Timeline
- In Ghana, the Minister for Lands and Natural Resources has oversight responsibility for all mining activities in the country.
2. He is ultimately responsible for negotiating a lease agreement for the country’s first lithium mine with Barari DV, the local entity of Atlantic Lithium Limited. The Minerals Commission basically works at his behest.
3. He is also responsible for shepherding the negotiated lithium agreement through Parliament. As well as setting the royalty rate that all mining companies, including Atlantic, should pay.
4. In October 2023, Ghana signed a lithium agreement with Atlantic in which the royalty rate was set at 10%. The lithium price then was around $2250 a ton then. The Agreement was laid in Parliament in July 2024, when the average price of lithium was $765.
5. Throughout 2024, the price continued to drop, hitting an all-time low of about $730 in September 2024 and continued to hover around $740 in the subsequent month. Throughout this period, Atlantic and its various supporters continued to lobby and push Parliament for ratification of the Agreement.
6. A new government came to power in January 2025. Subsequently, the Agreement was withdrawn, renegotiated without public consultations, and resubmitted to Parliament in November 2025.
7. The Minister claimed that the basis of the revision was because lithium prices had fallen from $3000 to $630 on the international market. The spot price for the main lithium product Atlantic’s Ewoyaa’s mine shall be producing (spodumene concentrate 6% lithium) had actually increased to ~$990. In fact, lithium prices were in the middle of a strong rally.
8. Activists protested loudly. The Lands Minister ignored them.
9. A new excuse came from the Chair of the committee in Parliament responsible for scrutinising the Agreement: the earlier 10% royalty rate was illegal anyway as the law in place only allowed a maximum royalty of 5%.
10. IMANI and other activists protested this logic. The law gives the Minister the discretion to set the royalty rate by way of regulation. If the government really wishes to uphold the 10% rate, it simply needs to go ahead and do it.
11. Eventually, the President intervened and signalled his support for improved consultation and open and transparent analysis of the best approach to get the most improved deal for Ghana.
12. IMANI submitted its position paper to confirm its readiness to engage the government and the Minister in the open and transparent analysis of the fiscal factors shaping the government’s choice of a royalty rate and other deal parameters.
13. On 10th December, 2025, when the price of lithium spodumene was ~$1250, the Lands Minister withdrew the Agreement from Parliament for “further consultations.”
14. On 15th December, the Ministry hurriedly organised a kind of confab with various organisations and individuals. No concept note was circulated ahead of time. No fiscal analysis as demanded by activists was provided ahead of time to guide the discussions. A week later, no outcomes document has been published.
15. Somehow, it just so happens that anyone critical of the deal was not in the room.
16. On 22nd December, 2025, the Lands Minister triumphantly returned to Parliament with a “revised” agreement and a new royalty regulation. According to Atlantic’s statement to investors, nothing had changed in the agreement except its alignment with the new royalty regulation. The price of lithium spodumene was now about $1300.
17. The new royalty regulation contains a mechanism that establishes a baseline royalty of 5% for spodumene prices up to US$1,500 per tonne, escalating to 12% only when prices surpass US$3,000 per tonne.
Ghana’s Interests are not being served
18. It is beginning to look as if what is driving this behaviour is the interest of Atlantic Lithium, which has critically low cash reserves ($2.75 million as of September 2025) and funding challenges. The company has resorted to salary reductions, firings, and reducing non-critical expenditure to survive. The project is heavily reliant on the Long State Investments equity facility (£28m total) and Ghana’s own MIIF’s strategic investment ($27.9 million). The bulk of the outstanding Piedmont funding (sole funding the first $70 million of capex) was contingent on lease ratification.
19. It clearly cannot be Ghana’s national interests that are driving this headlong rush.
19. It is always important to remember that the current ruling party’s position has been that even 10% royalty is NOT sufficient. We have not seen any formal revision of the party’s position.
20. It is also important to remember that the Growth and Sustainability Levy (GSL) for gold mining companies was hiked to 3% of gross production, making the effective royalty rate faced by gold companies to be more than 8%. “More than” because unlike royalties, GSL is not tax-deductible. The GSL rate for Atlantic Lithium has been maintained at 1%.Talk of darling moves!
21. An attempt has been made to position the “1% of revenues” community development fund contribution in the Atlantic Lithium lease agreement as a fiscal concession to Ghana, but this is misleading. The contribution merely repurposes CSR resources.
22. All large-scale mining companies in Ghana devote roughly similar resources to CSR. For example, funding for Gold Fields’ Foundation comes from 1.5% of their mines’ pre-tax profits plus an additional US$1 per ounce of gold.
