Ghana approves first lithium mine with eye on EV boom
Ghana's government has greenlit its inaugural lithium mine, operated by Barari DV Ghana, a subsidiary of Australia's Atlantic Lithium. Located in Ewoyaa on the country's southern coast, this mine is a significant move for Ghana as it capitalizes on the global shift towards electric vehicles (EVs).
The Ministry of Lands and Natural Resources granted a 15-year lease for this project, recognizing its potential. Ghana upped the royalty rate from 5% to 10% and increased the state's stake from 10% to 13%. Furthermore, Ghana's Minerals Income Investment Fund will acquire an additional 6% in the mining operation and 3.06% in Atlantic Lithium.
Additionally, the company will establish a lithium processing plant, aiming to retain the economic benefits that were previously sent to China for processing. This move signifies Ghana's intent to be a part of the growing electric vehicle battery supply chain.
Key Takeaways
The shift towards EVs in the auto industry, driven by impending bans on fossil-fuel cars, has led to a surge in both lithium prices and demand. Lithium, a highly sought-after mineral, plays a crucial role in manufacturing electric cars (which rely on lithium-ion batteries) as well as in the production of several electronic devices. Currently, China dominates the lithium supply chain, being the world's top refiner and a leading producer. However, Western governments and international companies view Africa's lithium reserves as a significant opportunity. Africa holds over 30% of global mineral reserves, including 5% of naturally occurring lithium ore reserves. This presents African countries with a unique chance to meet the increasing global demand for lithium while bolstering their own economies. We are already witnessing the launch of large-scale projects aiming to establish Africa as a global lithium hub, aligning with the energy transition trends. These projects are backed by substantial investments from mining companies spanning from Australia to China.
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