The Centre for Natural Resources and Environmental Management (CNREM) is deeply concerned about the mining contract signed between the Government of Ghana and Barari DV Ghana, a subsidiary of Atlantic Lithium, being touted as the best ever by Mr. Sam Jonah and Mr. Samuel Jinapor. It is sad to say that mining contracts in Ghana are not in consonant with the tenants of the UN Conventions Ghana is a signatory to. It seems our political leaders and the elite technocrats are completely oblivious of the 1962 General Assembly Resolution on permanent sovereignty over Natural Resources (GAR 1803), and Charter of Economic Rights and Duties of States 1974, which contents must be incorporated into our Laws that govern our mining contracts to enable Ghana derives full benefits from her natural resources.
Our basic analysis of the terms of contract, especially the percentage of royalties and share ownership, have led us to believe that the terms of this agreement are not favourable to the interests of the people of Ghana. In particular, we are troubled by the fact that the contract grants to Ghana, the sovereign owner of the resources, only 10% royalties and 13% carried interest, and 6% participating interest, and 3.06% share in the mother company, Atlantic Lithium through MIIF, which are associated with capital cost expenditures by Ghana. The agreement is in all respect similar to the Jubilee Field Agreement, except the 3.06% shares in the mother company, thus throwing dust into the eyes of Ghanaians as the best
Unfortunately, royalties in Ghana are calculated on the mind-head prices, determined by the mining companies, and not on the actual international market prices, resulting into huge financial losses to Ghana every year.
The long-term base price of US$1,410 per ton was used to assess the viability of the project, putting the total value of 25 million tons at US$35.25 billion. 10% royalty of it should give Ghana US$3.525 billion which will never materialise. How much of the net gross of US$31.725 billion will accrue to Ghana as the Carried and Participating Interests and the share in the mother company which would be determined by net profits and dividends declared every year, as Ghana will have a tenuous control over the expenses of the company? The colonial royalty mining contracts have not yielded any good results in Ghana over the years, therefore, Ghanaians should not expect any good returns from this lithium contract. The announcement by the CEO of Atlantic Lithium that Ghana would be earning US$6.6 billion yearly is a ruse nobody should believe. Moreover, the current market value of the 25 million tons is US$114.525 billion.
There is a paradigm shift from the Colonial Royalty Contracts Systems to the Mineral Production Sharing Agreements (MPSA) by progressive countries in the Far East and others in East Africa.
Dr. Antwi Danso of University of Ghana, contributing in a public lecture delivered by Prof. Mike Oquaye on the topic, “Maximizing Full Benefits from Natural Resources the Constitutional Way,” at the IEA conference room on 8th November, 2022, asserted that Eritreans take 40% of the total output of all subsoil minerals mined in their country. That is the MPSA. Under MPSA, there is no question about Royalties and Corporate Taxes. This is the modern, fairer way of sharing wealth from natural resources of a country without the necessary capital input.
Having read the press release by Mr. Jinapor, we are not impressed by the assurance that the agreement would be laid before Parliament for scrutiny, judging by its track record. CNREM knew all these years that IronRidge Resourc Australia was the company exploring Ewoyaa lithium deposits under very bizarre terms. The emergence of Barari DV Limited, as a subsidiary of Atlantic Lithium, granted the exploration in 2012 is mind-blogging. We were even wondering why it is taking IronRidge so long conducting the exploration. It was alleged they were actually mining.
Lots of corruption allegations have been leveled against Atlantic Lithium on various websites about its lithium deals in Ghana. Some of the website are www.reuters.com>article.piedmo, markets.bussinessinsider.com>stocks. It was reported on www.mining.com>web>piedom that, “the short seller said it does not believe that authorities in Ghana would ratify Atlantic’s Mining Licenses tinted by corruption”.
Also, the Australian Securities Exchange has raised concerns with Atlantic Lithium relating to its dealing in Ghana, questioning the company over a transaction previously queried by US activist investors. Ref: www.afri.com.
As expected, Atlantic Lithium has put up a defense to deny the corruption allegation.
Comparing the terms of this contract to other nations currently exploiting lithium, such as Mexico, Bolivia, and Argentina, it is evident that Ghana's share in this venture falls far short of securing the maximum benefits for the nation. In those countries, mining contracts often provide for higher percentages of share ownership, ensuring a more equitable distribution of the revenue derived from these resources, and a more significant contribution to the national economy through other agreed terms such as processing the lithium in those countries. Attached are some links to corroborate us.
In light of these concerns, the CNREM calls for the immediate cancellation and renegotiation of the contract terms between the Government of Ghana and Barari DV Ghana. We believe that this presents an opportunity to secure more favourable terms that will benefit our nation in the short and long runs.
Furthermore, CNREM advocates for the nationalisation of mineral resources in Ghana, particularly lithium, a green resource, which plays a pivotal role in the development of a green and sustainable economy. Given the strategic importance of lithium in the global shift towards clean energy solutions, it is imperative that the exploitation and management of this vital resource remain in the hands of the Ghanaian people and the nation itself through their government; not private ownership for only a few filibusters made up of connected Ghanaians fronting for foreign interests. The ruse of "local partners" who front in sweet deal contracts to loot Ghanaians must come to an end now. It was high time the modern model of Production Sharing Agreement or Contract is adopted in Ghana too. It is the best option for a poor nation like Ghana and provides a fair and equitable returns to investors, too.
The CNREM firmly believes that by nationalising lithium mining and insisting on local processing, this will ensure a more equitable distribution of the wealth generated. Ghana can then maximises the benefits of this valuable resource for the prosperity of its citizens and the sustainable development of the nation.
The CNREM, therefore, urges the Government of Ghana to consider these recommendations seriously and act in the best interests of the country, its people, and the environment.
The CNREM further calls on the people of Ghana to wake up from their slumber and not allow the Executive and Parliament to collude again to deprive them of their wealth, just as was done with our petroleum and gas deposits. They should rise up and oppose the ratification of yet again another obnoxious contract, which will amount to selling them down the river by their elected representatives who were alleged to have accepted huge sums of dollars as a condition for approving the obnoxious Act 919. Not again!
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