23. It is clear to us that the Lands Minister has an axe to grind with Activists and is hell-bent on satisfying only the interests of Atlantic Lithium and their backers in the shadows. He has provided none of the information needed for an open and transparent public consultation process. Not even copies of the Agreement he has laid.
24. At this point, IMANI is compelled to undertake the proposed fiscal modelling with others in public without the Ministry’s inputs.
Some general points to bear in mind
26. An important fact not often appreciated by members of the public is that Ghana has invested nearly $28 million in the Atlantic Ewoyaa project for a 6% equity, and is thus sharing the risks in the project with the investor. Equally not well understood is the fact that Atlantic brought in precious little money. They raised most of the money for the exploration by selling forward Ghana’s lithium resources to Piedmont.
27. To date, the Minister refuses to accept proposals by Activists that minimum-base anti-dilution clauses be inserted into the lease Agreement or a side agreement to prevent Ghana’s equity stake from crashing to zero as we saw with Ashanti Gold during future funding rounds.
28. It is important to realise that many countries have decided that lithium is too strategic to allow the state to be a mere bystander and have ramped up equity interest demands. For instance, Mali, on top of mandating a 10% royalty, demands 35% local equity participation. Chile has gone further and pegged it at 51%. Mexico has decided to simply nationalise the reserves. Indonesia has also moved towards 51% for transition minerals. The point here is not to agitate for nationalisation but to debunk the idea that unless Ghana bends over backwards, it would not be viewed as “investor-friendly”.
Fiscal Modelling Exercise (high-level)
29.
The royalty bands are defined in the new royalty regulation as follows:
- Band 1 (The Base): 5% Royalty for prices up to US$1,500 per tonne.
- Band 2: 7% Royalty for prices between US$1,501 and US$2,500 per tonne.
- Band 3: 10% Royalty for prices between US$2,501 and US$3,000 per tonne.
- Band 4 (The Cap): 12% Royalty for prices exceeding US$3,000 per tonne.
32. To understand the magnitude of the concession, we must compare the “New Deal” (5% base) with the “Old Deal” (10% fixed).
At a Benchmark Price of $1,200/ton:
- Old Deal (10% Royalty):
- Royalty Revenue: $120 million
- GSL (1%): $12 million
- CIT Base: $1,200 – $610 (AISC) – $120 (Royalty) – $12 (CDF) = $458.
- CIT (35%): $160.30
- Net Profit: $285.70
- GoG Dividend (13%): $37.14
- Total GoG Revenue: $329.44 per tonne.
- New Deal (5% Royalty):
- Total GoG Revenue: $295.51 per tonne.
33. The Variance:
The shift to the sliding scale costs the state approximately $33.93 per ton at this price point.
34. In short, Ghana is LEAVING MONEY ON THE TABLE but the Minister refuses to explain why the country should do that. Let’s dig further into this.
35. Below is a simple sensitivity analysis that shows how revenue splits between the government and the investor (Atlantic) under stable conditions. For simplicity, we assume annual output of ~300,000 tonnes of concentrate (Atlantic projects ~3.6 tons over 12 years) and an all-in sustaining cost of ~$610/ton. We ignore financing and depreciation effects for a steady-state comparison (i.e. assuming the mine is operating at full capacity, post capital depreciation).
36. The key insight from the stable-conditions scenario is that even at the “crisis” price of $800, the project remains profitable and yields a net margin of ~$110/ton after a 10% royalty according to Atlantic’s own cost data.
37. In fact, at current spodumene prices of nearly ~$1,300, the difference between a 5% and 10% royalty is about $65 per ton. That essentially means the Minister is transferring ~$65 on every ton of lithium sold directly from the Ghanaian people to his beloved company by cutting the rate from 10% to 5%.
38. Under the 5% royalty regime, Ghana’s share of profits declines by nine percentage points at $1,500/ton, as the royalty becomes a smaller fraction of the growing margin. The question is WHY?
39. The most depressing thing is that at the $1499 price threshold the Minister has decided to HALVE Ghana’s royalty rate just to prevent a less than 10% drop in Atlantic’s profits! Essentially, he would sacrifice 50% of Ghana’s gain in royalties so that Atlantic doesn’t have to lose <10% of its profits!
40. But the biggest risks do not surface under stable conditions. It is when times are rocky or when massive redevelopment projects hit Atlantic’s profits hard that Ghana would feel the full brunt of the decision to throw away 50% of the royalties the previous government negotiated. Below we model just such a situation. In a high-stress scenario a 10% royalty delivers 50% more revenue for Ghana.
