Controversies surrounding the Ewoyaa Lithium Mining Lease: Additional feedback [Article]
There are three points on which we want to make feedback extra to these in our assertion of yesterday, Monday, 11 December 2023.
The first two relate to options made by Bright Simons (which he says are shared by some CSOs) about formulae for growing royalty and state fairness for tasks which obtain larger than prescribed charges of return for the investor. We assume each options have benefit in precept and want to tackle them briefly.
We are in broad settlement with the suggestion that the royalty price of 10% be a minimal, with a sliding scale system which captures elevated profitability alongside the prescribed scale. But we might suggest that, for ease of administration, the variation needs to be merely primarily based on worth slightly than on working margin. That is, the royalty price will fluctuate with the market worth of say, lithium carbonate, however by no means to fall under 10%.
We additionally agree with the suggestion {that a} system be labored out by which the federal government has an possibility to extend its fairness curiosity within the mining firm on beneficial phrases after the buyers have recouped their funding.
The third problem is one we raised within the final paragraph of yesterday’s assertion, although not intimately. There we proposed that we should always do for lithium and different inexperienced minerals as was completed within the Seventies concerning the bauxite deposits at Kyebi and Nyinahin. Then authorities with the help of Hungary and Russia (the Soviet Union then) had feasibility research performed on the deposits. Those research established reserves, ore metallurgical traits and different related knowledge, and concluded that commercially possible tasks might all be inbuilt Ghana primarily based on the bauxite deposits. The tasks included alumina and aluminium steel manufacturing crops, steel fabrication and different finished-product crops (comparable to that of Aluworks).
With the stories of these feasibility research the then authorities’s bargaining place was so strengthened that it was in a position to institute the coverage that no uncooked bauxite from these two deposits can be allowed to be exported; that no less than the primary stage conversion from bauxite to alumina should be completed in Ghana. No doubt it’s on account of presidency being the proprietor of these feasibility knowledge that at this time the federal government is ready to preserve the coverage of “no export of raw bauxite” in relation to these deposits.
That is the form of coverage that we predict can be most helpful for the nation in relation to lithium and different inexperienced minerals, regardless of the type of settlement below which the useful resource is mined. In that case we might be in a a lot stronger bargaining place in negotiations with potential buyers. This can be particularly so in relation to downstream processing of merchandise which, other than including worth, permits the native mining business to be extra totally built-in into the nationwide economic system.
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