Ghana anxious lithium price slump will derail maiden project
13/09/2024 14:57
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Atlantic Lithium says awaiting parliament's ratification
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Minerals commission head fears project could be halted
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Sluggish demand and lithium price slump hit projects
By Maxwell Akalaare Adombila
ACCRA, Sept 13 (Reuters) - Ghana is concerned that a
slump in global lithium prices could halt its first mining
project in the south central town of Ewoyaa, the head of the
country's mining sector regulator told Reuters.
In October 2023, Ghana, a West African gold and cocoa
producer, granted a 15-year lease to Australia-based miner
Atlantic Lithium A11.AX to establish the nation's first
lithium mine by the fourth quarter of 2024.
The company received environmental approval for the project
on Thursday, but says a delay in parliamentary ratification of
the lease was hampering its ability to meet the construction
timeline and secure higher prices.
Martin Ayisi, head of Ghana's Minerals Commission, said the
Ewoyaa Project that envisaged annual lithium production of
around 360,000 tons risked being halted.
"It will cost Atlantic lithium around $650 to produce a ton
of lithium concentrate and with the price just above $700, it's
worrying for us," he said, adding that if the downturn
continues, the project may get delayed further like other
lithium projects globally.
The price of lithium, used in batteries for electric
vehicles, has collapsed over the last two years as new supply
coincided with weaker-than-expected demand for electric
vehicles.
As more alternatives to lithium in the EV and battery
sectors emerge, Ayisi said time was of essence for the project
to pay off.
"It's not just a race against the price; it's a race to mine
at a time lithium is commercially needed."
Ahmed-Salim Adam, Atlantic Lithium's general manager, told
Reuters that the mine's construction, initially planned to start
in July has been delayed to first quarter of 2025 because of
lack of parliamentary ratification.
The ratification was delayed as lawmakers sought broader
consultation, aiming to avoid repeating mistakes made during
approvals of new gold mining projects.
Adam said the company would also need an operation permit
from the sector regulator before it can start construction,
which could take about 22 months to complete.
"It's critical that we get ratification quickly else our
investors' patience is waning, especially when there are more
endowed jurisdictions in the so-called lithium triangle and Mali
next door," said Adam.
(Reporting by Maxwell Akalaare Adombila
Additional reporting by Christian Akorlie
Editing by Bate Felix and Tomasz Janowski)
((MaxwellAkalaare.Adombila@thomsonreuters.com; +233205362647;))