Third World Network pushes Ghana to prioritise lithium value addition over royalties

The Third World Network-Africa is raising fresh concerns over Ghana’s mineral policy, arguing that the country’s current approach particularly in the ongoing lithium conversation remains overly fixated on royalty rates rather than long-term value creation.

Currently, the majority in Parliament says 10% royalty deal signed by the Akufo-Addo government with Barari DV Ghana Limited for lithium mining violated Ghana’s law, which sets a 5% royalty under the Minerals and Mining (Amendment) Act, 2010.

The government has since presented a revised agreement aligning the royalty with the legal 5% rate.

The Third World Network-Africa maintains that Ghana could derive greater economic benefit from its critical mineral resources by adopting a more strategic, regional outlook and drawing from successful models.

Coordinator of the Third World Network-Africa, Dr. Yao Graham, made the remarks on the sidelines of the opening of an international consultation on Energy Transition, Critical Minerals and Structural Economic Transformation in Africa

“The ultimate benefit from lithium is its use in producing the commodities like batteries and so on that are the sources of renewable energy and in that process also comes the question about creating new industries which add value, which process and so on. Royalties really are the bottom end of the chain about what you are getting from the raw mineral.

“There is a big discussion to be had about Ghana’s royalty regimes in general. But I am saying that in addition to that discussion about royalties, there is that bigger question about lithium as an industrial input. What is Ghana’s plan? Not only acting alone but in concert with other actors, for example Nigeria which also is producing lithium. How can we optimize the possibilities of lithium? That whole discussion about royalties, important as it is, is a very narrow discussion” he said.

Executive Director of the Southern Africa Resource Watch, Claude Kabemba, says Africa must begin asserting itself in determining the prices of its natural resources.

“We have got a lot of minerals but we don’t have the basic tools to help us turn those minerals into some useful use of some goods practically. My sense is that in the shorter term, we need to quickly ensure that because we don’t have the capacity to add value now, we need to quickly expand our capacity to negotiate contracts and to collect a lot of money out of these resources. We are in a position of power with our resources. How do we negotiate because the market is good? How do we become the people who impose the price of these minerals so that we can collect enough revenue? When we have enough revenue we can then invest in other sectors,” he added.