IEA calls for creation of state-owned Ghana Lithium Company

The Institute of Economic Affairs (IEA) is advocating the creation of a state-owned Ghana Lithium Company (GLC) to ensure full domestic participation and long-term national benefit from the country’s emerging lithium industry.

In a communique, the policy institute warned that Ghana risks repeating its history of low-value mineral extraction unless it restructures ownership and processing models for lithium—particularly with the development of the Ewoyaa project in the Central Region.

IEA argued that lithium offers Ghana a rare opportunity to break away from royalty-based concession systems that have historically yielded limited value. Rising global demand for battery minerals, coupled with the high financial potential of Ewoyaa, underscores the need for a state-led approach, it said.

The think tank linked Ghana’s chronic economic weaknesses—low revenue mobilisation, high debt levels, and recurring crises—to the poor returns from the extractive sector. Current frameworks, it noted, “transfer ownership of the country’s mineral wealth to foreign companies in exchange for royalties,” a model the IEA said undermines industrialisation and sustainable development.

Citing the Ewoyaa project’s feasibility study, the institute highlighted an Internal Rate of Return of 105 percent and an estimated payback period of just 19 months—yet Ghana stands to gain only royalties and minority equity. According to IEA estimates, Ewoyaa could produce 3.6 million tonnes of spodumene concentrate over its lifespan. If processed domestically into lithium carbonate, revenues could reach about US$172.5 billion, based on current conversion factors and market prices.

“Developing the value chain becomes critical,” the IEA stressed, calling for a vertically integrated state entity to manage mining, refining, processing, and battery production. The proposed GLC, it said, should anchor full value addition in-country.

The think tank urged Parliament to halt the ratification of the Revised Lithium Agreement with Barari DV Ghana Limited, describing it as a continuation of colonial-era arrangements that fail to meet international frameworks Ghana has signed. It argued that concerns about financing are overstated, noting that foreign companies routinely leverage Ghana’s natural resources to raise capital. The Minerals Income Investment Fund’s US$33 million stake in Ewoyaa was cited as proof that domestic financing is viable.

IEA further noted that the global shift to renewable energy, electric vehicles, and digital technologies makes lithium a strategic mineral that Ghana must manage in its national interest. It cautioned against repeating past mistakes in the gold and oil sectors, where ownership and processing were dominated by foreign companies.

The communique also reviewed recent developments in global lithium markets. After soaring prices between 2021 and early 2023, lithium carbonate and spodumene prices fell sharply through 2024 and early 2025 due to oversupply and softening demand from battery and EV manufacturers. Lithium carbonate hovered between US$9,000 and US$9,700 per tonne in early 2025, while spodumene traded around US$740–US$850.

Despite the downturn, the IEA noted that medium-term prospects are positive. Many analysts expect prices to recover from 2026 as supply adjusts and demand strengthens, with some forecasts placing lithium carbonate in the US$15,000–US$20,000 per tonne range later in the decade.

The IEA concluded that Ghana must act decisively to “derive maximum benefits from the lithium discovery,” arguing that national ownership and value addition are essential to capturing long-term economic gains.