JM’s Government Swallows A Bitter Pill …Withdraws Controversial Lithium Mining Lease Agreement From Parliament After Approbating & Reprobating For Months

The sudden royalty posture of the governing National Democratic Congress (NDC) on the Ewoyaa Lithium deal has opened a Pandora’s box about public trust in the government, as the party appears to be retreating from its long-held position.

Though the controversial new contract between the government and Barari DV Ghana Limited was withdrawn from Parliament yesterday by Alhaji Yusif Sulemana, Deputy Minister for Lands and Natural Resources and industry players are still worried that the government would even send such a contract to parliament for ratification.

Barely a year ago, while in opposition, the NDC fiercely criticised the Akufo-Addo–Bawumia administration’s negotiated 10% royalty rate for the Ewoyaa Lithium Project between the Government of Ghana and Barari DV Ghana Limited.

They called the 10% rate mediocre and far below what Ghana deserved for such a high-value green mineral.
At a press briefing at the time, NDC Communications Officer, Sammy Gyamfi, argued that the 2015 amendment to the Minerals and Mining Act permitted Ghana to negotiate any royalty rate above 6%, giving the government full flexibility to demand a more competitive rate.

Sammy Gyamfi insisted that lithium should not be compared to gold, which attracts a 5% royalty, because critical minerals command higher global rates and require modern royalty frameworks.

He cited Chile, where lithium royalties range from 8% to 21% depending on profitability, as a model Ghana should have followed.
The NDC stressed that 10% should have been only a baseline, with structured provisions for upward adjustments in the event of windfall profits.

Without such mechanisms, they warned, Ghana risked losing significant revenue from its first major venture into the lithium value chain.

The party, therefore, urged Parliament not to ratify the deal until the royalty structure and other fiscal components were renegotiated to safeguard the national interest.
They further questioned government claims of 30% Ghanaian participation in the project.

“Beyond Ghana’s Free Carried Interest of 13% and the wholly inadequate 6% equity acquired by MIIF, there are no specific provisions in the lease agreement that provide, with certainty, a Ghanaian participation rate of 30% in the foreseeable future,” the NDC stated.
They also raised concerns about an unexplained 4.4% equity stake allocated to so-called “Previous Land Owners,” demanding full disclosure of the identities of the beneficial owners of that stake in the interest of transparency.

For these reasons, the NDC dismissed the deal as fundamentally flawed.“In the face of all these pertinent issues particularly the non-existence of a feasibility report and the absence of mandatory provisions for local processing, the NDC is of the view that the Ghana–Barari lithium deal is not in the best interest of Ghana,” the party declared.
Accordingly, they insisted that Parliament should not consider ratifying the lease agreement until all issues were satisfactorily addressed.

NDC Reverses Position After Taking Office

However, barely a year after assuming power, the NDC government has quickly reversed its stance on the Ewoyaa Lithium deal, raising sharp questions about credibility and consistency.

In a surprising turn of events, the Minister for Lands and Natural Resources, Emmanuel Armah-Kofi Buah, presented what he described as a revised deal to Parliament during the 13th sitting of the 3rd Meeting of the 1st Session of the 9th Parliament.
Mr. Buah explained that at the time of the original agreement, global lithium prices were around US$3,000 per tonne, but had since fallen to about US$630 putting the project’s viability at risk.

“The company appealed that if they were to go forward, certain key provisions must be looked at,” he told lawmakers.
He revealed that three key elements had been renegotiated: royalty rate adjustment, VAT deferral on capital inputs, and the feasibility of the Saltpond transshipment facility with Cabinet’s approval. The Speaker of Parliament, Alban Bagbin, subsequently referred the revised lease to the Parliamentary Select Committee on Lands and Forestry.

Africa Policy Lens Raises Red Flags

Despite the government’s justification, the Africa Policy Lens (APL), a policy think tank, has sharply criticised the NDC’s decision to slash Ghana’s lithium royalty rate from 10% to 5%. The group warns that the move could hand over as much as US$630 million in potential state revenue to Barari DV Ghana Limited—an economic loss Ghana can ill afford.

APL argues that halving a previously agreed and Cabinet-approved royalty rate amounts to a massive financial concession with no reasonable economic basis. They note the irony that figures within the current NDC administration who previously attacked the 10% rate as too low are now advocating for a 5% rate, sparking disbelief among policy experts and civil society.
The think tank further debunked the government’s explanation that declining lithium prices justify the cut.

According to APL, royalty rates are typically insulated from short-term market volatility. Countries with sliding-scale royalty systems still maintain protective minimum thresholds. Zimbabwe, for example, responded to price declines by introducing an additional 2% lithium levy, not by reducing royalties.
APL supported its argument with strong financial analysis. Barari DV’s Ewoyaa project remains highly profitable even under current price pressures.

With all-in sustaining costs estimated at US$610 per tonne and spodumene prices ranging between US$1,000 and US$1,195, the company stands to make 40–62% pre-royalty margins.

Using projected output of 350,000 tonnes per year over a 12-year mine life, APL calculates that reducing the royalty rate from 10% to 5% would cost Ghana between US$210 million and US$630 million in foregone revenue, money that would be “effectively ceded to the company, with no mechanism for recovery.

The think tank even contends that a 30% royalty rate would not jeopardise the project’s viability under the current price regime, making the original 10% rate not only defensible, but economically prudent.

A Growing Controversy
As public concern intensifies, critics warn that the revised royalty rate risks becoming one of the most contentious economic decisions of the Mahama administration.

Many fear it represents an avoidable and costly concession—one that threatens to undermine public confidence and reignite debates about policy reversals, transparency and the protection of Ghana’s natural resource wealth.

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