Ghana’s Lithium Gambit: Seize the Crystal or Sell the Future?

 

I write to commend the recent decision to withdraw the revised 2025 Mining Lease Agreement for the Ewoyaa Lithium Project from parliamentary ratification.This move, announced on December 10, 2025, reflects a prudent response to widespread stakeholder concerns and public scrutiny, allowing for essential consultations. It positions Ghana to avoid repeating the historical pitfalls of its extractive sector—such as undervalued deals in gold mining that have yielded minimal long-term benefits despite decades of production. Lithium, as a critical "green mineral" fueling the global energy transition, represents a strategic opportunity for Ghana to capture greater value, foster industrial development, and ensure equitable resource governance. However, rushing into suboptimal terms risks entrenching foreign dominance in the value chain, environmental degradation, and fiscal losses amid volatile markets. My advice is candid and evidence-based: Prioritize national sovereignty, transparency, and sustainability over short-term investor pressures. The current agreement's flaws—particularly the royalty reduction from 10% in the 2023 draft to a statutory 5%, illusory commitments to value addition, and unfeasible infrastructure proposals—undermine Ghana's interests. Drawing from global best practices in lithium-rich developing countries like Chile, Zimbabwe, and those in the Lithium Triangle (Argentina, Bolivia, Chile), Here is a clear path forward to renegotiate and reform.

1. Immediate Assessment: Recognize and Address Core Flaws in the 2025 Agreement. The withdrawal validates critiques from think tanks like IMANI Africa, which highlight how the agreement dilutes fiscal terms and misrepresents legal barriers. Economically, the project remains viable even at current spodumene concentrate prices (around US$1,170–1,295 per ton, CIF China), with All-In Sustaining Costs (AISC) at US$610 per ton and C1 cash costs at US$377 per ton. At these levels, margins exceed 39% pre-royalty, making a 5% rate an unnecessary concession that could forfeit US$21 million annually in the initial production phase (based on 350,000 tons/year output). Claims of unviability due to price dips are overstated; sensitivity analyses show profitability down to US$800 per ton, with forecasts predicting stabilization above US$1,000 by 2026. Legally, ambiguities in Clause 20a ("prescribed by law or agreed") default to the outdated 5% flat rate under Acts 703 and 794, ignoring the flexibility in Act 900 (2015) for ministerial prescription of rates via Legislative Instruments. The Constitution's Article 268 grants Parliament authority to ratify terms that override statutes, as affirmed in Supreme Court precedents like Attorney General v. Balkan Energy. There is no insurmountable "legal barrier" to higher royalties—only administrative inertia. Value addition commitments are equally problematic: Shifting from a mandatory chemical plant in the 2023 draft to "best efforts" with scoping studies allows evasion, potentially limiting Ghana to raw exports worth ~US$1,000 per ton while refined products (e.g., lithium hydroxide) fetch US$15,000–20,000 per ton. The proposed Saltpond jetty is technically impractical due to high-energy coastlines, dredging challenges, and environmental risks to local fisheries, likely inflating costs beyond trucking to Takoradi port. Candid Note: These changes appear driven by investor lobbying rather than Ghana's interests. Approving them would lock in a 15-year regime that repeats the "gold curse"—minimal local benefits amid global booms.

2. Fiscal and Economic Reforms: Adopt Sliding-Scale Royalties and Independent Modeling. To maximize revenue capture, reject fixed royalties and implement a sliding-scale model tied to lithium prices, as practiced in Chile (6.8%–40% on lithium carbonate equivalent, capturing up to 46.5% effective take during booms). Start with a 10% baseline (as in the 2023 draft), escalating to 20% above US$2,500 per ton and dropping supportively below thresholds (e.g., tax holidays at sub-US$800). This protects against volatility while ensuring Ghana benefits from upside scenarios, per UNCTAD recommendations for lithium-rich developing nations. Mandate independent financial modeling jointly with stakeholders, incorporating investor data from the Definitive Feasibility Study (DFS), price forecasts (e.g., Goldman Sachs/Fast markets), and community benefits. Avoid reliance on investor narratives; engage neutral experts from institutions like the African Development Bank or OECD for audits. Additionally, introduce a 1% community development fund managed by an independent trust with majority local representation, drawing from Zimbabwe's model of local joint ventures and export bans on raw lithium to enforce beneficiation.

3. Value Addition and Industrialization: Enforce Binding Commitments Ghana must control more of the lithium value chain to avoid becoming a raw exporter like many African nations in the critical minerals rush. Replace vague scoping studies with binding definitive feasibility studies for domestic refining, completed within the first year of the lease and involving Ghanaian academia, civil society, and experts. Impose performance bonds or escalating export taxes on unrefined concentrate to incentivize investment in processing facilities. Revive and enforce the 2023 Green Minerals Policy, which bans raw exports, aligning with global trends toward circular economies where mining integrates recycling and higher-value products.Explore state equity options (e.g., 20–30% carried interest) or public-private partnerships, as in Chile's state-led models, to build local capacity in battery-grade production. Leverage by-products like feldspar (36.8 million tonnes at 41.9%) for diversified revenue, but prioritize lithium's strategic value.

4. Environmental, Social, and Infrastructure Safeguards: Prioritize Sustainability Adopt international best practices for responsible lithium mining, including the Global Industry Standard on Tailings Management and rigorous water stewardship—critical in arid or coastal areas like Ewoyaa. Conduct independent environmental impact assessments with community input, focusing on water use, biodiversity, and tailings dams. For the Saltpond jetty, commission a third-party technical audit to evaluate feasibility and alternatives, avoiding politically motivated "gimmicks" that could delay the project. Strengthen social license through transparent revenue sharing and job creation mandates, per OECD guidelines for limiting externalities in emerging economies. Establish an international monitoring platform for mining activities to ensure compliance, especially given lower standards in some developing regions.

5. Negotiation and Governance Strategy: Professionalize and Engage Broadly Professionalize your negotiation team with training in advanced skills, as emphasized in recent African policy briefs—essential for countering sophisticated investors. Involve non-partisan experts, civil society (e.g., IMANI), and international advisors to balance power dynamics. Develop a dedicated "Green Minerals Framework" under Act 900, differentiating lithium from traditional minerals like gold due to its geopolitical importance and price swings. Candid Warning: Political footballing, as seen in recent debates, erodes investor confidence but also highlights the need for depoliticized processes. Avoid concessions that favor short-term optics over long-term gains; Ghana's Ewoyaa deposit (35.3 million tonnes at 1.25% Li₂O) could generate over US$172 billion in value if managed wisely.6. Recommended Way Forward: Actionable StepsShort-Term (Next 30–60 Days): Hold inclusive stakeholder consultations, including Parliament's Lands Committee, communities, experts, and investors. Use this to draft revised terms incorporating sliding royalties and binding value addition. Medium-Term (3–6 Months): Renegotiate the lease explicitly in the text (not deferred to law), conduct independent audits, and ratify under Article 268 with enhanced oversight. Long-Term: Enact Legislative Instruments for flexible royalties, operationalize the Green Minerals Policy, and position Ghana as a hub for sustainable lithium processing in Africa, attracting ethical investors via US-Africa partnerships. Monitoring: Establish a multi-stakeholder oversight body to track implementation and adjust for market changes. 

By pursuing this path, Ghana can transform lithium into a catalyst for sustainable development, avoiding the regrets of past resource deals. I am available for further consultations to support this process.

Yours truly.