GhArticles.com Every News in Detail
Reports coming in indicate that Ghana has officially granted a mining permit for lithium exploration to Atlantic Lithium Ltd., marking a pivotal moment in the country’s venture into the thriving global lithium industry.
The 15-year concession, now awarded to Barari DV Ghana Ltd., a subsidiary of the Australian company Atlantic Lithium Ltd., gives them the green light to commence the construction of a sprawling lithium mine covering a 42.6-square-kilometer area in Ewoyaa, Ghana’s Central Region, according to an official statement by the Ministry of Lands and Natural Resources.
This decision comes after almost six years of meticulous exploration, confirming the presence of lithium in substantial commercial quantities. The global demand for lithium has attracted not only major mining firms but also automakers and oil giants as the world transitions from fossil fuels to electric vehicles. The anticipation of a projected lithium shortage by 2025 has heightened the search for new sources.
Half of the lithium extracted from Ewoyaa will be destined for a North Carolina-based refining facility, owned by Piedmont Lithium Ltd., the second-largest shareholder in Atlantic Lithium Ltd. Piedmont Lithium Ltd. has also pledged the majority of funds for the mine’s development. Atlantic Lithium aims to produce an annual average of 300,000 tons of spodumene concentrate over a 12-year period, positioning it as the world’s 10th largest lithium project.
Samuel Jinapor, the Minister of Lands and Natural Resources, emphasized the unique treatment of lithium in this instance, stating, “Government took a decision not to treat this mineral the same way other minerals have been treated,” highlighting the non-standard nature of this mining lease.
The fiscal arrangement between Atlantic Lithium and Ghana involves a 10% royalty rate and a 13% free carried interest retained by the state, in contrast to the existing 5% and 10% figures for other minerals. Additionally, the company is committed to contributing 1% of its revenue to a community development fund.
Samuel Jinapor also revealed that Ghana’s sovereign wealth fund, the Minerals Income Investment Fund, is set to invest in acquiring a 6% stake in Atlantic Lithium’s Ghana portfolio and a 3.06% share in Atlantic Lithium itself. Furthermore, the company will be mandated to list on the Ghana Stock Exchange, solidifying its commitment to local economic growth and development.
Lithium, a key component in lithium-ion batteries, plays a crucial role in the global transition away from fossil fuels, as the world grapples with climate change. Emissions from fossil fuels have been identified as a major contributor to the climate crisis. This has led to the promotion of a green energy transition to reduce and eventually eliminate carbon emissions.
To address this, some countries have implemented laws to phase out vehicles that use fossil fuels, creating a growing market for the battery industry and minerals required for battery production, known as green minerals or critical minerals. Currently, African countries that mine lithium export the mineral in its raw state.
Barari Ltd. initiated exploration for lithium in Ghana in 2017 and discovered high-grade lithium in commercial quantities in Ewoyaa. Geological investigations also revealed deposits in various parts of the country, predominantly around Cape Coast, Kumasi, Sunyani, Bole, and Wa. However, the country is yet to commence mining this valuable mineral.
Speaking at the ceremony to sign the Mining Lease for Barari DV Ltd., Minister Samuel A. Jinapor emphasized that the government had decided not to treat lithium the same way as other minerals, necessitating a special policy for its exploitation and management. After consultations and Cabinet approval, a policy for the exploitation and management of green minerals, including lithium, was established, and the Mining Lease granted to the company is based on this policy.
Ghana’s foray into lithium mining signifies a promising future for the country’s participation in the green energy revolution and the development of a sustainable lithium supply chain in a world rapidly shifting toward electric vehicles and renewable energy sources.
