Lithium Contract Is Not In The Best Interest Of Ghana

Analysis of key metrics from the Atlantic Lithium Company shows that Dr Bawumia and Jinapor negotiated a poor contract given Ghana’s stake of 10% royalties and 13% carried free interest against Atlantic Lithium’s key financial metrics of 365ktpa, $1.3 bn NVP (8), 12-year mine life, 94% IRR, $6.6bn LOM Revenues, 4.7Mt Secondary Product (low grade Li2O), and $185m Capital Cost including $675/t All in sustaining cost.

The 365ktpa means the mine is projected to produce 365,000 metric tons of lithium each year and expected to remain relatively constant over an extended period as indicated by the "steady state". Additionally having the net present value stated at $1.3 billion (bn), means that the project is expected to generate a net value of $1.3 billion in today's dollars based on adjusted present value at a discount rate of 8% per year. Now The term "12-year LOM indicates life of mine projected to last for 12 years after which the mine may be deemed economically unproductive to continue operations. Atlantic Lithium estimation of a "94% internal rate of return (IRR) shows the project is lucrative with cash inflows expected to exceed cash outflows by a significant margin.

I wonder if the NPP so-called men including Dr Bawumia saw these metrics especially the projected $6.6bn LOM Revenues . If the investor is expecting a total revenue of $6.6 billion over the life of the mining project, then why is it that Dr Bawumia and Jinapor settled for 10% royalties and 13% carried free interest? Also, the lithium investment required $185m Capital Cost to set up the project. Sadly Ghana could not come up with such cost of capital. It’s my hope that Ghana will reject NPP come election 2024.