Seen as part of continental strategy driven by resource nationalism, move may affect Ewoyaa lithium project
Ghana August 7, 2023 approved a new policy for the exploitation, management and regulation of lithium and other green minerals in the country, to keep pace with the rising global demand for minerals critical for transitioning to clean energy.
The policy provides clear guidelines and a fiscal regime for mining so-called green minerals, in a manner that ensures Ghana derives as much benefit as possible from its resources.
It insists on a higher level of local participation in the green minerals value chain as opposed to the 10 per cent vested interest the state had currently in mining entities, said Samuel A Jinapor, Minister for Lands and Natural Resources.
The principle that formed the basis of the policy is that exploitation of green minerals must benefit Ghanaians who were the true owners of the resource, he added
Often referred to as “minerals of the future”, green minerals are metals and other mineral resources that are needed to support the transition to clean energy technologies aimed at reducing carbon emissions. These include — bauxite, cobalt, copper, lithium, granite, manganese and nickel.
“The goal of the policy is to retain a significant proportion of the value chain of these future and other critical minerals in our country, as far as possible,” Jinapor had mentioned during the 2023 Ghana Mining Expo in July.
It prohibits export of critical minerals including lithium, bauxite and iron, among others, in their raw state since this denies the country opportunity to add real value to the economy, the minister said at the Natural Resources Stakeholder Dialogue held in Accra in May 2023.
The policy approved by the cabinet on July 27, 2023 is very likely to be passed by the parliament before the end of 2023.
The minister dismissed reports that suggested some licences had been issued for mining lithium. “No person or company has any permit or licence to mine or exploit lithium. The licences that were granted were for exploration, which is different from exploitation,” he emphasised.
This significant policy action by Ghana follows recent decisions by Namibia and Zimbabwe to ban the export of lithium ore.
On June 8, 2023, the Namibia government banned the bulk export of unprocessed minerals including lithium, graphite and cobalt, known in the industry as direct shipping ore (DSO).
In December 2022, Zimbabwe prohibited export of raw lithium from its mines to stop losing billions of dollars in mineral proceeds to foreign companies.
As global demand for critical rare earth elements rises, many countries have looked to Africa’s abundant stores of cobalt, lithium, copper and other minerals vital to the manufacturing of modern technologies.
According to the International Energy Agency, electric vehicles (EV) and battery storage account for about half of the mineral demand growth from clean energy technologies over the next two decades, spurred by the surging demand for battery materials.
Mineral demand for use in EVs and battery storage is expected to grow around 30 times in the period to 2040. Lithium will see the fastest growth rate, with demand growing by over 40 times in the sustainable development scenario, stated African Natural Resources Management and Investment Centre of the Africa Development Bank in a paper on African Green Minerals Strategy.
China is among the largest players on the continent with billions invested in the African mining and mineral extraction sectors.
Extraction of Africa’s reserves has been largely hindered by weak domestic governance structures and policy impediments. But the continent is set to remain one of the major suppliers of a number of commodities in the coming years, noted Economist Intelligence Unit, the research team of the British news publication The Economist, in its analysis.
As countries, especially China, rush to Africa, these developments across Africa are in accordance with the “continental strategy” to ensure larger and just share of the profits from “green minerals”, as outlined by Africa Development Bank recently in a paper. These indicate strengthening of resource nationalism across the developing world, including Africa.
But in Ghana, the news has affected the Ewoyaa lithium project, the first lithium-producing mine in Ghana being developed by Atlantic Lithium, “a Sydney-based, Africa-focused lithium exploration and development company”. The shares of the company fell on August 8, 2023 after it said it will demobilise its equipment at Ghana's Ewoyaa lithium project instead of extending the survey.
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The principle that forms the basis of the policy is that exploitation of green minerals must benefit Ghanaians who were the true owners of the resource. Photo: iStock.png)
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