Lithium deal: Why is approval of recommendation letter, mining lease bearing same date? - Tamale Central MP quizzes

The Member of Parliament for Tamale Central, Ibrahim Murtala Muhammed, has raised concerns over the lithium mining deal between the government and Barari DV Ghana Limited, pointing out that the approval of the recommendation letter and the mining lease bear the same date.

According to him, this raises questions about the haste with which the deal was finalised.

“Another issue that indeed is making people wonder is the rush by the ministry to do what they did. If you study, the approval of the recommendation letter by the minister and the mining lease agreement reveal that they both bear the same date. So, is it that they looked at the approval of the letter and the lease on the same day?" he quizzed in an interview on Metro TV on December 12, 2023.

Muhammed went on to criticise the government's assertion that the lithium deal is the best in the world.

He argued that while Ghana negotiated an increase in royalties from 5% to 10%, the amended Minerals and Mining Act 703 (2006), specifically in section 25, allows the ministry to prescribe the royalty rate only based on negotiations.

“For him to say that this argument is the best in the world is where I find problematic. In Ghana here, you can say that on the basis of the fact that, we have been able to negotiate to increase the royalties from 5% to 10%.

“But it is important for us to look at the amended Minerals and Mining Act 703 (2006), specifically section 25. It says that the ministry may prescribe the royalty rate. There isn't any specificity as to what the royalty rate will be, it depends on what the ministry describes based on the negotiations. It is important for us to understand that this will be a pioneer lease of lithium that we are having with any entity. Therefore, you cannot arrange a particular royalty rate with one entity or company and then another company comes to do the same and then you want to have a variation,” he stated.

The MP further pointed at the importance of considering section 110 (u) of the same Act, which empowers the minister to regulate and prescribe a specific royalty rate through a Legislative Instrument (LI).

Ibrahim Murtala Muhammed argued that the minister's provision of a 10% royalty rate is not specific and that utilising an LI would allow for flexibility in determining rates for different companies.

This, he believes, will get Ghana better deals in leasing out lithium to companies who are interested in the mineral in the future.

“That is why civil society organisations and other people are calling that the minister should have looked at the same Act, specifically section 110 (u) which states that; among others, the minister, can or may regulate through Legislative Instrument (LI), prescribe a specific royalty rate. So, what the minister has provided, that is the 10% is not specific.

"The same section provides the minister with the opportunity to bring an LI to parliament in terms of determining a specific rate such that if you have another company coming in to engage in the same venture then you can get a specific rate that every company that comes has a different rate. For me, not doing this is problematic,” the MP added.

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