The Ghana Chamber of Mines has urged circumspection in the discourse on the Ghana’s Lithium deal.
According to the Chamber, the varied views from stakeholders should enhance the outcomes of the project without hurting the country’s ability to attract requisite private capital to develop mineral endowments responsibly.
The Chamber finds it unfortunate that some commentators have inaccurately portrayed the mining sector as shortchanging the country in terms of the distribution of mineral rents,” it stated in a press release copied to Business Week Ghana.
According to the Chamber, apart from the significant value that the sector retained in-country through employment and purchases from local suppliers, a plethora of studies has shown that a more than proportionate share of mineral rents accrues to the government.
It added that, a model by the Natural Resource Governance Institute (NRGI) suggests that the government’s share of mining rents is “just over 50%” which “falls comfortably within the 40% to 60%” profit-sharing ratio recommended by the International Monetary Fund (IMF) for mining countries.
The Chamber was of the view that the current arrangement where some fiscal inflows from the mining sector are commingled with other taxes in the Consolidated Fund impedes the visibility of the developmental impact of the mining sector.
Background
Ghana’s government recently approved its first lithium mine run by a subsidiary of Australia-based Atlantic Lithium Limited.
The Ministry of Lands and Natural Resources granted Barari DV Ghana Limited a 15-year lease on the mine at Ewoyaa, on Ghana’s southern coast, where the company began exploring for lithium six years ago.
The prospect is highly valued by Ghana as it seeks to play a role in producing a key ingredient in electric vehicle batteries, demand for which is soaring as countries look to phase out fossil-fuel cars.
As part of the deal, Ghana has increased the royalty rate to 10% from the standard 5% and the state’s interest in the project to 13% from 10%, the ministry said in a statement.
The company will also work on developing a lithium processing plant to maximise the economic benefit of a mineral it has often shipped to China for processing, the ministry added.