Lithium mining: Rwanda is being more strategic than Ghana – Bright Simons

Vice President of IMANI Africa, Bright Simons, has waded into the conversation regarding Rwanda’s latest lithium mining deal with British-Australian mining company, Rio Tinto.

He likened the deal to that of Ghana, which recently signed an agreement with Barari DV, also an Australian company, to mine lithium deposits in the Central Region.

In a post shared via LinkedIn, Bright Simons suggested that instead of giving out contracts especially for mineral resources, countries must be “consistent about national strategy and to set the ground conditions for holistic optimisation of the country's potential instead of banking on piecemeal concessions in an ad hoc fashion through narrow dealings with specific investors.

“Especially those labouring under considerable material constraints. Well, here is a bit of news from a setting not too dissimilar to Ghana's."

Bright Simons continued, “Rwanda, like Ghana, has no lithium track record. Yet, it has just signed Rio Tinto, a mining behemoth, if ever there was one. And it is clear from the broad contours of the engagement that a strategic handshake is underway in Kigali.

"And that a clear-eyed, long-term, undertaking is envisaged that is unlikely to be driven or sidetracked by current headwinds in the lithium market. Yes, every mining development is risky, so it is entirely possible that nothing much may result from this handshake between Kigali and Rio Tinto.”

He, however, noted that the development is nonetheless significant as it shows that with a lucid marketing and strategic posture, big-time mining investors can be attracted to the greenest of mining prospects in the most frontier of geographical basins.

See the full post below:

In the recent spate of civil society advocacy for Ghana to get the best lithium mining deal with investors possible, some of us have highlighted the lack of financial strength of the current slate of investors in the Ghanaian terrain.

Many eminent gurus have, in response, told us that a country with no track record in lithium can only attract wildcatters, mining juniors, hustlers, and, when luck is really down, even speculators. The general principle being that these pathfinders will then blaze the trail for bigger players to follow as opportunities are proven and the jurisdiction matures.

That argument has been made, for instance, in respect of how Kosmos "opened up" Ghana as a new hydrocarbons frontier. The truth, though, is that the Kosmos affair is not the best case study of the pathfinding model since Ghana eventually failed to attract the majors because of strategic missteps (the story of how and why ExxonMobil abandoned Ghana shall be told another time.)

Throughout all the arguments and nuances, some of us have insisted that the pathfinding model should not subsume a country's strategic prospects under the business constraints of specific investors.

A country should of course maintain a healthy and conducive business climate for investors, whether local or foreign. But, in the natural resource space, it helps to be consistent about national strategy and to set the ground conditions for holistic optimisation of the country's potential instead of banking on piecemeal concessions in an ad hoc fashion through narrow dealings with specific investors. Especially those labouring under considerable material constraints.

Well, here is a bit of news from a setting not too dissimilar to Ghana's. Rwanda, like Ghana, has no lithium track record. Yet, it has just signed Rio Tinto, a mining behemoth, if ever there was one. And it is clear from the broad contours of the engagement that a strategic handshake is underway in Kigali. And that a clear-eyed, long-term, undertaking is envisaged that is unlikely to be driven or sidetracked by current headwinds in the lithium market.

Yes, every mining development is risky, so it is entirely possible that nothing much may result from this handshake between Kigali and Rio Tinto. The development is nonetheless very significant because it shows that with a lucid marketing and strategic posture, big-time mining investors can be attracted to the greenest of mining prospects in the most frontier of geographical basins.

MA/AE

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