Atlantic Lithium gets go-ahead for Ghana’s first battery metal mine

Atlantic Lithium (ASX: A11) has the green light to develop Ghana’s first lithium operation after its local subsidiary received a mining permit for its flagship Ewoyaa project.

The 15-year permit allows the Australian miner’s unit Barari DV Ghana Ltd. to start building a lithium mine in the country’s Cape Coast region, around 100km southwest of capital city Accra. 

The decision comes after Atlantic Lithium’s almost six years of exploration and is part of Ghana’s strategy to tap into the global move towards electric vehicles (EVs) and renewables.

The Ministry of Lands and Natural Resources has increased the royalty rate to 10% from the standard 5% and the state’s interest in the project to 13% from 10%, it said in a statement.

As part of the deal, Ghana’s sovereign wealth fund, the Minerals Income Investment Fund, will acquire 6% in Ewoyaa and 3.06% in Atlantic Lithium, which will be required to list on the Ghana Stock Exchange.

The company will work on developing a lithium processing plant to maximize the economic benefit of a mineral it has often shipped to China for processing, the ministry added.

“The mining lease is a major endorsement of the viability of the project and a landmark de-risking milestone in its advancement towards production,” Atlantic Lithium chairman Neil Herbert said in a statement. 

“The government of Ghana, which is eager to build upon its mining history that spans back over a century and diversify away from its long-standing gold production, has remained incredibly cooperative throughout our application process and we wholeheartedly welcome their support.”

Half of the lithium produced at Ewoyaa will be sent to a refinery of U.S.-based Piedmont Lithium (NASDAQ: PLL; ASX: PLL), which is the Australian firm’s second-largest shareholder and has agreed to provide most of the funds for building the mine. 

Atlantic Lithium aims to produce a total of 3.6 million tonnes of spodumene concentrate, or 350,000 tonnes annually, over 12 years from the site. That would make it the world’s 10th-biggest project, according to the company. Atlantic has a market capitalization of over US$200 million.