tables or lays this agreement before Parliament without delay. Let me caution Barari that any attempt to commence mining without parliamentary approval will be illegal. A future NDC government, upon assumption of office on January 7, 2025, all mining licenses that have not met the necessary parliamentary approval, we will do the proper thing and ensure that they cease until they seek the right approval from Parliament.”
He stressed that approval by Parliament is needed before the contract becomes fully valid.
He said this at a press conference in Accra on Thursday, December 7 where he justified the agreement.
In her legal view, this particular transaction ought to have been sent to Parliament for approval.
“My legal view is that it is a transaction that requires ratification, it is not complete. This is a document, it is signed and sealed and delivered, but it is a deal that has to be ratified by a named authority, that is the Parliament of the Republic of Ghana,” she said while speaking as a Distinguished Scholar of the Institute of Economic Affairs (IEA) in Accra on Tuesday, November 28.
Madam Sophia Akufo further indicated that despite comments that this particular agreement is favorable to the country, the contract is not different from the previous ‘Guggisberg-type’ of agreements which have not yielded any benefit to Ghanaians.
“It is not different in principle in the substance from any of Ghana’s previous colonial times types of agreements, some call it the Guggisberg model, whatever description, all those agreements are colonial type of agreements, which over the years have yielded very little good to the overall benefit of the average Ghanaian.
“In modern best practices the exploitation or extraction of mineral resources discovered by either a joint venture agreement whereby the host country takes an agreed ownership in the mining company or a service contract whereby the host country is the owner, contracts the mining company and the mining company can be selected through transparent competitive bidding process to mine the mineral and to reinvest for its cost of reduction plus profit margin so that the mining company is in contract to the owner. The ownership of the mining remains completely in the hands of the state,” she said.
But addressing the press conference, Samuel Abu Jinapor said after hinting at seeking parliamentary approval that, “Suffice for me to point out that it is the first time in the history of our country that we have successfully negotiated for 10 percent royalties for any mineral which is one of the highest for the exploration of any mineral across the world.”
He added “We have already secured 19 percent state participation in this mining company with the requirement to scale it up to a minimum of Ghanaian participation through listing on the Ghana Stock Exchange for shares to be made available to Ghanaians and Ghanaian entities.
“What this simply means is that when it is all over, Barari DV Limited, the holder of this mineral right of lithium, Ghanaian and state participation will be 30 percent and foreign participation will be a maximum of 70 percent and this has never happened in the history of our country in respect of any mineral.
“And for the first time in the history of our country, a mineral lease contains provision for the establishment of a refinery and that is value addition and appreciation and this is the first time.”
Ghana granted a 15-year mining lease to Barari DV Ghana Limited, a subsidiary of Atlantic Lithium Limited, to commence the construction and mining of lithium at Ewoyaa in the Mfantseman Municipality of the Central Region.
The lease incorporates new and enhanced terms intended to ensure that the country benefits, optimally, from this mineral. This includes an increase in royalty rate, state and Ghanaian participation, as well as value addition to the mineral mined.
The granting of the mining lease followed the completion of prospecting and feasibility studies by the company, as well as series of negotiations between the Government and the Company.
The lease covered an area of approximately 42.63 square kilometres, and grants the company the exclusive right to work and produce lithium and associated minerals in the area, in accordance with the mining laws of the country.
Lithium is one of the main minerals used in the production of lithium-ion batteries, which is being promoted as a substitute for fossil fuels, as the world continues to battle with climate change.
Emissions from the burning of fossil fuels by the internal combustion engines have been identified as one of the major contributors to the climate crisis.
To deal with this, global leaders are promoting a green energy transition, to progressively limit, and ultimately, eliminate carbon emissions.
Already, some countries have passed laws to phase out vehicles that use fossil fuels. This has created an emerging market for the battery industry, and minerals required for the production of batteries, referred to as green minerals or critical minerals.
Currently, African countries that are mining lithium export the mineral in its raw state.
Barari Ltd commenced exploration for lithium in the country in 2017 and discovered high grade lithium in commercial quantities in Ewoyaa.
Geological investigations, also, show 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 is yet to commence the mining of this mineral.
Ealier, while speaking at a short ceremony to sign a mining lease for Barari DV Ltd., the Mr Abu Jinapor, said government took a decision not to treat this mineral the same way the other minerals have been treated.
It was, therefore, necessary to put in place a special policy for the exploitation and management of this mineral before granting any mining lease.
He said after series of consultations, Cabinet approved a policy for the exploitation and management of green minerals including lithium, and the mining lease granted the company, incorporates the policy approved by Parliament.
“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 said the agreed terms give Government and the people of Ghana greater value in the mining of this mineral.
By Laud Nartey