The inaugural lithium lease with Barari DV Ghana Limited, which has come under public scrutiny, will be submitted to parliament by the first quarter of 2024, Minister of Lands and Natural Resources, Samuel Abu Jinapor, has hinted.
Before it goes to parliament, however, the deal will have to be approved by Cabinet, the minister said in a direct response to calls by the Institute of Economic Affairs (IEA) to subject the deal to a legislative probe. Mr. Jinapor reiterated that the terms of the lease require ratification by parliament and due procedure is being adhered to.
It will be recalled that the IEA – led by former Chief Justice, Sophia Akuffo – expressed fears over the lithium agreement. The IEA held that per Article 268 of the 1992 Constitution, for a contract to exploit Ghana’s natural resources to be legally effective it must be ratified by parliament.
The former Chief Justice argued that in modern mining practices, the extraction of mineral resources is either covered by a joint-venture agreement whereby the host country takes a stake in the mining company or a service contract.
But reacting to IEA’s concerns during a press briefing in Accra, Mr. Jinapor said: “The issue of ratification for the mining lease, which has been raised by several people, has never been lost on us. This is expressly provided for in the Mining Lease granted to Barari DV Ltd. Specifically, Clause 1(e) of the Lease.
“This mining lease is subject to ratification by parliament in accordance with Article 268(1) of the Constitution and section 5 (4) of Act 703. Upon execution of this mining lease, the minister shall cause the mining lease to be laid in parliament for ratification,” he said.
“By the very terms of the lease, ratification by parliament is a condition precedent. As the Supreme Court explained in the Republic v High Court, (General Jurisdiction 6), Accra; ex parte Attorney-General (Exton Cubic – Interested Party) (Unreported, Civil Motion No. J5/40/2018, dated 31st July 2019), an unratified mining lease confers no enforceable rights – and government has always been mindful of this decision,” he stated.
Explaining why the deal has yet to be submitted to parliament, he said before such agreements can be laid before parliament they must go through some processes – including securing Cabinet approval. “The processes are ongoing, and once completed the agreement will be laid before parliament for consideration and ratification.”
Meanwhile, contrary to calls for all mining leases to be subjects of a competitive tender process, Mr. Jinapor said international best practice requires that where a company undertakes exploration and makes a commercial find of minerals, the company is entitled to a right of first refusal in granting a mining lease – subject to regulatory compliance.
He stated this international best practice is given legal backing by section 39 (2) of the Minerals and Mining Act, 2006 (Act 703).
However, he said, use of the tender process is only feasible when there already exists geological data and the state is looking for partners to go straight into mining. “Regulation 258 (1) of the Minerals and Mining (Licencing) Regulations, 2012 (L.I. 2176), which deals with the grant of mineral rights by tender, gives three instances under which such a process may be used,” he added.
Among other things, he noted that the historical lack of resources to undertake exploration has compelled the state to depend on private companies undertaking exploration for most minerals; which entitles them to the grant of mining leases without going through any tender process.
Moreover, he said, the private sector’s participation – both foreign and Ghanaian – is in accord with best international practice, verifiable by several mining countries across the world.
On the calls to establish a Ghana Lithium Company to mine lithium and develop its value chain from mining to battery production, he contended that it is not feasible for various reasons. One of the significant reasons, he said, is that determined volumes of the mineral deposits are insufficient for such an option.
“It will be recalled that the Policy Statement presented to parliament last year considered the option of establishing such an entity, along with the concept of a Ghana Integrated Aluminium Development Corporation (GIADEC) and Ghana Integrated Iron and Steel Development Corporation (GIISDEC),” he said.
Source: thebftonline.com