Lithium Refinery Ambition: Mine-and-Monitor Strategy Preferred Over Refinery Push
Ghana’s ambitions to fast-track the construction of a domestic lithium refinery could result in substantial financial losses and undermine potential revenue from the country’s emerging lithium sector, Economic Analyst at the Natural Resource Governance Institute (NRGI), David Adjei, has cautioned.
Speaking to NorvanReports during a media engagement on Ghana’s lithium fiscal regime and refinery strategy, Mr Adjei argued that the current fiscal and market dynamics do not favour a refinery investment in the short to medium term. According to him, modeling done by the Institute suggests that the refinery, as currently envisioned, is not economically viable under prevailing conditions.
“The study modelled three price scenarios to assess viability,” Mr Adjei explained. “At a low spodumene price of $800 per tonne, medium of $1,900, and high of $3,500, and with refined lithium carbonate prices ranging from $9,500 to $30,000 per tonne, the refinery would only break even if it acquires spodumene below market value. If the government pays market price, losses could exceed $500 million.”
The NRGI’s findings indicate that even under medium price scenarios, establishing a lithium carbonate refinery in Ghana would diminish government revenue streams — including royalties, taxes, and dividends — from Atlantic Lithium’s Barari project at Ewoyaa. The refinery would only attain marginal profitability if it paid significantly less than global market rates for the raw spodumene, potentially reducing value capture from upstream operations.
Mine-and-Monitor Strategy Favoured
Rather than rushing to construct refining capacity, Mr Adjei advocates for a “mine-and-monitor” approach, arguing that such a strategy would better position Ghana to extract value over the long term. This approach, he noted, offers several strategic advantages:
Development of sector fundamentals: Building out upstream mining capabilities while monitoring market trends would solidify Ghana’s position in the global lithium supply chain.
Potential price premiums: Rising global demand for spodumene, particularly outside China, could create favourable market conditions and premium pricing for Ghanaian output.
Innovation opportunity: Emerging battery chemistries — such as lithium phosphate — could shift the economic equation for early producers.
“There’s merit in delaying the refinery. This allows Ghana to monitor price developments, learn from global experiences, and optimise policy,” Mr Adjei stated.
Caution and Strategic Planning Advised
Nonetheless, if the government opts to pursue refining ambitions, Mr Adjei stressed the importance of thorough planning. He recommended working with investors to:
Replicate proven refinery models from China to reduce design risk.
Explore domestic production of critical reagents to cut input costs.
Develop strategies to repurpose refinery byproducts, lowering waste management expenses and creating synergies across sectors.
Transparency and Public Engagement Key
Mr Adjei emphasised that trust and transparency should underpin any future decision. “The government should involve citizens at every step of the process,” he said. “Trust is essential for managing public expectations and improving the investment environment for lithium refining in the long term.”
Ghana is home to significant lithium reserves, particularly at the Ewoyaa deposit in the Central Region, which is being developed by Atlantic Lithium. The project is expected to become a cornerstone of West Africa’s battery minerals landscape. However, the debate over how best to extract value from the resource — through direct export or domestic beneficiation — remains a critical policy question for the government.
As global demand for electric vehicle and energy storage minerals intensifies, Ghana’s policy choices now could shape the country’s industrial trajectory for decades to come.
