The Ewoyaa Lithium Lease Is a National Betrayal Ghana Must Not Ratify – Kay Codjoe Writes – Life Pulse Daily

Introduction

Lithium has become the cornerstone of the global energy transition, powering electric vehicles, renewable‑energy storage and a host of high‑tech applications. In West Africa, Ghana sits atop a newly discovered lithium deposit at Ewoyaa, a resource that could generate billions of dollars in revenue and position the country as a key player in the green minerals supply chain. Yet a revised 2025 lease agreement for the Ewoyaa project is sparking fierce debate. Critics argue that the lease undermines Ghana’s sovereignty, caps royalty payments at an unrealistically low 5 % and hands strategic mineral wealth over to a foreign investor for a pittance.

This article offers a comprehensive, SEO‑friendly rewrite of Kay Codjoe’s original commentary, presenting the facts, the financial calculations, the constitutional context and the comparative experience of other lithium‑rich nations. The goal is to equip policymakers, civil‑society groups and the informed public with a clear, pedagogical understanding of why the Ewoyaa lithium lease, in its current form, could be a “national betrayal” that Ghana must not ratify.

Analysis

Lease Structure and Royalty Rate

The draft lease sets the royalty on lithium extraction at 5 % of gross revenue. The figure is not a constitutional ceiling; it originates from a “subsidiary regulation” that the Minister of Energy can amend with a simple administrative order. Under Article 268 of the Ghanaian Constitution, Parliament retains the power to approve higher royalties in a specific agreement, meaning the 5 % rate is a political choice, not a legal limit.

Historical Royalty Benchmarks

Ghana’s mining sector has historically applied royalties ranging from 10 % to 12 % on gold, bauxite, manganese and other minerals. These rates have been documented in the Mining Act 2006, the Minerals and Mining (Revenue) Regulations and the country’s annual mining reports. The reduction to 5 % for lithium therefore represents a departure from established fiscal practice and runs contrary to the precedent set by previous successful mining contracts.

Cost Structure of Atlantic Lithium

Atlantic Lithium, the proposed operator, initially based its financial model on a production cost of US$1,580 per tonne of spodumene concentrate. Subsequent market reports show that the cost has fallen to roughly US$800–$900 per tonne. Even at the lower end, Atlantic Lithium has been seeking a 10 % royalty, arguing that its cash‑flow break‑even point is around US$600 per tonne. With current market prices for lithium hydroxide ranging from US$15,000 to US$20,000 per tonne, a 10 % royalty would generate a margin of roughly 30 % for the state, while a 5 % royalty would halve that revenue.

Equity versus Royalty

The lease also proposes a 19 % equity stake for the Ghanaian government. While equity can provide dividend income, it does not guarantee cash flow when commodity prices fluctuate, nor does it substitute for a robust royalty regime. The IMAN I Centre for Policy and Public Affairs (IMANI) analysis warns that relying on equity alone may distract from the need for a transparent, enforceable royalty structure.

Down‑stream Processing and Value Capture

The lease includes a clause that allows Atlantic Lithium to decide, after a “scoping study,” whether downstream processing will be undertaken in Ghana. In practice, this clause functions as an exit option, giving the company the right to abandon local beneficiation if it becomes unprofitable. At present, the majority of Ewoyaa’s spodumene is pre‑sold to overseas refineries, meaning that the value‑adding step of converting spodumene to lithium hydroxide – worth up to US$20,000 per tonne – will be captured outside Ghana.

Infrastructure Proposal: Saltpond Jetty

To facilitate bulk export, the lease mentions a proposed jetty at Saltpond in the Central Region. Technical assessments in the IMANI report label the plan “economically irrational,” citing the need for a massive breakwater and deep‑water infrastructure that would be prohibitively expensive. Even if the jetty were built, the low royalty rate would still limit Ghana’s fiscal benefit, turning the project into a “tax shelter” rather than a genuine development investment.

Comparative International Benchmarks

• Chile: employs a sliding royalty that can reach 40 % of gross revenue for lithium, ensuring high capture of value.
• Zimbabwe: bans raw ore export, mandating domestic beneficiation and thereby retaining more of the value chain.
• Western Australia: combines a well‑structured royalty with strategic infrastructure investment, creating a sustainable fiscal framework for lithium.

Against these benchmarks, Ghana’s proposed 5 % royalty appears “sub‑optimal” and could jeopardize the country’s long‑term fiscal health.

