By Maxwell Akalaare Adombila
ACCRA (Reuters) -Atlantic Lithium is continuing negotiations with Ghana’s government to salvage its Ewoyaa lithium project, the company’s chief Keith Muller said on Thursday as falling prices of the critical battery metal cast a shadow on viability of the West Africa nation’s maiden lithium mine.
The Australia-based miner is seeking concessions on Ghana’s new mining revenue framework, which includes a 10% free carried interest for the state and a special 13% royalty on gross revenue from lithium production.
“While current lithium prices present headwinds, we believe that through collaboration and prudent fiscal measures, we can advance Ewoyaa to production and deliver lasting value for all stakeholders,” Muller said in a statement.
The negotiations come as lithium prices have fallen more than 80% from their 2022 peak, putting pressure on the economic viability of new projects worldwide.
Ahmed-Salim Adam, Atlantic Lithium’s general manager, told Reuters separately in an interview that urgent revisions to the fiscal terms would help keep the project alive.
LITHIUM PRICE RECOVERY UNDERMINED
Ghana, Africa’s lead gold producer, granted the Australian miner a 15-year lease to establish the mine by late 2024, hoping to capitalize on the EV boom.
The Ewoyaa project, with an estimated resource of 35-40 million metric tons of lithium-bearing ore, is positioned to become one of the top 10 global spodumene concentrate producers, according to Atlantic Lithium, making it a significant new supply source outside the industry-dominant markets of Australia, Chile and China.
It is estimated to produce around 360,000 tons of lithium annually, which will be exported to the U.S.
However, construction of the project stalled on delayed parliamentary ratification, with the lithium price collapse now further complicating its viability and the company’s development timeline.
Despite a recent price recovery, driven by normalizing global auto production, industry analysts remain cautious.
While “EV-led demand growth remains strong, it continues to be overwhelmed by mine supply growth,” said Tom Price, Panmure Liberum’s head of commodities, noting that U.S. President Donald Trump’s 25% tariff further dampened prospects.
West Africa’s relatively recent entry to lithium also means investors will prefer to stay in established markets when prices are weak, Price said.
“We are dedicated to working in a spirit of partnership … to ensure Ewoyaa becomes a flagship project for the country and the region,” Muller added.
(Reporting by Maxwell Akalaare Adombila; Editing by Veronica Brown and David Evans)
