The Nana Addo Dankwa Akufo-Addo administration has been charged by the opposition National Democratic Congress (NDC) to revoke the lithium agreement with Babari DV.
It is important to note, according to the NDC, that section 25 of the Minerals and Mining Act, 2007 (ACT 703), which stipulates a royalty rate of not less than 3% and not more than 6%, served as the foundation for the current royalty rate of 5%.
The party claims that ACT 900, which changed this law in 2015 and made the royalty rate negotiable and open-ended, was implemented by the previous NDC/Mahama administration.
The party claimed that the country’s traditional minerals such as gold, bauxite, etc are the reason behind the current industry royalty rate of 5% in a statement signed by Sammy Gyamfi, the director of communication.
Comparing the current 5% royalty rate to a 10% royalty rate for a green mineral like lithium is a meek exercise, though, as the Barari-Lithium agreement is the first agreement for the exploitation of a green mineral in Ghana.
More importantly, the NDC believes that a flexible range of royalty rates that account for the company’s windfall profit should have been chosen by the government.
As per the main opposition party, Chile has accepted this royalty arrangement. Currently, the royalty rate varies from 8% to 21% based on specific factors.
In a similar spirit, it was stated that had the government bargained effectively, the 10% royalty rate that it had managed to secure might have served as the baseline rate, subject to an increase in the event that the company generated windfall profits.
Meanwhile, Business executives Mr. Fui Tsikata and Kofi Ansah assert that the state has received fair compensation for the agreement the government recently signed with Barari DV Ghana Limited to mine lithium at Ewoyaa in the Central Region.
The two evaluated the terms of the transaction and decided whether it should be rejected completely or improved upon in a statement that was made public in Accra on Tuesday.
