The Africa Policy Lens (APL) has urged citizens, Civil Society Organisations and anti corruption institutions to stand up against the Mahama government’s strange decision to reduce a mutually agreed 10% lithium royalty rate for Ghana by the previous government to 5%.

The previous government reached a mutual agreement with Barari DV Ghana Limited for an upward 10% royalty stake for Ghana.

However, the NDC, which criticised the 10% upward royalty rate in opposition as too low, has now, in government, proposed a reduction from the agreed 10% to 5%, with a claim that the previous government acted illegally in negotiating a higher royalty rate for the country.

The strange stance of the NDC and Mahama government has raised eyebrows, with many questioning how a government, which is supposed to defend the interest of the nation, is rather vehemently pushing for a reduced stake, contrary to ita position in opposition.

In a statement, the APL said the present government’s claim that the previous government acted illegally, in a bid to justify its strange reduction of the royalty rate, smacks of corruption.

“The foregoing analysis demonstrates clearly that the previous government acted appropriately in securing what remains Ghana’s most advantageous mining agreement to date,” the APL said after giving a detailed background to how the previous governemthe reached the 10% mutual agreement.

“Assertions by the current government regarding lithium pricing and the legality of the lease are not only misleading but also raise serious concerns that should engage the attention of citizens and anti-corruption agencies. Should the proposed reduction of the royalty rate from 10 percent to 5 percent be implemented, Ghana stands to forfeit millions of dollars in revenue.”

“Such an outcome would exemplify a corruption-tainted mineral agreement frequently cited in natural resource governance discourse. Moreover, lowering the royalty rate confers legal standing on the company that could complicate future upward adjustments, potentially triggering arbitration under international investment treaties.”

The APL, while hitting out at government for engaging in PR stunt in the justification of its strange move, also urged Parliament not to consider the new proposal, but rather consider the old terms, including the 10% royalty rate reached by the previous government.

“It is therefore imperative that Parliament either ratifies the original lease secured under the NPP government or ensures that any revisions strengthen Ghana’s position. Temporary fluctuations in commodity prices must not serve as justification for weakening fiscal terms.”

“It is particularly troubling that state institutions appear to be advancing public relations narratives favourable to a mining company rather than safeguarding the national interest.”

Below is the full statement by APL:

GHANA’S LITHIUM DEAL: AFRICA POLICY LENS (APL) PREDICTS US$210–630 MILLION LOSS FROM ROYALTY RATE ADJUSTMENT

1.     WHY LITHIUM MATTERS

Critical minerals—often described in contemporary natural resource literature as “minerals of the future”—are collectively referred to as green minerals. This category encompasses lithium, manganese, bauxite, iron, copper, phosphate, cobalt, rare earth elements (REE), and others. Among these, lithium has emerged as particularly significant, increasingly recognized as a mineral of strategic and security importance for nations worldwide.

In the context of the global energy transition driven by the climate change crisis, critical minerals have become central to both sustainable development and geopolitics. They are increasingly positioned as instruments in international trade rivalries, with major powers competing to secure access to resources and control supply chains. Beyond energy, these minerals underpin key sectors such as defence, aerospace, digital technologies, and electric vehicle (EV) production, underscoring their indispensable role in contemporary and future economies.

The International Energy Agency (IEA, 2022) projected a fourfold increase in demand for critical minerals by 2040. Lithium, in particular, is pivotal, as lithium-ion batteries currently power over 90 percent of the world’s EVs. Its strategic importance is amplified by concentrated geographic deposits, high processing costs, and escalating demand. The IEA (2023) further anticipated that global demand for lithium in EV production may rise fortyfold by 2040. Complementing this, Maisel et al. (2023) cautioned that demand could outpace supply, recommending a sixfold increase in current production levels to meet future requirements.

Lithium thus represents a cornerstone of present and future economic development for countries endowed with commercially viable reserves. Ghana exemplifies this potential, with the Ewoyaa deposit ranked as the tenth largest globally in terms of production capacity, positioning the country within the strategic landscape of critical mineral economies.

