Best leasing arrangements for lithium mining in the Atlantic for Ghana: Jinapor
The mining lease awarded to Barari DV Ltd, a subsidiary of Atlantic Lithium, for the extraction of lithium at the Ewoyaa concessions in the Central Region, according to Minister of Lands and Natural Resources Samuel Abu Jinapor, has the best terms for Ghana and would be vigorously enforced.
But before the business started operations, Mr. Jinapor emphasized that the mining lease would go through the necessary parliamentary ratification and other regulatory processes.
As a result, he labeled as “palpably false” rumors that the corporation would start mining without parliamentary approval in the first quarter of the next year. lithium
The minister informed Timothy Ngnenbe of Graphic Online on Friday, October 27, 2023, that the company would not start operations until the mining lease it had been granted was ratified by Parliament in compliance with the provisions of Article 268 (1) of the 1992 Constitution and Section 5(4) of the Minerals and Mining Act, 2006 (Act 703). The minister was leading a delegation from Ghana to the ongoing China Mining Conference and Exhibition in Tianjin, China.
The minister made this comment in response to a news release issued by the Minority in Parliament, and public concerns expressed that Barari DV Ltd. was poised to start working without having their mining lease ratified.
Specifically, in a statement dated October 24, the Minority in Parliament had urged the government to bring the mining lease before Parliament for confirmation.
Being thorough
He clarified that before the company could start mining activities, it had to go through additional procedures to get the necessary rights and permits after obtaining the mining lease.
“These include ratification of the mining lease by Parliament, the acquisition of environmental permit from the Environmental Protection Agency (EPA), and the acquisition of an operating permit from the Minerals Commission,” he stated.
The minister praised the public for their interest in the transactions pertaining to the management and exploitation of the nation’s natural resources, but emphasized that the procedures followed in order to grant the lithium mining lease were meticulous and would not violate any constitutional provisions.
Regarding that, he characterized the appeal made by the Minority in Parliament’s statement “moot and uncalled for.” lithium
“The government at all material times, has been mindful of of this constitutional provision as interpreted by the Supreme Court, which is why as aforesaid, such condition precedent is expressly captured in the lease under reference, and is already committed to its full and strict compliance,” he stated.
Best deal
It would be recalled that at the ceremony held to present the mining lease to Barari DV Ltd, the minister indicated that there had been an increased royalty rate from the standard five per cent to 10 per cent.
He had also said there had been an increase in state-free-carried interest from 10 per cent to 13 per cent.
Among other things, he had announced additional government participation though the acquisition of six per cent shares in the company and 3.06 per cent shares in its holding company which was listed on the Australian and London Stock Exchanges, by the Minerals Income Investment Fund (MIIF).
Other significant aspects of the terms agreed in the lease are one per cent growth and stability levy on revenue, one per cent community development fund and strict compliance to prevailing and future local content laws and participation across the entire value chain of the lithium industry.
Mr Jinapor added said the terms negotiated by the government in respect of the Barari DV Ltd lithium mining lease was the best for the country and one of the best on the African continent and beyond.
“These terms are by far, better than the terms of mining leases granted for exploitation of green minerals in other jurisdictions, including those with large deposits for these minerals. For instance, Australia, Mali, Democratic Republic of Congo, and Zimbabwe, which have bigger deposits than Ghana, have royalties rates of not more than six per cent whereas Ghana has 10 per cent,” he said.
Background
Per the existing regime, when a mining lease is granted for the exploitation of any mineral, by Section 43 of Act 703, the government is entitled to 10 per cent free carried interest in the mining operations.
Consequently, the government is entitled to 10 per cent free carried interest in all the existing large scale mining companies in the country.
By Section 25 of Act 703, as amended by the Minerals and Mining (Amendment) Act, 2015 (Act 900),mining companies are required to pay royalties of five per cent to the state in addition to other taxes and levies.
It was in a bid to improve this terms that the government approved a policy for the exploitation, management, and utilization of green minerals in the country.
Cabinet approved the policy on July 27, this year. It included recommendations for value addition, improved local content and participation, including listing on the Ghana Stock Exchange and raising state and Ghanaian participation in all green mining enterprises to a minimum of 30%.
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