Cancel Lithium agreement; it’s not in the best interest of Ghana – NDC to govt

According to the NDC, it is worthy of note, that the prevailing royalty rate of 5% was based on section 25 of the Minerals and Mining Act, 2007 (ACT 703), which provides for a royalty rate of not less than 3% and not more than 6%. 

This law, the party says, was amended by the erstwhile NDC/Mahama government, as far back as 2015 by ACT 900, which has made the Royalty rate open-ended and subject to negotiations. 

In a statement signed by the communication director, Sammy Gyamfi, the party said the prevailing industry royalty rate of 5% relates to the country’s traditional minerals such as gold, bauxite, etc. However, the Barari-Lithium agreement is the first deal for the exploitation of a Green Mineral in Ghana and, therefore, comparing the prevailing royalty rate of 5% to a 10% royalty rate for a Green Mineral like lithium, is an exercise in mediocrity. 

More importantly, the NDC thinks that the government should have opted for a flexible range of royalty rates, which takes into account the windfall profit of the company. 

This royalty arrangement according to the main opposition party has been adopted by Chile, which currently has a royalty rate range of 8% to 21% depending on certain variables. 

It added that in a similar vein, the 10% royalty rate secured by the government could have been the baseline rate, subject to an upward adjustment in cases of windfall revenue or profit by the company if government had negotiated properly.