The National Democratic Congress has admonished Parliament not to approve the lithium mining lease agreement executed between the Government of Ghana and Barari DV Ghana Limited for the exploitation of Lithium and other associated minerals in the Ewoyaa community of the Mfantseman Municipality.
The National Communications Officer of the opposition National Democratic Congress, Lawyer Sammy Gyamfi in a statement argued that there are pertinent issues regarding the Mining Lease Agreement executed between the Government of Ghana and Barari DV Ghana Limited that ought to be addressed before its approval by Parliament.
According to Mr Gyamfi, it is an indisputable fact, that mining over the years has not benefited Ghana as a nation, hence, there is a need for an urgent review of the country’s existing mining laws and policies, particularly concerning green minerals.
“The National Democratic Congress (NDC) has keenly followed public discussions on the controversial Mining Lease Agreement executed between the Government of Ghana and Barari DV Ghana Limited, for the exploitation of Lithium and other associated minerals in the Ewoyaa community of the Mfantseman Municipality of Ghana. After meticulous scrutiny of the terms of the Mining Lease Agreement, the NDC has concluded that the Ghana-Barari Lithium agreement is not in the best interest of Ghana”.
Sammy Gyamfi Esq.
Mr Sammy Gyamfi further emphasized that that the green minerals of the country, should not be exploited based on the existing mining laws and policies of the country which are predominantly tailored for gold mining and have not benefited the nation over the years.
He noted that a future National Democratic Congress government under Former President John Dramani Mahama would review the laws that govern the extractive industry in the country to maximize the country’s share and local participation in the exploitation of its natural resources.
“We are of the firm opinion, that it is about time the existing colonial model of mining lease concession agreements, was reviewed. New models for the exploitation of our mineral resources such as Joint Ventures and Service Agreements, that provide for equitable benefit sharing, enhanced local participation and value addition, should be considered as part of the review of the laws and policies governing our extractive sector.
“Our beloved country urgently needs a reviewed mining regime, that provides for the sustainable funding and strengthening of the Ghana Geological Survey Authority, to engage in reconnaissance and prospecting, particularly about green minerals. We believe that this if supported by the Minerals Income and Investment Fund (MIIF) under the right policy framework, will enhance the bargaining power of the state in the exploitation of our mineral resources”.
Sammy Gyamfi Esq.
NDC Accuses Government Of Inadequate Stakeholders Engagement
Furthermore, Mr Gyamfi lamented over the government particularly the Ministry of Lands and Natural Resources failure to engage all stakeholders within the extractive sector before the enactment of the lithium mining lease agreement.
He alleged that there has been very little engagement by the government with the affected local communities and key stakeholders in the processes leading to the execution of the ‘controversial’ lithium deal.
According to Mr Gyamfi, it is the considered view of the National Democratic Congress that all stakeholders in the extractive sector must have a say in the kind of law and model, under which the country’s lithium and other green minerals should be exploited for the maximum benefit of the State and its citizens.
Moreover, Mr Gyamfi expressed doubt about the requirement in the lithium mining lease agreement executed between the Government of Ghana and Barari DV Ghana Limited for the establishment of a chemical plant to process the lithium locally.
He alleged that under Schedule Two (2) of the lease agreement, the establishment of a local chemical plant by Barari DV Ghana Limited is not mandatory, but rather contingent on the conduct of a scoping study to determine the economic viability of the processing of lithium in the country.
“Even more worrying, is the fact that paragraphs 1(b)(c) and (d) of schedule two (2) of the lease agreement, envisage the inability of the company (Barari DV) to meet this requirement. This makes nonsense of the claim by the government that no raw lithium will be exported from Ghana under the agreement”.
Sammy Gyamfi Esq.
Again, Mr Gyamfi indicated that there are no specific provisions in the mining lease that emphasize Ghana’s control over the lithium mining value chain and the benefits thereof.
He argued that in the extractive sector, the ability of a country to optimize gains from the value chain is the surest way of domesticating its benefits.
According to Mr Gyamfi, the National Democratic Congress wants a deal that provides a clear and ‘unambiguous’ strategy for maximizing the benefits of lithium mining through a ‘value chain’ participation.
He thus argued that there is therefore the need for mandatory requirements for the local processing of the ‘raw’ lithium before it is exported out of the country as well as a ‘100% off-taker’ for the by-products including Feldspar, Silica, and Kaolin for local industries and manufacturing companies in the country.
On the claim by the government, that Barari DV will be paying a corporate tax of 35% under the deal, Mr Gyamfi urged the government to clarify the status of the company and provide the full facts relative to concessions that have been granted to the company.
He argued that while the Mining Lease expressly provides that, Barari DV shall pay taxes by the mining laws of Ghana, there are also claims that the Company is registered under the Ghana Free Zones Authority and is entitled to a 10-year tax holiday when such tax concessions are ordinarily not granted to mining companies in the country.
According to Mr Gyamfi, such an instance will deprive the country of corporate taxes during the first ten years of the ‘Royal Lithium’ project which ultimately will limit Ghana’s share to the paltry 10% royalty and marginal benefits from its 13% carried interest and the 6% equity held by the Minerals Income Investment Fund (MIIF).
“It is therefore imperative, for government to clarify the status and tax obligation of Barari DV and its parent company. Ghanaians deserve to know whether or not the company is a free zone company and why a mining company should be accorded free zone status. Ghanaians deserve to know all the concessions government is giving the company (Barari DV/Atlantic Lithium) for a holistic assessment of the benefits of the deal”.
Sammy Gyamfi Esq.
Mr Sammy Gyamfi also urged the government to ensure strict provisions on tax compliance and enforcement to ensure that the state is not ‘cheated’ through ‘transfer pricing’ and ‘creative accounting’.
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