• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Features

Ghana Needs A Green Minerals Value-Added Development Plan: Three Quick Points On Improving Value Capture In Ghana’s Lithium Agreement

1 year ago
in Features, highlights, Home, home-news, latest News, Opinions
2 min read
0 0
0
43
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Ghana Needs A Green Minerals Value-Added Development Plan: Three Quick Points On Improving Value Capture In Ghana’s Lithium Agreement

1. The increase from fixed royalties to a sliding scale proposal from Bright Simmons, IEA and others is welcome. The increment has to be on price instead of operating margins; the latter will make it difficult to administer, as Fui and Ansah suggest.

The agreement must clearly establish the pricing benchmark or reference (e.g., using spot or futures contracts on the Guangzhou Futures Exchanged (GFEX)) to prevent base profit shifting. Furthermore, an upfront higher royalty payment may compensate and possibly remove the need for any after-tax adjusted windfall taxes, which we may never collect anyway due to the creative accounting that extractive companies sometimes employ [we should learn lessons from the oil and gas sector with the AOE].

So, for example, a 10% base royalty plus a sliding scale going up to, say, 17.5% in 2.5% increments depending on the price of lithium carbonate [this needs to be formally modelled and tested on how it impacts the project economics]. We must also discuss whether the royalties will be ring-fenced for calculating corporate income tax (CIT). That is, whether the royalty payment should be a cost-deductible expense. According to the Minerals Commission website, mining royalties are currently tax deductible as part of the mining fiscal incentives.

2. For the estimated US$185 million capital cost of the project and its huge upside, I expect Ghana, through MIIF, to increase their additional participating stake from the 6% stake in the local assets to, say, 10% to 12%. Money shouldn’t be a problem as the Treasury could provide a block grant or loan to MIIF, which it must repay at an agreed interest rate. More value will be retained in Ghana with MIIF as a partner.

The additional 3% in the shares of Atlantic Lithium [the holding company] is fine for me, subject to the anti-dilution clauses they’ve signed in the agreement with Atlantic Lithium.

3. Local value addition beyond the export of spodumene concentrate (SC6 or 5.5- i.e. 6% lithium oxide and 5.5% lithium oxide) is fundamental. Atlantic Lithium lists a conservative US$1,587 per tonne as a baseline life of mine (LOM) concentrate price for FOB Ghana port, which is a fair figure given historical prices.

RelatedPosts

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

Converting the spodumene concentrate (SC6 or 5.5) via further processing to battery-grade lithium carbonate [99.5% Li2CO3 minimum purity] or lithium hydroxide will significantly increase the value added by over four to five-fold based on 5-year average prices. However, this requires additional investments. Local value addition must not necessarily be by Atlantic Lithium as their core competency is exploration and mining; also, the company has reportedly already sold 50% of the Ewoyaa output to Piedmont, which plans to construct a refinery in Tennessee, USA, leveraging recent Biden administration measures such as the Inflation Reduction Act [IRA].

Ghana must engage other refineries who want to jointly develop that market with us; this is where the joint venture concept makes a lot of difference. They can then use the other concentrates from Atlantic and other lithium mining companies currently exploring but have yet to commence production to feed their factory. Based on further checks with people in the mining and metals industry, such refineries need about 2 to 3 large mining projects to be operational to achieve economies of scale. The volumes from only the single Ewoyaa mine may not be enough to justify any major refinery in the country.

Luckily, most of the Central Region, from Mankessim, Saltpond, Apam, Winneba and Cape Coast, has lithium and other base metals like feldspar, columbite and tantalite [remember the defunct Saltpond ceramics factory built by President Nkrumah]. Setting up a refinery should be a possibility in the near future. Thus, beyond the fiscal regime, the conversation should focus on how Ghana and other players beyond Atlantic Lithium will be prepared to offtake the spodumene concentrate and produce battery-grade lithium carbonate or hydroxide for exports and local consumption to feed the nascent automotive industry.

The extant literature shows that lower energy density materials (LFPs) typically use lithium carbonate (Li2CO3) as a component precursor chemical. In contrast, higher energy-density materials (NMCs) generally use lithium hydroxide (LiOH). NMCs are typically preferred in the automotive industry in regions like Europe and the US, where high energy density is a preference due to range anxiety and inadequate charging infrastructure.

All of this must be anchored on a Green Minerals Value-Added development plan, which maps out the entire value chain and how Ghana can meaningfully participate in it, leveraging the power of the African Continental Free Trade Area (AfCFTA) to become a regional precursor battery manufacturer. We could even process other lithium ores from other countries in the sub-region and beyond.

Tags: Ghana Needs A Green Minerals Value-Added Development Plan: Three Quick Points On Improving Value Capture In Ghana's Lithium AgreementGhana's Lithium Agreementgreen minerals

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

No Result
View All Result

Highlights

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

Banking Sector Soundness Remains Robust in 2024 Amid Strong Profitability, Adequate Capital Buffers

Sha’Carri Richardson Withdraws from US Trials Following Arrest

From Singuluma to El Kaabi: Can CHAN 2024 Unleash the Next Hat-trick Hero?

Ghana to Welcome King’s Baton Relay on August 8 Ahead of 2026 Commonwealth Games

Trending

Features

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

August 2, 2025

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes Parliament has adjourned...

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

August 2, 2025

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

August 2, 2025

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

August 2, 2025
Bank of Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

August 2, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.