In recent weeks, the national conversation around Ghana’s lithium sector has been shaped by mixed interpretations, political commentary, and understandable public frustration. The tension largely stems from the Parliamentary Select Committee on Lands and Natural Resources recommending an amendment to the Minerals Act to increase mineral royalties from 5% to 10%.
This has stirred confusion because the previous administration had already negotiated a 10% royalty specifically for lithium, double the standard 5% applied to most minerals in Ghana. Many citizens now want clarity:
If lithium already had a 10% royalty, why are discussions resurfacing about moving from 5% to 10%?
Are we receiving only 5% or 10%? And is royalty the only revenue Ghana earns?
It is crucial to clarify the facts to settle the confusion.
- Why 5% and 10% Are Being Mentioned at the Same Time
Under the current Minerals Act, the general royalty rate for minerals such as gold, manganese, and bauxite is 5%. Lithium, however, is classified as a strategic mineral. Recognising its importance, the previous government negotiated a 10% royalty rate, reflecting global best practice and the rising value of lithium in the clean energy transition.
Therefore, the Committee’s proposal to move the Act from 5% to 10% does not mean Ghana was receiving only 5% from lithium.
In reality:
5% is the legal baseline in the Act.
10% is the negotiated lithium royalty.
The Committee is simply recommending that the law be updated so that the 10% becomes the minimum for strategic minerals, rather than relying on special-case negotiations. This overlap is what created the public confusion.
- Royalty Is Not the Only Revenue Ghana Earns
Public concern has intensified partly because many assume the 5% or 10% royalty is Ghana’s total benefit. That is incorrect.
A lithium project generates multiple revenue streams. Royalty is just one. Ghana earns from:
A. Royalty
A guaranteed tax on every ton of lithium sold. For lithium, this is 10%, not 5%.
B. Free Carried Interest (13%)
Ghana automatically owns a share of the project without paying for it.
C. Additional Equity Through MIIF
The state can buy more shares and receive dividends.
D. Corporate Taxes (up to 35%)
Paid when the company becomes profitable.
E. Value Addition and Local Processing
This ensures jobs, technology transfer, and higher export value.
F. Community Development Agreements
Support for infrastructure, environmental management, and livelihoods.
Debating only the royalty rate overlooks more than 60–70% of Ghana’s potential value from the sector.
- Why Ghanaians Are Right to Demand Transparency
Lithium is unlike gold. Its global demand is projected to peak over the next two to three decades due to electric vehicles, large-scale battery storage, and renewable energy systems. Ghana cannot afford to repeat past mistakes where valuable minerals were exported cheaply while host communities remained underdeveloped.
Citizens are justified in asking:
Why should any administration accept less than 10%?
What changed, and what is the rationale?
Where is the full agreement for public scrutiny?
These are patriotic and necessary questions.
- Moving Forward With Clarity and Confidence
The key point is this:
Ghana’s lithium royalty is 10%, but the Minerals Act still reflects a 5% baseline.
The Committee’s proposal aims to align the law with what has already been negotiated.
What the country must demand now includes:
Clear communication from the government
Full disclosure of all lithium agreements
Stronger legal safeguards for strategic minerals
Protection of communities in Ewoyaa and the surrounding areas
Ensuring Ghana benefits from equity, taxes, and local processing—not just royalties
Lithium presents a major national opportunity. With transparency, consistency, and citizen engagement, Ghana can secure long-term value that surpasses what has been achieved with gold or oil.
Conclusion
The debate over 5% versus 10% has overshadowed the broader picture. Ghana already secured a 10% royalty for lithium, but the Minerals Act still stipulates a 5% general rate. The Committee’s proposal seeks to harmonise the law with existing negotiated terms and set a stronger national standard for strategic minerals.
What matters most is not the confusion around percentages but Ghana’s ability to capture the full economic value of lithium through royalties, equity, taxes, processing, and community development. With clarity and transparency, Ghana can transform its lithium potential into sustainable national prosperity.
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By Kwegyir Essel Isaac, MSc (Oil & Gas Accounting), Energy Institute (UK), Engineers Australia
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