{"id":106095,"date":"2025-12-09T20:18:49","date_gmt":"2025-12-09T20:18:49","guid":{"rendered":"https:\/\/sotnews.agency\/?p=106095"},"modified":"2025-12-09T20:18:49","modified_gmt":"2025-12-09T20:18:49","slug":"ghana-risks-losing-about-us630-million-if-government-reduces-lithium-royalty-rate-from-10-to-5-africa-policy-lens-warns","status":"publish","type":"post","link":"https:\/\/sotnews.agency\/?p=106095","title":{"rendered":"Ghana risks losing about US$630 million if government reduces lithium royalty rate from 10% to 5% \u2013 Africa Policy Lens warns"},"content":{"rendered":"
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The Africa Policy Lens (APL) has warned that Ghana could lose significant revenue if the government proceeds with a proposal to reduce the agreed lithium royalty rate for Barari DV Ghana Limited from 10% to 5%.<\/p>\n

According to the APL, the previous government, after Cabinet approval to review royalty rates for lithium and associated minerals, reached an agreement with Barari DV Ghana Limited that set Ghana\u2019s royalty at 10%\u2014five percentage points higher than the standard rate applied in the broader mining sector.<\/p>\n

However, the current administration, whose members had previously criticised the 10% rate as insufficient, has proposed reducing the figure to 5%. The move has generated public debate and concern from policy groups, including the APL.<\/p>\n

Speaking at a press conference in Accra, the APL said it was surprised that the government was considering a rate lower than what was mutually agreed upon, arguing that such a change would diminish Ghana\u2019s projected earnings from the Ewoyaa Lithium Project.<\/p>\n

\u201cThe best international practices in mining investment dictate that royalty rates are not determined by short-term market fluctuations. Even in jurisdictions where sliding-scale royalties apply, upper thresholds are set with future price increases in mind,\u201d the APL stated. The organisation argued that recent declines in lithium prices did not, in its view, justify a downward revision of Ghana\u2019s royalty rate.<\/p>\n

Citing the definitive feasibility study for the Ewoyaa Project, the APL said the project\u2019s all-in sustaining cost (AISC) was estimated at about US$610 per tonne, based on a spodumene concentrate price of US$1,587 per tonne. \u201cAt this benchmark, the company achieves margins of roughly 62% per tonne before royalties,\u201d the group said.<\/p>\n

The APL further noted that even at current market prices of US$1,000\u20131,195 per tonne, the project remained profitable, with estimated margins of more than 40% per tonne. It referenced Zimbabwe\u2019s 2024 introduction of an additional 2% levy on gross lithium revenues\u2014on top of its existing 5% royalty\u2014as an example of a country increasing, rather than reducing, its take despite falling prices.<\/p>\n

In its financial projections, the APL estimated that Ghana could lose between US$210 million and US$630 million over the project\u2019s expected 12-year life if the royalty rate were reduced to 5%. This calculation is based on assumed lithium concentrate prices of US$1,000\u20133,000 per tonne and annual production of 350,000 tonnes.<\/p>\n

\u201cSuch losses would represent revenue foregone with no avenue for recovery,\u201d the group stated.<\/p>\n

The APL concluded that, in its assessment, the 10% royalty rate remains economically sound and in the national interest. It added that even with higher royalty levels\u2014up to 30%, in its estimation\u2014the project would likely remain commercially viable.<\/p>\n<\/div>\n

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\"GhanaThe Africa Policy Lens (APL) has warned that Ghana could lose significant revenue if the government proceeds with a proposal to reduce the agreed lithium royalty rate for Barari DV Ghana Limited from 10% to 5%.<\/p>\n

According to the APL, the previous government, after Cabinet approval to review royalty rates for lithium and associated minerals, reached an agreement with Barari DV Ghana Limited that set Ghana\u2019s royalty at 10%\u2014five percentage points higher than the standard rate applied in the broader mining sector.<\/p><\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_2277560469115098_106292521332774":"","twitter_aToxNzczMzI3Njk4OTg4ODUxMjAxOw==_1773327698988851200":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2106,13625,319,536,2004,1883,10,9],"tags":[],"class_list":["post-106095","post","type-post","status-publish","format-standard","hentry","category-africa-policy-lens","category-barari-dv-ghana-limited","category-economy","category-ghana","category-mining","category-national","category-politics","category-popular"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/posts\/106095","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sotnews.agency\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=106095"}],"version-history":[{"count":0,"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/posts\/106095\/revisions"}],"wp:attachment":[{"href":"https:\/\/sotnews.agency\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=106095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sotnews.agency\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=106095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sotnews.agency\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=106095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}