2.     BACKGROUND OF GHANA’S LITHIUM DISCOVERY & STRUCTURE OF LEASE

Ghana has identified lithium deposits in commercial quantities at Ewoyaa, located within the Mfantseman Municipality of the Central Region. Barari DV Ghana Limited (“Barari”) was initially granted a reconnaissance licence in August 2012, which was subsequently upgraded to a prospecting licence in March 2018 for a three-year term, later renewed for an additional three years in July 2021. The current mining lease encompasses an area of approximately 42.63 km² in and around Ewoyaa.

According to the Company’s Feasibility Study Reports submitted in October 2022 as part of its mining lease application, the following key parameters were outlined:

• Life of Mine: 12 years, with potential extension subject to positive exploration outcomes
• Payback Period: Approximately 17 months
• Estimated Production: About 350,000 tonnes of spodumene concentrate, grading 5.5–6% lithium oxide

•           Projected Mine Construction and Development Cost: US$185 million over 14 months •        Average Sale Price of Lithium Concentrate (over Life of Mine): US$1,587/tonne •           By-Products: Feldspar, kaolin, and quartz (silica)

Policy Basis For Fiscal Negotiations

On 22 May 2023, the then Minister of Lands and Natural Resources, Hon. Samuel Abu Jinapor, submitted a Memorandum on Ghana’s Green Minerals Policy to Cabinet, which subsequently received approval in July 2023. On 13 July 2023, the Minister further presented to Parliament a policy statement on the development of Ghana’s green minerals. This statement outlined the framework for the regulation, exploitation, and management of green minerals to be formally integrated into Ghana’s overarching Mining Policy.

Cabinet’s approval included several key recommendations: that royalties on the exploitation of green minerals should exceed 5 percent; that the Minerals and Mining Act 703 be reviewed to empower the Minister to prohibit the export of green minerals in their raw state, thereby promoting value addition and ensuring retention of the value chain domestically; that Act 703 be amended to provide, in addition to the existing 10 percent free carried interest for the State, for mandatory Ghanaian participation of at least 30 percent, consistent with provisions in Acts 976 and 988; that the Minerals Income Investment Fund (MIIF) manage the State’s interest in accordance with its legislative mandate while facilitating broader Ghanaian participation; and that provisions be made for mandatory listing of green mineral companies on the Ghana Stock Exchange, among other measures.

The Cabinet’s approval of the Policy provided the foundation for the Government of Ghana to negotiate the terms and conditions of the Barari lease. Acting through the Ministry of Lands and Natural Resources, the Minerals Commission, and the MIIF, the Government reached an agreement with Barari DV Ghana Limited under mutually accepted terms. In a press statement issued on 20 October 2023, one day after the lease was signed, the Company affirmed that “in line with the Government of Ghana’s initiative to establish a new Green Minerals Policy, the terms of the Mining Lease were agreed upon by the Company and the Minerals Commission as being attractive to Ghana and to the Company’s shareholders.”

Details of the 2023 Lithium Lease Agreement (Ewoyaa Lithium Project Fiscal Regime)

• Royalty Rate – 10% on lithium and all associated minerals as against 5% for the mining sector as stated in Clause 20(a)of the Barari Mining Lease Document.
• Corporate Income Tax Rate– 35% (same for rest of mining sector and 32.5% for companies with Development Agreements);
• Freed Carried Interest – 13% against existing 10% for the rest of the mining sector Clause 19(b)
• An additional Government participation through the acquisition of shares. Thus, in addition to the 13% shares, the Government, through the Minerals Income Investment Fund (MIIF), will acquire an additional six percent (6%) shares in the mining company, and 3.06% shares in the holding company, which is listed on the Australian and London Stock Exchange. This will bring the Government’s interest in the company to nineteen percent (19%) in the local company, and 3.06% in the foreign holding company.
• Additionally, the Government and MIIF will have representations on the Board of both the local company and the foreign company to protect the Government’s interest.
• Setting up a Community Development Agreement Fund– 1% of Gross Revenue as stated in Schedule 2 of the lease agreement;
• Mining Lease period reduced from traditional 30 years to 15 years
• GET Fund (2.5%)-Clause 19(a).
• NHIL (2.5%)-Clause 19(a).
• Growth and Sustainability Levy (1.0%)-Clause 19(a).
• The company will list on the Ghana Stock Exchange, and its shares will be made available to Ghanaian entities and individuals, including SSNIT, pension funds and other highincome individuals.

