The Minerals Commission has denied reports that the lands ministry has approved the contract on Ewoyaa Lithium project to Piedmont Lithium.

According to the Commission, its attention has been drawn to a news release by Piedmont Lithium in respect of the company’s acquisition of a stake in the Ewoyaa Lithium Project in Ghana. However, the Commission insisted that there hasn’t been any form of approval of contract to the said party.

“In this regard, negotiations are ongoing with Atlantic Lithium Limited on the development of Ewoyaa Lithium deposits in the Mfantseman municipality of the Central region. Consequently, the minister of lands and natural resources has not approved any contract, transaction, deal or stake for any person, company or entity in respect of the Ewoyaa Lithium Project.”
Minerals Commission

Contained in a statement signed by the CEO of the Minerals Commission, Martin Kwaku Ayisi, the Commission recounted that Cabinet on July 27, 2023, approved a new policy framework for the exploitation, management and regulation of lithium and other green minerals in Ghana. It explained that the overarching goal of the new framework is anchored on the principle that the exploitation of green minerals including lithium must benefit Ghanaians who are the true owners of the mineral resources.

In light of this, he stated that the claim by the Piedmont Lithium remains doubtful.

Minerals Commission mandated to make recommendations

Justifying its stance, the Commission noted that it is by law mandated to make recommendations to the minister for the grant of mineral rights including a mining lease. To this, the Commission higlighted that it has not made any such recommendation for the grant of a mining lease to the minister for the development of the lithium deposit at Ewoyaa.

“At this stage, Atlantic Lithium Limited still holds a prospecting license in the name of its local subsidiary Barari Development Ghana Limited. The Commission wishes to remind the media and public of the commitment of the government to ensure that the country reaps optimum benefits from the exploitation of lithium and other green minerals.”
Minerals Commission

It will be recalled that mining company, Piedmont Lithium, revealed that it will provide funding for the Ewoyaa lithium project in Ghana, in exchange for a 22.5% stake. As part of its agreement with project owner Atlantic Lithium, Piedmont Lithium is exercising its option to acquire a 50% stake in the project as per its contract with Atlantic back in July 2021.

Piedmont stated that it will provide a further $70 million toward Ewoyaa development in the third and final stage to acquire an additional 27.5% interest in the project. The remaining development costs will be shared equally with Atlantic, for a total commitment by Piedmont of approximately $128 million.

The company expects that it will be able to fund the project through the sale of lithium concentrate from an offtake deal with North American Lithium.

Piedmont’s President and CEO, Keith Phillips stated that: “We are pleased to help advance the progression of Ewoyaa as a key part of Piedmont Lithium’s global portfolio and the expected feedstock for our planned lithium hydroxide conversion facility in Tennessee”.

Mr Phillips further noted that Piedmonts partners at Atlantic Lithium have made tremendous progress with positive project economics recently published in a definitive feasibility study and minerals lease discussions that are progressing with Ghana’s Minerals Commission.

A feasibility study published in June projected Ewoyaa’s total capital cost at $185 million. Once completed, it would be Ghana’s first lithium mine operation, producing 3.6 million tonnes of spodumene concentrate over a 12-year life. First production is targeted for 2025.

The study also showed that Ewoyaa has a post-tax net present value (at 8% discount) of $1.5 billion, with free cash flow of $2.4 billion from life of mine revenues of $6.6 billion and an internal rate of return of 105%. This would give the project a payback period of 19 months.