Lithium royalty phrases short-change Ghana – Prof. Mike Oquaye – Life Pulse Daily

Introduction

Ghana’s lithium sector has recently become the focus of a heated debate involving the country’s former Speaker of Parliament, Prof. Aaron Mike Oquaye, and the government’s proposed mining settlement with Barari DV Ltd. The discussion centers on the royalty framework that would govern the extraction of lithium and other minerals in the Mankessim area of the Central Region. In this article we unpack the key points of Prof. Oquaye’s critique, explore the legal backdrop, analyse the potential impacts on Ghana’s economy and communities, and offer practical guidance for stakeholders navigating this evolving landscape.

Key Points

• Prof. Oquaye argues that the current royalty rate of 5 % is too low and unfair to local communities.
• He calls for a reassessment of the royalty structure, suggesting a rate closer to 20 % to reflect the true value of the resources.
• The settlement between the government and Barari DV was withdrawn from Parliament on 10 December to allow further stakeholder consultations.
• The proposed 10 % royalty would contravene the Minerals and Mining (Amendment) Act 2010, which caps royalties at 5 %.
• The debate highlights broader questions about Ghana’s mineral governance and the need for stronger protection of national interests.

Background

Ghana’s Lithium Potential

Ghana is emerging as a significant player in the global lithium market. The country’s lithium reserves, particularly in the Mankessim deposit, are estimated to hold enough lithium carbonate to meet a sizable portion of the world’s demand for batteries used in electric vehicles and portable electronics. According to the Ghana Minerals and Mining Ministry, the Mankessim lithium project is located within a 20‑meter thick spodumene seam that could be mined using open‑pit or underground methods, depending on geological conditions.

Barari DV Ltd. and the Proposed Settlement

Barari DV Ltd., a Ghanaian mining company, entered into a negotiation with the government to develop the Mankessim lithium deposit. The settlement, formally presented to Parliament by Minister Emmanuel Armah‑Kofi Buah, outlined the terms for exploration, licensing, and revenue sharing. Central to the agreement was the royalty structure—specifically, the percentage of production value that would be paid back to the state and local communities.

The Minerals and Mining (Amendment) Act 2010

Ghana’s legal framework for mining is governed by the Minerals and Mining (Amendment) Act 2010. The Act sets a statutory ceiling for royalties at 5 % of the value of minerals extracted. Any royalty rate above this threshold would be deemed unconstitutional and unenforceable. The Act also provides for a “benefit‑sharing” mechanism, requiring the state to allocate a portion of mining revenues to local development projects.

Prof. Mike Oquaye’s Role

Prof. Aaron Mike Oquaye served as Speaker of Parliament from 2017 to 2021 and is a respected public intellectual in Ghana. In a Channel One TV interview on 15 December 2025, he publicly criticised the lithium settlement, arguing that the royalty framework was unfair to local communities and that Ghana was effectively accepting a low business model for high‑value minerals.

Analysis

Legal Implications of the Current Royalty Rate

The proposed 10 % royalty, if adopted, would directly contravene the Minerals and Mining (Amendment) Act’s 5 % ceiling. Should the government proceed with the higher rate, it would risk legal challenges from mining companies and could undermine investor confidence. The withdrawal of the settlement from Parliament was therefore a prudent step, allowing for a review of the legal framework and alignment with constitutional provisions.

Economic Impact on Local Communities

Royalty rates determine how much revenue local communities receive from mining activities. At the current 5 % rate, communities in the Mankessim area receive a relatively small share of the profits. Prof. Oquaye’s advocacy for a 20 % rate reflects a desire to increase local benefits, including infrastructure, education, and health services. Such a shift could improve the socio‑economic conditions of rural populations, but it would also increase the cost of mining operations and could deter foreign investment if not balanced with other incentives.

Investor Confidence and International Standards

International mining investors often benchmark royalty rates against global best practices. In many jurisdictions, royalty rates for lithium range from 2 % to 10 %. A 20 % royalty would place Ghana among the highest royalty jurisdictions, potentially raising concerns about the feasibility of large‑scale projects. However, Ghana could mitigate this by offering additional incentives—such as tax holidays, streamlined permitting, or infrastructure support—to maintain attractiveness for investors.

Governance and Transparency

The debate underscores the importance of transparent governance in the mining sector. Ghana has recently adopted the National Mining Policy 2020, which emphasizes community participation, environmental stewardship, and equitable resource sharing. A robust royalty framework aligns with these principles, ensuring that the state’s and local communities’ interests are protected without compromising the legal integrity of the sector.

Practical Advice

For Mining Companies

• Understand the Legal Landscape: Ensure that royalty rates comply with the Minerals and Mining (Amendment) Act 2010. Any deviation can lead to legal disputes and project delays.
• Engage with Local Communities: Proactively collaborate with community leaders to draft benefit‑sharing agreements that reflect local needs and expectations.
• Include Flexibility in Contracts: Incorporate clauses that allow royalty adjustments based on market prices, production volumes, and socio‑economic indicators.

For Local Communities and Civil Society

• Participate in Consultations: Attend stakeholder meetings and public hearings to voice concerns and propose community benefit plans.
• Demand Transparent Reporting: Advocate for regular public disclosure of royalty payments and community development projects.
• Leverage Legal Instruments: Use the Community Right to Information and the National Development Plan to ensure that community interests are formally recognized.

For Policymakers and Regulators

• Re‑examine Royalty Structures: Conduct a comparative study of royalty rates in similar jurisdictions to calibrate a rate that balances national revenue and investor appetite.
• Strengthen Enforcement Mechanisms: Establish clear monitoring and audit procedures to verify royalty payments and prevent corruption.
• Promote Capacity Building: Offer training programs for local officials and community representatives on mining economics, contracts, and negotiation tactics.

FAQ

Conclusion

The debate over Ghana’s lithium royalty framework highlights a critical juncture in the country’s resource management. Prof. Mike Oquaye’s call for a higher royalty rate reflects legitimate concerns about equity, community benefits, and national revenue. Yet any adjustment must be carefully balanced against legal constraints and investor expectations. By engaging all stakeholders—government, companies, local communities, and civil society—and by fostering transparent, data‑driven decision‑making, Ghana can craft a royalty regime that both protects its citizens and sustains its position as a global lithium supplier.