Four (4) months from the grant of the Lease, the Company shall submit to the Commission a full study on the:

• use of Feldspar- (1(a) of Schedule 2).
• Establishment of a Chemical Plant (downstream conversion) to refine concentrate-(1(b) of Schedule 2).
• Where the company cannot establish a chemical plant, the company shall supply the concentrate to any chemical plant by another party’ (1(d) of Schedule 2)
• The company has an MOU signed with UMAT for feldspar to assess the production, market size, local use, etc.
• Use of the by-products can only be used in Ghana (Feldspar, Kaolin & Quartz)- (i(e, of Schedule 2) used for ceramics, glass, cosmetics, electronics & other industrial uses.
• It’s critical to note that construction & development shall take not less than 14 months, so various studies shall be ready before construction commences.
• In fact, UMAT had already submitted the scoping study for Feldspar and was assessing the market size for the products locally.

3.     A COMPARATIVE SUMMARY ON BENEFITS OF THE ATLANTIC/BARARAI LEASE AGAINST EXISTING MINING LEASES IN GHANA

• No Mining Leases exist currently in Ghana that are better than the above. In fact, it is the most attractive mining lease in the interest of Ghana, Post-State Gold Mining Days, and in the 4th Republic.
• An additional 3% was secured on the existing 10% free-carried interest, making 13%.
• The state has room to participate up to 30%, which was not the case.
• 1% of Gross Revenue as Community Development Fund to support the development of the communities. This is a master stroke never seen in any mining agreement in Ghana, and not too common in Africa.
• Mining Lease period reduced from the traditional up to 30 years, as stipulated by section 41 of Act 703, to 15 years for the Barari Lease. The shorter the lease period, the better it is for the Sovereign Country to renegotiate on renewal.
• Downstream processing facilities commitment bestowed on the Company; Value Addition taken care of in the lease.
• The development of by-products such as feldspar, which is used for ceramics and fibre glass, and other critical minerals such as silica. The deliberate development of such byproducts to support the development of related industries, which would be set up in the same catchment areas, will create jobs across the value chain in the catchment communities. This is unprecedented.
• Royalty rate increased from the traditional 5% to 10%.

Royalties are assessed on production output and remain independent of fluctuations in the global market price of the mineral. Importantly, royalties administered through the Minerals Income Investment Fund (MIIF) constitute a critical source of revenue for both the Fund and the Government, enabling reinvestment and the expansion of equity participation across the resource base and the broader lithium value chain, including the development of associated byproducts. The decision to increase royalty rates should therefore not be viewed merely as a negotiation outcome, but rather as a deliberate, long-term strategy aimed at fostering sectoral development and enhancing Ghana’s ownership stake in its green mineral resources.

4.     THE PROPOSAL TO REDUCE THE 10% ROYALTY RATE: ECONOMIC IRRATIONALITY AND POTENTIAL LOSSES FOR GHANA

The best international practices in mining investment dictate that royalty rates are not determined by short-term market fluctuations. Even in jurisdictions that apply sliding-scale royalty regimes, upper thresholds are established in anticipation of future commodity price increases. Consequently, claims that the recent decline in lithium prices justifies a reduction in Ghana’s royalty rate are untenable.

The definitive feasibility study of the Ewoyaa Project estimates an all-in sustaining cost (AISC) of approximately US$610 per tonne, based on a lithium spodumene concentrate (5.5–6% lithium oxide) price of US$1,587 per tonne. At this benchmark, the company achieves margins of roughly 62% per tonne before royalties. Moreover, even at current market prices of US$1,000–1,195 per tonne, as reported by Trading Economics in November 2025, the project remains profitable with margins exceeding 40% per tonne. Notably, in response to falling lithium prices in 2024, the Government of Zimbabwe introduced an additional 2% levy on gross lithium revenues, supplementing its existing 5% royalty. This underscores that temporary price declines do not compel sovereign governments to reduce royalty rates without sound economic justification.