41. This is the key reason why it appears as if Activists are obsessing over royalties. It is because they are the most resilient in the State’s revenue mix from mining, which accounts for 24.3% of all domestic direct tax revenue. For example, when the gold bull run began in 2024, total mining fiscal contributions increased by 51.2% but royalties surged by 76.7% to GHS 4.9 billion.
42. That point does not become unclear until one realises that royalties are tax-deductible and thus a royalty ramp-up is partially offset by a declining base of Corporate Income Tax. Thus, investors lose less than some analysts often suggest when royalty rates go up but countries lose far more in rocky times if they negotiated a much lower royalty rate. In fact, some revenue handles like dividends have ceased to be relevant for most practical purposes in mining taxation in Ghana since mining companies repeatedly declare losses when the market sours.
43. But royalties are not the only issue that has Activists fuming.
The Minister has opened Ghana to loopholes and gaming
44. A sliding scale royalty rate mechanism cannot be effectively implemented without binding the investor to certain pricing determination controls. The Minerals and Mining (Royalty) Regulations, 2025 should have unambiguously define the reference price. It did not. Parliament must now insist that this is done either through another LI or as an addendum to the lease agreement.
45. So far, we have been using the terms “lithium price” and “lithium spodumene price” as if they are simple, but they are not. Let’s look at a couple of risks.
46. Unlike gold or oil, which are mature commodities, lithium (especially spodumene concentrate) does not have a single widely published market price (yet another reason why we can’t treat these minerals like gold). Lithium prices are typically reported by specialized commodity agencies (e.g. Fastmarkets & Benchmark Minerals) and can vary by contract.
47. For instance, Ewoyaa will produce both SC6 and SC5.5 concentrate, potentially sold on contract (likely CIF China). There is no lithium exchange price, thus transactions are often private. Huge risk: How exactly to determine the “spodumene price” for royalty purposes? Activists pushed for a Ghana Lithium Pricing Index. The Minister has rebuffed all that advice.
48. Pricing often implicates incoterms. If the royalty is based on FOB (Free on Board) Ghana, for instance, Atlantic Lithium has an incentive to inflate logistics and transport costs (which are deducted to reach FOB) to suppress the realized price below the $1,500 threshold so that they don’t pay the upper band rates.
49. Atlantic Lithium has a binding offtake agreement with Piedmont Lithium for 50% of production at “market prices”. It is pursuing more such offtake-deals to raise money to fund the mine. It will sell forward all the lithium for the first couple of years if it must.
50. Yet,Piedmont has been both a major shareholder (funding development) and the primary customer. There is an inherent structural incentive for Piedmont to purchase concentrate at the lowest possible price to maximize margins at its US-based hydroxide refineries (Tennessee/Carolina).
51. If “market price” is determined by an opaque internal formula rather than a transparent arm’s-length index, Ghana risks significant revenue leakage. The 50% offtake volume means half of Ghana’s lithium export value is subject to this related-party risk. Other off-take contracts will simply exacerbate the risk. That is why some countries have “higher of market or contract price” rules or reference pricing (e.g. Zambia for copper uses LME prices for royalties).
52. There is a “cliff-edge distortion” scenario such that:
- At $1,499/t: Royalty is 5% ($74.95).
- At $1,501/t: Royalty jumps to 7% ($105.07).
A $2.00 increase in market price triggers a $30.12 increase in tax liability. This discontinuity creates a perverse incentive for the operator to “manage” invoiced prices to stay just below $1,500. It encourages artificial suppression of reported revenue to avoid the 2% step-change.
53. A marginal rate (where 7% applies only to the amount above $1,500) or continuous sliding system that uses an averaging period to smooth volatility would have eliminated this distortion but was not adopted. This was either deliberate or due to the rushed nature of consultations.
54. Unlike gold or oil, which are mature commodities, lithium (especially spodumene concentrate) does not have a single widely published market price. Lithium prices are typically reported by specialized commodity agencies (e.g. Fastmarkets & Benchmark Minerals) and can vary by contract.
55. For instance, Ewoyaa will produce both SC6 and SC5.5 concentrate, potentially sold on contract (likely CIF China). There is no lithium exchange price, thus transactions are often private. Huge risk: How exactly to determine the “spodumene price” for royalty purposes? Activists pushed for a Ghana Lithium Pricing Index. The Minister has rebuffed all that advice.
Conclusion
So, friends, it should be very clear to you now that the Minister has an axe to grind with Activists. Given all the issues that could have been thoughtfully resolved had proper consultations been done to Ghana’s benefit, how else would you explain the Minister’s approach?