Ghana’s Lithium Deal Best Ever
– Says Mireku Duker
By Gifty Arthur
A Deputy Minister of Lands and Natural Resources, George Mireku Duker, has insisted that Ghana’s lithium agreement with Barari DV Ghana Limited, a subsidiary of the Australia-based Atlantic Lithium Limited, is the best ever mining agreement signed for the country.
The mineral resource has been found in Ewoyaa, a community in the Mfantseman municipality in the Central Region.
According to the deputy minister in-charge of mining, the agreement is far better than those reached in Zimbabwe, Mali, Argentina and Chile, where the important mineral resource is mined in large quantities.
“As I speak, the best ever signed agreement for Ghana, since its creation, is the lithium agreement by the Ministry of Natural Resources. The best ever. I am saying that Ghana, this is not the first time we are mining. We have mined gold more than 100 years but the agreements we signed, I am saying that, this is the best.
“And we have compared it with developed countries that have mined lithium for a long time and we are saying that ours stand tall,” Mr. Duker said on Accra-based United Television (UTV’s) ‘Mpu ne mpu’ programme on Friday, November 24.
The Tarkwa Nsuaem constituency Member of Parliament (MP) noted that, Ghana took lessons from previous mining agreements, like gold, bauxite and manganese, which many complained that Ghanaians were short-changed, to raise the bar.
He said the agreement did not only ensure that Ghana’s mining Act 708, which directs for a standard 5 percent in royalty rate, but ensure that it raised it to 10 percent.
He noted that this is the biggest, compared to other lithium mining countries across the world.
The deputy minister provided the existing royalty agreements for Zimbabwe, which is the largest producer of the mineral on the continent, Mali the third in Africa, Chile and Argentina pegged at 5, 3-6, 8 and 3 respectively.
According to him, the state’s free carried interest (shares) in the mining operation has been lifted from the previous 10 to 13 percent.
In the past, this was not the case in other agreements, he pointed out, stressing that since the Fourth Republic, the furthest Ghana has gone was 10 percent.
“If you look at all the mining agreements in Ghana, the highest we have gone is 10 percent. From Rawlings’ time, all the way to this time, any agreement with respect to concession or any mining agreement with all the companies or all the conglomerates, it has always been 10.
“As we speak, the free carried interest that used to be 10 percent we have increased it to 13 percent. If you go to Zimbabwe, it is zero, if go to Chile, it is zero. Anybody should challenge me with contracts of Chile, Argentina Mali or Zimbabwe that has free carried interest that are higher than Ghana’s stake.”
“Additionally, government through the Minerals Income Investment Fund (MIIF) will also acquire additional 6 percent in the mining operation and also a 3. 06 percent in the company’s mother firm, Atlantic Lithium Limited, known to be listed on the Australian and London Stock Exchanges.
“This is unprecedented. It hasn’t happened in any agreement before as far as this country is concerned. That, the company that is coming to work here, its mother company from elsewhere, we [Ghana] say we want to be part of that company. So, if they get another lithium contract anywhere, we have shares,” the deputy minister said.
He added, “Looking at all of these countries, our deal is the best. It is the best. Because they say the one that comes last in such agreements benefits most because they are able to correct mistakes of the past and improve upon it.”
Deputy Minister Duker said all the percentages put together coupled with corporate tax of 35 percent is about 50 percent.
He dispelled claim that other lithium rich countries have better deals when it comes to corporate tax, and quoted Zimbabwe, Chile, Mali and Argentina in that aspect as 15-24, 27, 30 and 35 respectively.
He also debunked claim that the deal has a life span of 35 years, stressing that the agreement will last for 15 years and not 35 years as some have sought to put it.
There is also a 1percent corporate social responsibility funds allocated to the communities where the mineral would be mined for their development.
Meanwhile, the president of University Teacher Association of Ghana (UTAG), Prof. Ransford Gyampoh, who hails from the Mfantseman district has expressed disquiet about the 1percent allocated to the community for development.
He publicly stated on TV3’s Key Point programme last Saturday November 25 that he had reason to even call the municipal chief executive to complain about it, but he was assured by the MCE that the 1 percent is in order.
On local content, the deputy minister said a critical attention was paid to that area and the company is required to make a deliberate effort to employ largely Ghanaians.
He said this is not going to be only at the lower level but managerial level. He disclosed that about 95 percent of the people managing the firm are Ghanaians, adding that, recently, a Ghanaian was appointed at the top management level.
Barari DV Ghana Limited is required to list on the Ghana Stock Exchange (GSE) for Ghanaians to purchase shares, a move which is not done by many mining companies.
Again, the lithium mined will not be allowed to be exported in its raw state, and also all by-products from their operation will be sold locally. On value addition, Barari DV Ghana Limited has committed to complete a feasibility study for the establishment of a chemical plant within four months of signing the lease.