Ing. Kenneth Ashigbey, CEO of the Ghana Chamber of Mines, has admonished the government to decouple the legislative discussions surrounding lithium royalties from those of the gold sector.
This call comes at a critical juncture as the Ewoyaa Lithium Project faces significant delays, potentially impacting both the people of Ewoyaa and the stakeholders of Atlantic Lithium.
According to Ing. Ashigbey, the fundamental differences between the nascent lithium industry and the long-established gold mining sector necessitate a tailored approach to avoid jeopardizing existing investments.
“After all, there are two different minerals. There is also the fact that lithium, it is now that we are going to start it. When it comes to gold, there are mining firms that have been here forever.”
Ing. Kenneth Ashigbey
Expanding on the necessity of this separation, Ken. Ashigbey highlighted that while lithium is a “new” mineral class for Ghana, the gold industry is backed by firms that have operated within the country for generations.
These established entities have already secured investment agreements based on current fiscal terms; however, a proposed 6% increase in royalties representing a more than 100% hike over current payments threatens the viability of these operations.
Firms like Azuma Resources are currently in the market seeking capital, and such a drastic shift in the fiscal regime could deter investors and lead to unintended economic consequences that the government did not envision.
Perils of Fiscal Overlap and the Need for Dialogue
The Chamber’s concerns are rooted in the historical impact of previous legislation, such as Act 703, which transformed the industry’s profitability landscape.
Ken Ashigbey warned that “when you do this change at this particular point,” particularly adding a 6% royalty burden, you risk undermining the sustainability of existing mines.
He emphasized that the conversation must now shift to Parliament, where a “stakeholder engagement” involving all interested parties including economists and technical experts, must be conducted to ensure that “emotion” is removed from the decision-making process.
The goal is to maintain Ghana’s status as an “attractive place” for both external and internal investment, especially for Ghanaians currently building their own mines.
Lessons and Risk of Revenue Shortfalls
Drawing a parallel to his previous experience as the Chief Executive of the Telecom Chamber, Ing. Ashigbey recalled the advocacy against the E-levy.
Despite pointing out the challenges, the government proceeded, only for the projected “revenue not to come,” eventually forcing mid-stream changes.
He urged a “halt, especially when it comes to gold,” which remains Ghana’s leading export commodity, to prevent a similar outcome.
He noted that the “impact of it would be felt by all of us” if the legislation is not handled with precision.
A collaborative approach is essential to ensure the “good intentions of the President and the Minister” actually come to fruition by considering the needs of landowners, communities, workers, and shareholders.
Ensuring a Distinctive Approach for Gold and Lithium
According to Ken Ashigbey, data in the extractive landscape reveals that gold and lithium operate on vastly different market dynamics. Gold royalties are the “leading exporter” anchor for the Ghanaian economy, but the sector is highly sensitive to “effective tax rates” that already capture a significant portion of profits.
Conversely, the lithium sector, exemplified by the Ewoyaa project, requires a “sliding-scale” or market-linked framework to manage the extreme volatility of green minerals.
By separating the two, Ghana can fast-track the Atlantic Lithium lease to “avoid economic losses” and job stagnation in Mankessim without imposing a “debilitating impact” on gold producers like Azuma Resources.
This distinctive approach ensures that the “fiscal benefits” and “jobs we should have created” are secured through a stable, predictable environment that honors existing contracts while pioneering new frontiers in the green energy transition.
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