After the intense public backlash for slashing the royalty rate of Ghana’s Lithium Deal, the majority side of parliament is justifying why the country cannot charge 10% royalty, at least not now, given the current legal framework.
The current Majority in Parliament insists that charging 10%, a rate many activists and industry watchers even believed was not enough, would be illegal under existing law.
Chairman of the Lands and Natural Resources Committee, Collins Dauda, has explained that although many Ghanaians believe Parliament “rejected” the 10% royalty proposed under the previous administration, the truth is far more complex, and rooted in the law itself.
Under the previous administration, the deal between Ghana and Atlantic Lithium charged 10% royalty. However, the agreement was never ratified by the parliament until the change in government. Given the slump in global lithium prices since the time the deal was signed in October 2023, the company is now seeking a revised agreement under the current government.
A new agreement presented to the House by the Minister for Lands and Natural Resources slashes the royalty rate from 10% to 5%, a decision that has not been taken lightly by experts in the industry.
Amid the controversy, the justification for the new royalty rate is taking a new twist, a legal twist.
Why Parliament Says 10% Is Impossible – For Now
According to Collins Dauda, the Chairman of the Lands and Natural Resources Committee of Parliament, Ghana is currently bound by the Minerals and Mining Amendment Act, 2010 (Act 794), which sets the royalty rate at 5% for all mineral producers across the country.
This means that while the government may prefer a higher rate, including the much-discussed 10%, it cannot legally impose it without first amending the law.
To him, already established mining companies in the country, such as Newmont, Gold Fields, AngloGold, and others, continue to pay 5%. He says that charging Atlantic Lithium 10%, while others pay 5% creates unfairness, and more importantly, it does not align with the existing law.
In simple terms, Parliament cannot approve any agreement that contradicts the country’s own legislation. The law must change before a higher royalty can be applied.
The Previous Parliament didn’t reject 10% — The Report Never Reached the Floor
Colling Dauda also clarified a long-standing public misconception that the previous minority in the last Parliament opposed the 10%.
For the start, he says there was no report to vote on, and hence no vote happened at all.
He explained that when the former administration presented its lithium agreement to Parliament, which proposed a 10% royalty, the Minority at the time (now the Majority) raised two major concerns;
The 10% contradicts existing law, which caps royalties at 5%.
It was discriminatory because it would give Barari DV Ghana Ltd a royalty structure higher than what other mining firms were complying.
These issues made the Committee advise the Minister to revise the agreement and seek a legal amendment. Because this revision never happened, the Committee’s report was never submitted to the House.
“So anybody who says that the minority [in the previous parliament, now majority] rejected 10% is misleading the house, it is inaccurate. It’s inappropriate and it’s also misleading because the report was not, no report was presented to the house for the house to debate and ratify or not ratify. That is what it is,” he said.
New Administration, Same Legal Constraint
Interestingly, the new administration’s agreement with Barari DV Ghana Ltd takes a different approach. Instead of specifying a percentage, the contract now states that royalty will be paid as prescribed by law, and the law prescribes 5%, not 10.
This means that even if the government wants a higher rate, its hands are tied until Parliament amends the Minerals and Mining Act.
“The law has to be amended,” Dauda repeated. “Whether you like 10% or more, the law must change before any company can be bound to pay it.”
Why This Matters for Ghanaians
Lithium is expected to be one of Ghana’s most strategic minerals in the next decade. With global demand soaring, driven by electric vehicles and green technology, many citizens believe Ghana must negotiate aggressively to avoid repeating mistakes made in the gold sector.
But Parliament says no matter the sentiment or preference, royalty rates must come from law, not emotion and sentiment. The law, as it stands, says Ghana can only charge 5%.
The Majority insists that any attempt to force a 10% rate now would risk a legal challenge, undermine Ghana’s regulatory consistency, and scare off investors who rely heavily on predictable legislative frameworks.
