By Kizito CUDJOE
Sixty-eight years after gaining independence from British colonial rule, Ghana continues to navigate its developmental journey, overcoming military uprisings and restoring democracy.
Since 1992, our country has cemented its status as a beacon of democracy, particularly within the African subregion. Yet, despite its rich endowment of natural resources, the country’s ability to convert these assets into sustainable development remains a subject of scrutiny.
In recent years, Ghana’s discovery of lithium in significant quantities has emerged as a crucial development, aligning with the global shift toward green energy. However, despite the significance of this discovery, the country has yet to approve the extraction of the resource, hindered by political, economic, and regulatory uncertainties.
Lithium and Ghana’s renewable energy aspirations
During his first State of the Nation Address (SoNA) in 2025, President John Dramani Mahama reaffirmed his administration’s commitment to advancing Ghana’s energy transition agenda. He announced the establishment of a Renewable Energy and Green Transition Fund aimed at accelerating the country’s shift to sustainable energy sources.
“With regards to renewable energy, this administration will soon operationalize a Renewable Energy and Green Transition Fund to enhance efficiency and accelerate Ghana’s transition to renewable energy,” President Mahama stated.
“This initiative will drive investment in sustainable energy solutions, including solar street lighting, rooftop solar installations, off-grid solar systems, electric vehicle charging stations, and chargeable outboard motors.”
While the President noted broad renewable energy policies, he offered limited details on the government’s stance regarding lithium extraction. He merely noted that the government was “seizing opportunities presented by the global shift towards net-zero emissions to craft policies related to critical minerals such as lithium.”
Emphasizing value addition in mineral agreements
Emmanuel Armah-Kofi Buah, the Minister-designate for Lands and Natural Resources then, emphasized the need for a paradigm shift in mineral agreements, particularly concerning new minerals like lithium.
During his vetting by the Parliamentary Appointments Committee, Mr. Buah underlined the necessity of prioritizing local processing and value-chain integration in negotiations for new mining agreements.
“When it comes to new minerals, my strong view is that Ghana must really win in new negotiations for our new minerals and that there must be a paradigm shift in some of these agreements to ensure that the country benefits more than it has before,” Mr. Buah stated.
His comments come against the backdrop of the country’s first-ever lithium agreement with Barari DV Ghana Limited, a subsidiary of Atlantic Lithium. Signed in October 2023, the deal grants Barari DV exclusive rights to extract lithium in the Ewoyaa area of the Central Region.
The agreement, which includes a 10 percent royalty rate and a 13 percent free carried interest for the state, was lauded as a step toward securing greater national benefits.
However, it remains unratified by Parliament, triggering concerns over potential delays and missed economic opportunities.
Economic risks of delay and market volatility
Delays in ratifying the lithium agreement coincide with a period of declining global lithium prices, raising concerns about lost revenue and investor confidence. Eliasu Ali, Policy Lead for Minerals and Mining at the Africa Center for Energy Policy (ACEP), warned that further postponements could significantly impact government revenues and deter future investments.
“Our sensitivity analysis shows that a 10% change in lithium prices leads to about a 27 percent change in government revenues,” Ali explained.
“By comparison, a 10 percent change in royalty or carried interest rates only affects revenues by two percent or one percent, while a similar change in corporate income tax rates impacts revenues by five percent.”
Given that lithium prices are highly volatile, experts caution that Ghana’s hesitation could erode the project’s profitability. According to Atlantic Lithium’s feasibility study, spodumene prices are projected to decline from US$3,000 per tonne in 2025 to around US$1,500 per tonne between 2031 and 2036.
Africa Senior Program Officer at the Natural Resource Governance Institute (NRGI), Denis Gyeyir, echoed these concerns.
“Any further delays in ratifying the agreement, coupled with ongoing price declines, could dampen investor appetite—not just for this project but for other lithium ventures in the Ewoyaa enclave,” he said.
Investor confidence at stake amid calls for renegotiation
The prolonged delay has also fueled speculation about the possibility of renegotiating the agreement or seeking a new investor, a move that Mr. Gyeyir believes could harm the country’s investment climate.
“What message does that send to potential investors? Are we suggesting that every time a government changes, existing agreements can be discarded and restarted?” he questioned.
Mr. Gyeyir outlined three potential courses of action for the government: presenting the agreement to Parliament in its current form, renegotiating its terms, or replacing Barari DV with a new investor.
He warned that renegotiating the terms before parliamentary ratification could further delay the project, while replacing the investor would pose the greatest risk to Ghana’s credibility in the global mining sector.
Environmental concerns and regulatory adjustments
Beyond economic considerations, the country’s lithium project has also sparked environmental debates. Minister-designate Buah pledged to review the Environmental Protection (Mining in Forest Reserves) Regulations, 2022 (L.I. 2462), ensuring that mining activities are restricted in protected areas.
His stance was welcomed by environmental organizations like A Rocha Ghana, which previously filed a lawsuit challenging the regulations.
Daryl Bosu, Deputy National Director of A Rocha Ghana, acknowledged Buah’s commitment as a positive step. “While we advocate for the complete repeal of L.I. 2462, the Minister’s position demonstrates an understanding of the environmental risks involved,” Mr. Bosu said.
Conclusion
Ghana’s lithium reserves present a unique opportunity to position the country as a key player in the green energy transition. However, prolonged delays in ratifying the maiden lithium agreement risk eroding investor confidence, undermining economic benefits, and exacerbating market uncertainties.
The government’s renewed emphasis on value addition has received attention from stakeholders, who note that a prolonged negotiation process might lead to missed opportunities. As Ghana progresses, it will be important for the new government administration to carefully consider the country’s economic ambitions, investor confidence, and environmental sustainability to effectively leverage the lithium potential.