Assuming lithium concentrate prices remain within the range of US$1,000–3,000 over the projected 12-year mine life, with annual production of 350,000 tonnes, Ghana would forfeit between US$210 million and US$630 million if royalties were reduced from 10% to 5%. Such losses represent revenue effectively ceded to the company, with no mechanism for recovery. Indeed, at prevailing and projected price levels, even a 30% royalty rate would not render the Ewoyaa Lithium Project unprofitable. It follows, therefore, that the current 10% royalty rate must be maintained as both economically rational and strategically necessary.

5.     WHY REDUCING THE 10% ROYALTY IS LEGALLY BASELESS

Section 25 of the Minerals and Mining Act, 2006 (Act 703), as amended by Act 900 of 2015, provides unequivocally that “a holder of a mining lease, restricted mining lease or small-scale mining lease shall, in respect of minerals obtained from its mining operations, pay royalty to the Republic at a rate and in the manner that may be prescribed.” Act 900 repealed Act 794 of 2010, which had fixed the royalty rate at 5 percent.

However, Section 6 of Act 900 stipulated that, notwithstanding the repeal, the royalty rate in force immediately before the commencement of Act 900 would remain applicable until formally altered. In line with established legal principles—particularly the non-retrospective application of mining laws—this savings clause was designed to protect companies and contracts executed under Act 794 or earlier regimes.

Accordingly, from 2015 onwards, royalty rates in Ghana ceased to be fixed by statute and were instead determined through regulation and contractual arrangements. It follows, therefore, that the previous government acted fully within the law and in the supreme interest of the Ghanaian people, as trustees of the nation’s natural resource endowment, by securing a 10 percent royalty rate. Any assertion that the previous government acted illegally and that such claims justify a reduction in the royalty rate is both misleading and unfounded.

6.     CONCLUSION

The foregoing analysis demonstrates clearly that the previous government acted appropriately in securing what remains Ghana’s most advantageous mining agreement to date. The fiscal terms of the Atlantic/Barari lease are comparable to regimes in leading lithium-producing countries such as Chile, Argentina, Australia, and Zimbabwe, thereby aligning Ghana with international best practice.

Assertions by the current government regarding lithium pricing and the legality of the lease are not only misleading but also raise serious concerns that should engage the attention of citizens and anti-corruption agencies. Should the proposed reduction of the royalty rate from 10 percent to 5 percent be implemented, Ghana stands to forfeit millions of dollars in revenue. Such an outcome would exemplify a corruption-tainted mineral agreement frequently cited in natural resource governance discourse. Moreover, lowering the royalty rate confers legal standing on the company that could complicate future upward adjustments, potentially triggering arbitration under international investment treaties.

It is therefore imperative that Parliament either ratifies the original lease secured under the NPP government or ensures that any revisions strengthen Ghana’s position. Temporary fluctuations in commodity prices must not serve as justification for weakening fiscal terms. It is particularly troubling that state institutions appear to be advancing public relations narratives favourable to a mining company rather than safeguarding the national interest.

7.     RECOMMENDATIONS

• The Government should promptly submit the Mining Lease and associated terms granted in October 2023 to Parliament for ratification. Expedited ratification will facilitate the commencement of operations, thereby enhancing employment opportunities and stimulating the local economies of affected communities.
• The 10 % royalty rate must be preserved without further reduction. Any downward adjustment would constitute a serious fiscal and governance lapse, potentially amounting to a scandal.
• A thorough review of the value-addition provisions—particularly the establishment of a refinery—should be undertaken to assess feasibility for the Company or any third party, contingent upon the availability of sufficient mineral reserves

APPENDIX A. MAJOR LITHIUM PRODUCING COUNTRIES COMPARISONS ON THE LEASE DETAILS WHICH SHOWS THE 2023 MINING LEASE WAS NEGOTIATED STRONGLY

 INDICATORS

VERDICT

On the global scale, Ghana’s 10% royalty is highly competitive, and its lithium agreement details a top notch for Ghana’s benefit as compared to other countries.

Dr. George Domfe

President of APL and a Development Economist at the University of Ghana

+233240920170

Dr. Hayford Ayerakwa

Director of Research and a Lecturer at the University of Ghana

+23324313582

Ing. Wisdom Gomashie

Fellow at APL

+233542026225