According to the research, a domestically operated refinery—whether publicly or privately managed—would only be financially viable if it procures lithium concentrate at prices well below the international market rate. Such a move could significantly reduce revenue streams from taxes, royalties, and dividends associated with Ghana’s existing lithium mining projects.
The NRGI study modelled two key scenarios: exporting raw lithium spodumene concentrate and refining it within Ghana. The results revealed a stark difference. Exporting lithium concentrate—particularly to established Chinese refineries—offers far greater returns for the state.
In a mid-range pricing forecast, local refining could slash government earnings from $2.7 billion to $2.2 billion. Over a 20-year horizon, the estimated revenue loss could exceed $300 million, driven by high capital expenditure, limited supply, and a lack of technical know-how in lithium processing.
China currently processes over 90% of the world’s lithium, leveraging massive economies of scale, low input costs, and government subsidies. The NRGI highlights that most new refinery projects outside China, including those in Australia and Europe, have either stalled or been abandoned due to similar cost-related challenges.
Given the financial implications, the NRGI recommends that Ghana pursue a “mine-and-monitor” strategy—commencing lithium extraction at the Ewoyaa site while keeping an eye on international refining developments. The think tank advises against committing public investment to a potentially loss-making refinery until more favourable conditions emerge.
Although calls for domestic value addition remain strong, the report urges Ghanaian policymakers to carefully consider the economic trade-offs. Notably, the projected $500 million shortfall exceeds the country’s 2024 budget allocation for basic education.
“The desire for value addition is valid, but it must be economically sustainable,” the report concludes.