Barari DV Ghana Limited, a subsidiary of Atlantic Lithium Limited, has been awarded a Mining Lease by the government for a period of fifteen (15) years. This lease allows the company to undertake the construction and extraction of lithium at the Ewoyaa site in the Mfantseman Municipality, located in the Central Region of Ghana.
Notably, the Mining Lease includes revised terms aimed at maximizing the benefits derived from this valuable mineral for the country. These terms comprise an increased royalty rate, involvement of the State and Ghanaian entities, and the promotion of value addition to the mined mineral.
The government’s decision to grant the Mining Lease follows the completion of comprehensive prospecting and feasibility studies conducted by the company. This was followed by a series of negotiations between the government and Barari DV Ghana Limited. The lease encompasses an area of approximately 42.63 square kilometres, conferring upon the company the exclusive right to engage in lithium and associated mineral extraction, while adhering to the country’s mining laws.
Lithium plays a crucial role in the manufacturing of lithium-ion batteries, which are being widely promoted as an alternative to fossil fuels in the ongoing battle against climate change. The combustion of fossil fuels in internal combustion engines is a major contributor to the climate crisis. In response, global leaders are advocating for a transition to green energy, aiming to progressively reduce and eventually eliminate carbon emissions.
Several countries have already enacted legislation to phase out vehicles that rely on fossil fuels. This has given rise to a burgeoning market for the battery industry and the minerals necessary for battery production, often referred to as green minerals or critical minerals. Currently, African countries that extract lithium tend to export the mineral in its raw form.
In 2017, Barari Ltd. initiated exploration efforts for lithium in the country and identified significant deposits of high-grade lithium in commercial quantities in Ewoyaa. Geological investigations have also revealed lithium deposits across various regions of the country, spanning from the south to the north, primarily around Cape Coast, Kumasi, Sunyani, Bole, and Wa. However, the country has yet to commence mining operations for this mineral.
During a brief ceremony to formalize the signing of a Mining Lease for Barari DV Ltd., Hon. Samuel A. Jinapor, the Minister for Lands and Natural Resources, emphasized that the government has taken a different approach in handling this particular mineral compared to others. As a result, it was crucial to establish a special policy for the exploitation and management of this mineral before granting any Mining Lease.
After extensive consultations, the Cabinet approved a policy specifically addressing the exploitation and management of green minerals, including lithium. The Mining Lease awarded to the company incorporates the policy that has been approved by Parliament. The Minister clarified that this lease differs from the standard Mining Lease, as it includes the mutually agreed-upon terms between the government and the company, based on the Cabinet-approved policy.
Mr. Jinapor highlighted that the agreed-upon terms ensure that the Ghanaian government and its citizens receive greater value from the mining of this mineral. In terms of specific details, he noted that the royalty rate has been increased from the standard five percent (5%) to ten percent (10%), and the State’s free carried interest in the mining operation has been increased from ten percent (10%) to thirteen percent (13%).
The mining operation will see an increase in Government ownership, with an additional 6% stake acquired through the Minerals Income Investment Fund (MIIF). The Company’s parent entity listed on the Australian and London Stocks Exchange will also have a 3.06% ownership by the Government. To promote local participation, the Company will be required to list on the Ghana Stock Exchange, allowing Ghanaian entities and individuals to invest in the business.
Furthermore, the Company has committed to contributing 1% of its revenue to a Community Development Fund, which will support the development of communities affected by their operations. Additionally, the Company aims to establish a chemical plant for lithium processing. If unable to do so, the Company will supply its lithium to any third-party chemical plant in the country. These measures aim to generate more job opportunities and promote overall development in the mining communities and Ghana as a whole.
The Government acknowledges the impact of mining-on-mining communities and is determined to guarantee that these communities, as well as Ghanaians who legally own these minerals, reap their benefits. It urges the company to strictly adhere to the mining laws and the agreed-upon terms with the Government while focusing on responsible, sustainable, and environmentally friendly mining practices.
Mr. Niel Herbert, the Executive Chairman of Atlantic Lithium Limited, expressed gratitude to the Minister and the Government for their collaboration in achieving this significant milestone. He emphasized the importance of the Ewoyaa project to the company and its willingness to collaborate with the Government to ensure the responsible exploitation of this mineral for the betterment of Ghanaians. He further assured compliance with Ghana’s laws and commitment to maintaining a safe mining environment.
Source: Apexnewsgh.com/Ghana
For publication please kindly contact us on 0256336062 or Email apexnewsgh@gmail.com
