【SMM Analysis】Ghana's First Lithium Mine Development Sparks Tax Concession Debate

As Ghana prepares to develop its first lithium mine at Ewoyaa, a heated debate over tax concessions for Atlantic Lithium has intensified, raising concerns about long-term revenue protection. The Natural Resource Governance Institute (NRGI) has warned that permanent fiscal breaks could shortchange Ghana if lithium prices rebound, urging Parliament to scrutinize the company’s revised feasibility claims before approving the mining lease.

The dispute centers on two key demands from Atlantic Lithium’s Ghanaian subsidiary, Barari DV: slashing royalty rates from 10% to 5% and revising corporate tax terms. The company argues that plunging lithium prices have slashed its post-tax return rate from an initial projection of 94% to just 13.6%. However, NRGI’s independent analysis suggests the project could still yield a 28% return even at current prices.

"This is a critical moment for caution," said an NRGI economic analyst. "Spodumene prices could rebound to $1,264 per tonne by 2028—nearly double today’s lows. Locking in permanent tax cuts now would cost Ghana future price windfalls." The institute recommends adopting price-linked tax mechanisms instead of fixed concessions, alongside anti-tax avoidance clauses and stronger local benefit safeguards.

The negotiations have been delayed due to Ghana’s government transition, which NRGI sees as an opportunity to rebalance investor and national interests. The Ewoyaa lithium mine, a test case for the country’s strategic mineral development, could set a precedent for managing future critical mineral projects. Ghana’s parliamentary mining committee has already requested additional cost breakdowns from the company, stressing that "fair returns for citizens from non-renewable resources must be guaranteed."