Atlantic Lithium is defending its request for a renegotiation of the Ewoyaa Lithium Project lease agreement despite criticisms against the move.
General Manager of Atlantic Lithium, Ahmed Salim Adam, explains that it is never the intention of the company to shortchange the state, insisting that a dramatic crash in global lithium prices has made the review unavoidable.
Speaking to The High Street Journal on the sidelines of the Africa Extractives Media Fellowship, the company’s General Manager said the move is purely driven by economic realities.
He explained that the tumble in the global lithium prices has a major smack on the feasibility and profitability of the project, hence the need for a review.
Speaking to the numbers, Ahmed Salim Adam noted that at the time the lease was signed, a tonne of spodumene of lithium was $3200. However, the agreement used $1500 for the agreement. A few years down the line, the price has dropped to about $850 to $900 a tonne.
To him, this significant drop in the price of the commodity virtually means the market has collapsed, and hence makes the review a necessity.
“Look, the reality is that the market is collapsed. As of 2023, when this lease was signed, the price was $3,200 a tonne of spodumene. We used about $1,500 for our feasibility study. Today it’s at $850 to $900 a tonne,” he narrated.
He continued that, “It’s a no-brainer to know that you have to take a second look at the financials. It’s a project that the government has a significant interest and stake in. So we said, look, let’s have a conversation about it.”
The company’s argument reflects growing concern among mining investors globally as lithium prices continue to tumble after the post-pandemic surge. The mineral, once hailed as the “white gold” powering the clean energy transition, has seen prices plunge by more than 70 percent due to oversupply and slower-than-expected electric vehicle uptake.
But not everyone buys the company’s argument. Some civil society organizations (CSOs) in the natural resource governance space maintain that the Ewoyaa Project remains feasible even at current prices.
They argue that the feasibility study already factored in price fluctuations and that Ghana must ensure the country’s interest is not shortchanged in the name of “market corrections.”
For now, Atlantic Lithium says it is committed to ensuring that the project succeeds for the country to reap its benefits as well as the local communities. It, however, clarifies that it is not walking away from the deal but rather seeking a fair recalibration that reflects current market conditions.
