Home » Lithium Deal Sparks Controversy in Ghana

Lithium Deal Sparks Controversy in Ghana

The government defends its agreement with a foreign company to exploit the country's lithium reserves

by Victor Adetimilehin

Ghana is home to one of the largest lithium deposits in Africa, a mineral that is in high demand for the production of batteries, electric vehicles, and renewable energy. However, the government’s decision to lease part of the lithium-rich area to a foreign company has sparked controversy and criticism from various stakeholders.

The agreement, signed in November 2023, grants Barari DV Ghana Ltd, a subsidiary of Atlantic Lithium Limited, the right to explore and mine lithium in the Egyasimanku Hill Forest Reserve in the Ashanti Region for 15 years. 

The company will pay a royalty of 13% to the government, as well as 35% corporate income tax and 1% of its revenues to a community development fund. The government will also have a 19% free carried interest in the company, with an option to increase it to 30%.

The Ministry of Lands and Natural Resources says the deal is in the best interest of the country and will bring economic and social benefits to the local communities and the nation as a whole. The minister, Samuel Abu Jinapor, says the agreement was reached after a thorough consultation and due diligence process, and that it complies with the legal and environmental requirements.

However, some civil society organizations, opposition parties, and environmental activists have raised concerns about the transparency, fairness, and sustainability of the deal. They argue that the government did not conduct a proper valuation of the lithium reserves, nor did it consult the affected communities and traditional authorities. 

According to a report by Ghana Web, they also claim that the deal violates the country’s mining and forest laws and that it poses a threat to the biodiversity and ecosystem of the forest reserve.

Some critics have also questioned the ownership and credibility of Barari DV Ghana Ltd, alleging that it is a shell company with links to some government officials. They have called for a full disclosure of the beneficial owners of the company and the terms of the agreement. They have also demanded that the agreement be reviewed by Parliament and ratified before it becomes effective.

The controversy over the lithium deal reflects the broader challenges and opportunities that Ghana faces as it seeks to leverage its natural resources for development. The country is already a major producer of gold, cocoa, and oil, but it also struggles with issues of governance, accountability, and environmental protection. 

As the demand for green minerals grows in the global market, Ghana has to balance its economic interests with its social and environmental responsibilities.

The government says it is committed to developing a policy framework for the exploitation of its green minerals, such as lithium, cobalt, and manganese, in line with the best international standards and practices. It also says it is open to dialogue and engagement with all stakeholders to ensure that the lithium deal and other similar agreements are beneficial and acceptable to all parties.

The lithium deal is a milestone for Ghana’s mining sector, but it also poses a test for its democracy and development. How the government and the company handle the deal will have implications for the country’s reputation, stability, and future.

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