Mining agreements deserve urgent attention from Parliament

The fate of two major mining agreements hangs in the balance as the uncertainties surrounding the resumption of sittings in Ghana’s Parliament take a new twist.

The agreements are the a proposed joint venture between Gold Fields’ Tarkwa Mine and AngloGold Ashanti’s Iduapriem Mine in Ghana and the Atlantic Lithium Mining project at Ewoyaa in the Central Region.

These major agreements, should they take off as projected according to the timelines of the two companies, are expected to rake in hundreds of millions of dollars in revenue to the state, a development which could help shore up the country’s foreign exchange reserves and also contribute to the stabilisation of the weak local currency.

While the Graphic Business would not attempt to wade into the details of the controversies surrounding the happenings in the noble House, we trust that considering the financial position of the country, there is the need for Parliament to allow cool heads to prevail to enable the House to pass the two bills and other priority bills pending before it.

There is no further time to waste because in a couple of weeks, the eighth Parliament of the Fourth Republic to come to an end, meaning the bills will not be passed until next year.

The paper trusts that the House must consider the fact that the companies involved are a going concern with clear timelines for their operations and, therefore, any such delays could seriously impact their balance sheets.

It is also imperative to note that the state has a stake in the deal and considering the precarious financial situation the country finds itself, it needs to work to leverage every opportunity that can bring money into its coffers.

The Graphic Business is worried that at a time when the country is working to shore up domestic revenue, incidents such as the present situation in Parliament over who constitutes the majority in the House are taking the country backwards.

Gold Fields Limited and AngloGold Ashanti in their joint media release of March 16, 2023, announced that they had agreed on key terms for a proposed joint venture between Gold Fields’ Tarkwa Mine and AngloGold Ashanti’s Iduapriem Mine in Ghana. 

The Graphic Business is excited that the companies aim to create Africa’s largest gold mine. For instance, under the agreement, Gold Fields would hold a 60% stake; AngloGold Ashanti 30%, while the Ghanaian government would keep the remaining 10%.

The joint venture, at the time of the agreement, was projected to produce an average of 900,000 ounces annually over the first five years and 600,000 ounces over its estimated 18-year lifespan. 

In the case of the Atlantic Lithium, the project is proven to produce a spodumene concentrate product suitable for conversion to be used in electric vehicle (EV) batteries.

In June 2023, the company announced its Definitive Feasibility Study (“DFS”) for the Ewoyaa Project, confirming the project’s economic viability and profitability potential for the production of 3.6Mt spodumene concentrate over a 12-year Life of Mine (“LOM”).

The DFS considers the February 2023 Mineral Resource Estimate of 35.3Mt at 1.25% Li₂O (increased in July 2024 to 36.8Mt at 1.24% Li₂O), Ore Reserves of 25.6Mt at 1.22% Li₂O and long-term concentrate pricing of US$1,410/t, FOB Ghana.

The paper has observed from recent statements by the mining giants that the parties have attempted to secure the required permits before Parliament rises but that has not materialised.

The frustrations of the companies, albeit polite, are clear in their statements and comments on the delays.

This is where we believe that Parliament needs to resolve the issues at stake within the week and allow extra hours of sitting to ensure that all the outstanding priority bills, particularly, those on mining, are cleared to enable the companies involved to kickstart their operations.