New Lithium Deal Sparks Outrage – Jinapor

Samuel Abu Jinapor A heated debate has emerged in Parliament regarding the government's choice to renew a lease contract with Barari DV...

Samuel Abu Jinapor

A heated debate has emerged in Parliament regarding the government's choice to renew a lease contract with Barari DV Limited for the extraction of Ghana's lithium reserves.

The ex-Minister of Lands and Natural Resources, and Member of Parliament for Damongo, Samuel Abu Jinapor, has claimed that the current government is entering into a less favorable agreement than the one made by the previous Akufo-Addo administration during the Eighth Parliament, an arrangement that the current National Democratic Congress (NDC) government had strongly criticized in the past.

At a press conference following the submission of the document to Parliament, Mr. Jinapor referred to the new deal as "a significantly worse type of agreement compared to the one finalized by the Akufo-Addo government," maintaining that the current terms fail to align with the country's best interests.

At that time, our friends from the other side claimed the agreement we reached was not in the country's best interest," he remembered, adding, "They stated they could achieve a better outcome if given the chance. Today, however, they have come back to Parliament with a deal that is significantly worse than what they previously turned down.

He claimed that the previous lease during the Akufo-Addo administration offered some of the most favorable conditions globally, featuring a 13% free carried interest, exceeding the mandatory 10%, along with a 6% equity stake and 6% royalty for the Minerals Income Investment Fund (MIIF), and a condition that the company must list 30% of its shares on the Ghana Stock Exchange to encourage local involvement.

He stated that the government had also obtained community royalties and extra advantages "in addition to what the law mandated," showcasing its dedication to making sure that the extraction of lithium resources provided advantages to Ghanaians.

The MP from Damongo voiced worry that the existing agreement reduces the royalty rate, even though the government stated it had been "readjusted." He pointed out that "on the surface," the new conditions place the nation in a less favorable position than previously.

"We will have a chance to thoroughly review this agreement, but a quick look indicates that this deal is significantly worse," Mr. Jinapor stated.

"What has altered? If anything, the conditions are more unfavorable. Ghanaians would have been better off if the earlier agreement had been approved," he suggested.

He urged President John Dramani Mahama to review the agreement and, if required, instruct the Lands and Natural Resources Ministry to return to the negotiation table.

"The natural resources of Ghana, such as lithium, belong to the citizens and are managed by the President on their behalf. We aim for the use of these resources to benefit the people of Ghana. If they present an improved agreement with more favorable results, we will back it. However, this particular one is inferior," Mr. Jinapor stressed.

Minister’s Defence

Nevertheless, the Minister of Lands and Natural Resources, Emmanuel Armah-Kofi Buah, dismissed the opposition's allegations, stating that the government had implemented a "proportional royalty" system to ensure the project is appealing to investors while also advantageous for the state.

He stated that the new framework enables the royalty rate to increase alongside rising global lithium prices, a system intended to secure sustained profits while allowing for the swift start of operations.

"We reached an agreement with the company to begin with a 5% royalty to get the project off the ground. As prices increase, the royalty will increase to 10%. There are no changes in place. We are just ensuring that we benefit from the project for the good of the community and the nation," Mr. Buah explained.

He also mentioned that with lithium prices currently approximately $675 per ton, keeping a flat 10% royalty rate would have made the project unprofitable and discouraged investment.

"If someone is planning to produce lithium at $630 per tonne and their expenses amount to $675, clearly no one would be willing to invest. That's the reason the government is implementing this adaptable framework," he stated.

The minister stated that the new agreement would generate employment opportunities and boost industrial growth, especially in the Mankesim region, where land has already been secured and local populations have been impacted.

"We are considering jobs, sectors, and the future prospects. The choice we've taken is in the best interest of the people," Mr. Buah emphasized.

Although the Minister defended it, the Minority argues that the updated terms do not meet what Ghanaians are entitled to from such a vital mineral.

Mr. Jinapor stated that the opposition would conduct "intense examination" of the document once it was referred to Parliament's Committee on Mines and Energy.

The lithium initiative, the country's first large-scale effort in the mineral essential for electric vehicles and green energy, has turned into a political controversy, with both leading parties blaming each other for not safeguarding the nation's interests.

Currently, the future of the Barari DV Limited lease depends on Parliament's committee system, yet the discussion has already revived larger concerns regarding how Ghana handles its mineral resources in the age of renewable energy.

By Ernest Kofi Adu, Parliament Building

The post New Lithium Pact Unfavorable – Jinapor appeared first on DailyGuide Network.

Provided by SyndiGate Media Inc.Syndigate.info).