A fresh controversy has erupted over the emerging lithium industry as the Africa Policy Lens (APL), a governance and economic policy watchdog, warns t
The proposal, which contradicts earlier commitments made under the previous administration, has triggered widespread concern among industry observers and civil society groups.
The dispute traces back to 2023–2024, when the former government initiated a comprehensive review of the mineral fiscal regime, particularly targeting strategic minerals such as lithium, which had become central to the global energy transition.
Following Cabinet approval, Ghana entered into negotiations with Barari DV Ghana Limited, developers of the Ewoyaa Lithium Project in the Central Region.
Those negotiations culminated in a mutual agreement that secured a 10% royalty rate for Ghana—double the 5% baseline applied in the traditional mining sector.
The deal was widely hailed at the time as a major correction to the historical pattern of undervaluing its mineral assets.
Ironically, several members of the then-opposition—now part of President John Mahama’s government—publicly criticized the 10% rate as “not ambitious enough.”
Yet, barely a year later, the current administration has signaled its intention to reverse the negotiated royalty upward adjustment and restore a 5% rate.
The proposed reduction has shocked observers and sparked accusations of policy inconsistency and economic short-sightedness.
In a sharply worded statement, the Africa Policy Lens expressed “deep surprise” that the government appears unwilling to implement a mutually agreed arrangement that clearly enhances the economic interest.
Instead, APL argued, officials are now pursuing a royalty structure that offers the state substantially less revenue despite no compelling economic justification.
According to APL, the Mahama administration’s rationale—centered on global lithium price fluctuations—does not withstand scrutiny.
“Best international practices in mining investment dictate that royalty rates are not determined by short-term market fluctuations,” the group asserted. Even in countries where royalty regimes are flexible, APL noted that upper thresholds are determined with long-term price cycles in mind. The organization pointed out that lithium prices, like many commodities, are notoriously cyclical, and decisions based on temporary dips could permanently disadvantage Ghana.
The strange stance of the NDC and Mahama government has raised eyebrows, with many questioning how a government, which is supposed to defend the interest of the nation, is rather vehemently pushing for a reduced stake, contrary to it’s position in opposition.
The APL said in the statement that the present government’s claim that the previous government acted illegally, in a bid to justify its strange reduction of the royalty rate, smacks of corruption.
“The foregoing analysis demonstrates clearly that the previous government acted appropriately in securing what remains Ghana’s most advantageous mining agreement to date,” the APL said after giving a detailed background to how the previous government reached the 10% mutual agreement.
“Assertions by the current government regarding lithium pricing and the legality of the lease are not only misleading but also raise serious concerns that should engage the attention of citizens and anti-corruption agencies. Should the proposed reduction of the royalty rate from 10 percent to 5 percent be implemented, Ghana stands to forfeit millions of dollars in revenue.”
APL backed its critique with data from the Ewoyaa Project’s definitive feasibility study.
The report estimates an all-in sustaining cost (AISC) of US$610 per tonne, with profitability margins of about 62% per tonne at a benchmark price of US$1,587.
Even at depressed 2025 market prices between US$1,000 and US$1,195 per tonne, the project remains highly profitable, maintaining margins above 40% before royalties. This, APL argues, negates claims that a 10% royalty threatens project viability.
APL further referenced Zimbabwe’s recent policy response to falling lithium prices, where authorities introduced an additional 2% levy on gross lithium revenues atop its 5% royalty. The contrast, the organization said, shows that prudent governments adjust fiscal terms to maximize long-term national benefit, not to cushion mining companies during temporary commodity downturns.
Based on projected production levels of 350,000 tonnes annually over a 12-year mine lifespan, APL calculated Ghana’s likely losses should the royalty be halved. “The nation would forfeit between US$210 million and US$630 million,” the analysis warned, describing the reduction as revenue “effectively ceded to the company, with no mechanism for recovery.”
The group concluded that the economics of the Ewoyaa Project are strong enough to sustain even higher royalty levels without compromising investor profitability.
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