Delay in parliamentary processes needed to ratify the country’s first lithium mining lease has left Ghana’s first lithium mining venture in limbo.
Stakeholders, including government, investors and community leaders, are instead said to be engaged in renegotiations for a new deal to revive the prospects of the venture.
However, more than 100 workers at Atlantic Lithium, operators of the lithium mining project at Ewoyaa in the Mfantsiman and Abura-Asebu-Kwamankese (AAK) areas in the Central Region, have lost their jobs following the delayed parliamentary ratification of the company’s mining lease.
In October 2024, the company employed 167 workers along its operational chain, including geologists, laboratory technicians, drivers, electricians, and other support staff.
However, the General Manager of Atlantic Lithium, Ahmed Salim Adam, disclosed that the number had been trimmed to just 62 because of the delay by Parliament to ratify the lease agreement for full operation to begin.
Mr Adam made this known to the Daily Graphic at the ongoing Africa Extractives Media Fellowship (AESMF) in Accra.
Context
After six years of exploratory activities, the government granted the country’s first-ever mining lease for lithium to Barari DV Ghana Ltd, a subsidiary of Australia-based Atlantic Lithium.
The then Minister of Lands and Natural Resources, Samuel Abu Jinapor, signed the 15-year lease agreement over an area of approximately 42.63 square kilometres with the company on October 19, 2023.
The $250-million project located at Ewoyaa in the Mfantseman Municipality in the Central
Region was expected to commence production by 2025.
The lease, which was in line with Ghana’s Green Minerals Policy, had an increase in the royalty rate from the standard five per cent to 10 per cent.
Additionally, the lease had an increment in the state’s free carried interest from 10 per cent to 13 per cent.
Among others, the government, through the Minerals Income Investment Fund (MIIF), was also expected to acquire an additional six per cent of shares in the mining company and 3.06 per share in the holding company, which had been listed on the Australian Stock Exchange and the London Stock Exchange.
Two clear years after the lease was granted, however, Parliament has yet to ratify the lease, the final legal hurdle that would pave the way for the company to begin production.
Mr Adam said in the circumstances, the company was left with no option but to lay off some workers.
"Both the company and the workers were fully prepared to commence operations. All the necessary tools, equipment and logistics had been put in place, and everyone was ready to get to work, but with the delay in ratification of the lease, it does not make economic sense to keep all the workers,” he said.
He added there was a looming redundancy programme that could further reduce the 62 workers currently on site.
He described the decision to lay off the workers as a difficult one, stressing that it had affected not only the company but also residents in host communities, such as the Mfantsiman and AAK districts, where expectations for jobs were high among the youth.
Mr Adam further stated that the delayed ratification of the lease was also a drain on the national coffers since the expected revenues to the state were being lost.
He said although the company had injected $68 million into the project, that had not translated into the required economic returns, and the situation could worsen if urgent steps were not taken to ratify the lease.
Assurance
The Atlantic Lithium General Manager, nonetheless, gave an assurance that if the lease was ratified by Parliament, “we will begin work immediately".
Mr Adam further stated that once Parliament approved the lease, all those who were laid off would be re-engaged alongside new recruits from the surrounding communities.
He mentioned that the Minister of Lands and Natural Resources, Emmanuel Armah-Kofi Buah, had assured the company that the lease would be ratified soon.
According to him, the minister had indicated that the lease would be put before Parliament for ratification during this session of sitting by the House.
“We are hopeful that by the end of the year, operations will begin,” he added.
In spite of the delay, Mr Adam said Atlantic Lithium had continued to maintain a good relationship with its host communities through various corporate social responsibility initiatives, including the provision of boreholes, rehabilitation of schools, and other community support projects.
He emphasised that the company remained committed to contributing to national development once all the legal processes were completed.
The Africa Extractives Media Fellowship aims to train journalists to effectively report on the extractive sector.
The programme, which was launched last Tuesday, has 30 Ghanaian journalists in its first cohort.
It is being organised by Newswire Africa, in partnership with the Australian High Commission, and supported by several institutions in Ghana.
The training is expected to run until April next year.
The journalists are being taken through data journalism, investigative reporting in the extractive sector, including mining, oil and gas, climate change and energy transition, and environment and social governance.