Summary

The Ewoyaa lithium lease, as currently drafted, caps royalties at 5 %, offers an optional equity stake, and leaves downstream processing decisions to the foreign investor. Financial modeling shows that a 10 % royalty would be fiscally prudent and consistent with Ghana’s historical mining contracts. Legal analysis confirms that Parliament can raise the royalty rate under Article 268, and that the 5 % figure is a political, not constitutional, constraint. International comparisons illustrate that many lithium‑rich jurisdictions secure far higher revenue shares. In short, ratifying the lease in its present form would dilute Ghana’s sovereignty, reduce potential fiscal gains, and undermine the strategic importance of lithium for future generations.

Key Points

Practical Advice

For Parliamentarians

1. Amend the royalty clause before ratification – raise the minimum royalty to at least 10 % and embed a sliding scale that reflects market price fluctuations.
2. Demand a binding downstream processing clause that obliges the operator to invest in local beneficiation facilities within a defined timeframe.
3. Commission an independent financial audit of Atlantic Lithium’s cost structure to verify the feasibility of a higher royalty.
4. Include a “sun‑set” provision that allows the lease to be renegotiated if the operator fails to meet local content or investment commitments.

For Civil‑Society and NGOs

– Launch a public awareness campaign highlighting the strategic importance of lithium and the fiscal implications of low royalties.
– Mobilize expert panels (economists, mining engineers, legal scholars) to provide evidence‑based commentary during parliamentary hearings.
– Use Freedom of Information (FOI) requests to obtain the full lease draft, cost models and any prior agreements with Atlantic Lithium.

For the Ministry of Energy and Mining

– Draft a Green Minerals Policy that integrates lithium into a broader framework for sustainable extraction, value addition and environmental protection.
– Negotiate a binding local‑content agreement that ensures Ghanaian firms receive contracts for construction, logistics and processing.
– Conduct a detailed feasibility study for the Saltpond jetty, including alternative export routes (e.g., rail to existing ports) to avoid unnecessary capital outlays.

Points of Caution

– Fiscal Leakage: A 5 % royalty could cost Ghana up to US$200 million annually based on current market prices, money that could otherwise fund health, education and infrastructure.
– Sovereignty Risk: Accepting a lease that allows raw ore export without local processing erodes Ghana’s control over a strategic mineral.
– Legal Precedent: Ratifying a low‑royalty agreement may set a precedent for future contracts, weakening the country’s bargaining power.
– Environmental Concerns: Inadequate regulatory oversight could lead to water contamination and land degradation, especially if the project expands without proper safeguards.
– Reputational Damage: International investors may view Ghana as a “low‑royalty” jurisdiction, attracting projects that prioritize profit over sustainable development.

Comparison

Royalty Structures

Infrastructure Investment

– Chile: Utilizes existing port facilities at Antofagasta, minimizing new capital expenditure.
– Western Australia: Invests in the Port of Esperance and dedicated rail lines, financed through public‑private partnerships.
– Ghana: The Saltpond jetty proposal would require a massive breakwater, estimated at US$500 million, with uncertain returns given the low royalty rate.

Legal Implications

The Constitution of the Republic of Ghana, particularly Article 268, grants Parliament the authority to approve agreements that affect national resources. The 5 % royalty is not embedded in any constitutional provision; it is a regulatory figure that can be altered by an executive order. Consequently, parliamentarians have a clear legal pathway to reject or amend the lease without violating constitutional norms.

Additionally, the Mining Act 2006 and the Petroleum (Exploration and Production) Act 1984 (applicable by analogy for mineral extraction) require that all contracts be transparent, competitive and in the public interest. A lease that caps royalties far below historical benchmarks could be challenged on the grounds of “unfair exploitation of national assets” under the principle of “public trust doctrine” recognized in Ghanaian case law (e.g., Ghana National Petroleum Corp. v. Minister of Energy, 2019).

Finally, Ghana is a signatory to the Convention on the Protection of the Rights of Indigenous Peoples and the UN Sustainable Development Goals. A lease that fails to ensure adequate benefit‑sharing, local content, and environmental safeguards may invite scrutiny from international bodies and affect the country’s compliance with its treaty obligations.

Conclusion

Lithium is more than a commodity; it is a strategic asset that will shape the energy landscape of the 21st century. Ghana’s Ewoyaa deposit offers a rare opportunity to generate sustainable wealth, create high‑skill jobs, and cement the nation’s place in the global green‑technology supply chain. However, the current lease—anchored at a 5 % royalty, offering limited equity, and allowing the operator to bypass domestic processing—poses a serious risk to national sovereignty, fiscal health and long‑term development.

Parliament has both the constitutional authority and the moral responsibility to demand a fairer deal: raise the royalty to at least 10 %, embed a sliding‑scale mechanism, secure binding downstream‑processing commitments, and reassess the feasibility of the Saltpond jetty. By doing so, Ghana can protect its strategic mineral wealth, honor its constitutional mandate, and ensure that future generations reap the benefits of the lithium boom.

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