Lithium Lease Delays Threaten Ghana’s Economic Gains
- Resource experts warn that these delays could result in significant economic losses
- ACEP's analysis highlights the economic risks associated with the delay
- Chiefs from the mining area have expressed concerns about the impact on their livelihoods
The ratification of Ghana’s first-ever lithium agreement, signed in October 2023, faces uncertainty due to parliamentary delays. Resource experts warn that these delays could result in significant economic losses for the country.
“What matters is ensuring material scrutiny that justifies this delay,” says Eliasu Ali, Policy Lead for Minerals and Mining Policy at the Africa Centre for Energy Policy (ACEP). “Ghana must optimize economic benefits from the lithium agreement while advancing value addition.”
ACEP’s analysis highlights the economic risks associated with the delay. “A 10 percent change in lithium prices leads to a 27 percent change in government revenues,” Ali explains. Given the volatile nature of lithium prices, delays could result in significant missed revenue opportunities.
Denis Gyeyir, Africa Senior Programme Officer at the Natural Resource Governance Institute (NRGI), echoes these concerns. “Any further delays, coupled with ongoing price declines, could dampen investor appetite.” NRGI analysis indicates that up to 70 percent of government revenue from the Ewoyaa project depends on profitability.
The delay also has significant social implications. Chiefs from the mining area have expressed concerns about the impact on their livelihoods, as farming and other economic activities have been restricted.
While Ghana is not a major player in the global lithium market, the success of efforts to find alternative materials to lithium-ion batteries will impact lithium demand. “Ghana must be mindful of these dynamics and its effects on the country’s ambitions around lithium,” Gyeyir emphasizes.
