Lithium: Another resource curse or blessing?
News of lithium find in Ghana and Cabinet’s approval of a new Lithium policy may have come with some excitement in some quarters and rightly so.
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The sad reality though is that we have seen enough to jubilate over yet another resource find.
We have been mining gold, bauxite, manganese and farming cocoa for centuries, the question to ask is what is the current state of our mining and farming communities?
Has mining or our natural resources exploitation in general been a blessing to this country or a curse?
Graphic Business is not against the exploitation of our natural resources for as long us these resources will inure to the generality of every Ghanaian.
However, we are against the wholesale of our resources and always getting the short end of the stick.
In our current economic and global ecosystem, it cannot be business as usual, limiting our gains to only royalties and taxes from our natural resource sale.
In 2007, the whole country was buzzing with the news of yet another resource; oil and gas and how the country was going to play in the big leagues of Oil producers and Exporting Countries (OPEC).
Sad to say, over a decade of oil exploration, the country is worse of today than we were in 2007. Today the sad reality again is that our oil refinery has collapsed. It has been turned into oil tank farm.
At a time when an individual has built the biggest refinery in the world to the east of our borders to take advantage of our oil refinery, we, on the other hand have successfully collapsed our oil refinery that would have positioned us in the value-chain of the oil and gas industry.
Ghana’s lithium resources according to experts comes up to 180,000 tonnes of lithium reserves and ranks the country fourth on the African continent behind DR Congo (3,000,000 tons), Mali (840,000 tons) and Zimbabwe (690,000 tons).
Australia is currently the premier producer of lithium worldwide while Bolivia has the largest proven reserves of 21 million metric tonnes.
It is projected that Ghana will generate about $4.8 billion over the life of the mine (LOM) based on a five per cent carried interest in the project.
The carried interest of five per cent is similar to Government’s interest in other decades-old mineral mining agreements which have failed to yield notable benefits to the State or surrounding communities thus far.
According to C-Nergy Ghana, if we must limit the role Ghana will play in the emerging green economy to lithium ore extraction and export, it is imperative that we maximise returns to the state by negotiating more significant carried and participating interest.
The example of Bolivia which successfully negotiated royalties of about 11 per cent in addition to a majority (51 per cent) stake in its lithium mines (49 per cent belongs to the concessionaire/operator) in 2019 is worth investigating.
Therefore, anything short of Ghana having a majority stake in the lithium resource will not be beneficial to the people. It is time to change the narrative.
The lip service to value addition to our natural resources must stop with the lithium resources and we must begin to take the actions that will generate wealth for the country and its citizens and not for a few.
Graphic Business takes note of government’s intention to add value to lithium. This is the way to go.
If the economy is to grow, the development of the aluminum integrated strategy, the 60 per cent of value addition to cocoa processing and the value chain of the new lithium resources among others would be the policies that would help generate the needed traction in employment and the growth the economy badly needs at this critical time.
Let us give this a big push.
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