Ghana’s historic first lithium mining agreement, signed in October 2023, faces increasing uncertainty as parliamentary consensus on its ratification falters.
The delay in approving the deal has sparked concerns among resource experts, who warn of potential economic losses, weakened investor confidence, and deferred local development benefits if the impasse continues.
Eliasu Ali, Policy Lead for Minerals and Mining Policy at the Africa Centre for Energy Policy (ACEP), emphasized the need for Parliament to strike a balance between rigorous oversight and timely decision-making.
“What matters is ensuring material scrutiny that justifies this delay, if any, on the part of Parliament. Ghana must look to optimize economic benefits from the lithium agreement in the short term while advancing value addition in the medium to long term.”
Eliasu Ali, Policy Lead for Minerals and Mining Policy at ACEP
According to Mr. Ali, delays in ratifying the agreement could have significant economic implications. Citing a study by ACEP, he explained that a 10 percent change in global lithium prices could result in a 27 percent shift in government revenue from the project.
In contrast, changes in other fiscal variables—such as royalty rates, carried interest rates, or corporate income tax (CIT) rates—would have a far smaller impact, ranging from one to five percent.
This revenue sensitivity, coupled with the high volatility of lithium prices, adds urgency to the situation. Global lithium prices have experienced a consistent decline, dropping significantly from December 2022 to December 2023.
Furthermore, the feasibility study by Atlantic Lithium, the project’s proponent, projects that spodumene (a key lithium-bearing mineral) prices will fall from $3,000 per tonne in 2025 to a stabilized range of $1,500 per tonne between 2031 and 2036.
“Delays in the project could result in missed revenue opportunities, especially as the global market adjusts to these falling prices,” Mr. Ali warned.
Economic Linkages Postponed
The all-in sustaining cost of the project—approximately 45 percent of total revenues—presents significant procurement opportunities for local businesses, according to ACEP’s analysis.
These opportunities, which could stimulate local economies and create jobs, are now delayed as parliamentary approval remains pending.
Denis Gyeyir, Africa Senior Programme Officer at the Natural Resource Governance Institute (NRGI), corroborated these concerns.
He warned that further delays, combined with the ongoing decline in lithium prices, could dampen investor enthusiasm for Ghana’s lithium ventures.
“Any further delays in ratifying the agreement, coupled with ongoing price declines, could dampen investor appetite—not just for this project but also for other lithium ventures in the Ewoyaa enclave.”
Denis Gyeyir, Africa Senior Programme Officer at NRGI
Mr. Gyeyir highlighted that the fiscal regime for the Ewoyaa project places significant emphasis on profitability, with up to 70 percent of government revenues hinging on the project’s financial success.
He cautioned that falling lithium prices could substantially reduce expected revenue flows to the state.
With Parliament resuming sessions in December 2024 and scheduled to adjourn in January 2025, concerns are mounting that the lithium agreement might not be ratified within this period. A failure to do so could reset the negotiation process entirely, further delaying progress.
Mr. Gyeyir also noted the social and livelihood impacts of these delays. Chiefs and local residents in the Ewoyaa mining area have reported difficulties undertaking farming and other economic activities, as the land has been designated for mining.
Despite these concerns, resource experts believe that Ghana’s position in the global lithium market remains relatively secure. “Ghana is not a big player in the global lithium market and so cannot significantly influence the market, whether by way of price or demand,” Mr. Gyeyir said.
However, he urged the government to remain cognizant of shifting global dynamics. Investment in Research and Development (R&D) for alternative materials to lithium-ion batteries has increased in recent years, driven by countries like the United States, China, and members of the European Union.
While some argue that the delay in ratifying the agreement reflects due diligence on Parliament’s part, others view it as a missed opportunity.
The agreement has been hailed as a landmark deal that could position Ghana as a key player in the global supply chain for critical minerals. However, time is of the essence, particularly as global competition for lithium projects intensifies.
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