Amanda Clinton Esq., MSc. African Politics (SOAS), London
Founding Partner, The Law Office of Clinton Consultancy
Ghana has now taken a visible step to improve lithium value capture through a sliding-scale royalty framework. That is progress. But progress is not strategy.
Royalties answer one question: how much cash does the state collect per tonne exported?
They do not answer the harder questions that determine whether Ghana becomes a true player in the green economy or merely an extraction site supplying other people’s industrial revolutions.
Lithium is not just another mineral. It is an industrial input. If Ghana governs lithium like gold—extract now, regulate later—it risks repeating the same story under a greener flag.
1) What the Royalty Framework Solves—and What It Doesn’t
A modern royalty regime can do something valuable: it allows Ghana to earn more when prices rise and remain competitive when prices fall. In volatile commodity cycles, this is fiscally intelligent.
But it also has limits. A royalty framework does not on its own:
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compel local processing,
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ensure technology transfer,
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build domestic industrial capacity, or
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give the state meaningful influence over strategic decisions.
In other words, a royalty instrument can be a good fiscal floor, but it is not a national strategy.
2) The Core Risk: Exporting Raw Lithium Exports Opportunity
If Ghana exports lithium as raw spodumene concentrate, the bulk of value is captured elsewhere—in refining, conversion, cathode production, and ultimately battery manufacturing.
That is the structural trap. Royalties may rise, but Ghana remains positioned as a quarry, not a node in the battery economy.
The difference is not theoretical. It is measurable. The price uplift between raw concentrate and downstream processing stages is where industrial wealth is generated—skills, factories, supply chains, and influence.
A lithium policy that does not bind value addition is not a policy; it is a revenue mechanism.
3) Value Addition Must Be Timelined, Not Promised
One of the most damaging phrases in resource governance is: “We will process later.”
Later becomes never—especially once supply chains lock in and investors have already recovered early costs.
Ghana’s best leverage point is before final project ratification and early-scale extraction. After that, renegotiation looks like a moving target and can increase arbitration risk.
What Ghana needs is not instant processing demands that scare investors. Ghana needs clear, staged milestones built into the governance architecture.
A realistic model looks like this:
Stage-Based Value Addition (Illustrative, Not Disruptive)
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Stage 1: defined upgrading milestones (e.g., quality improvement, controlled concentrate specifications, local technical services and laboratories)
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Stage 2: processing feasibility triggers tied to production thresholds and market conditions
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Stage 3: binding conversion or regional refinery participation where scale and economics justify it
The principle is simple: value addition is not optional—it is scheduled.
4) State Equity Must Mean Influence, Not Symbolism
Many African extractive regimes contain a quiet problem: the state is said to hold equity, but it has limited governance power.
Equity without influence is ceremonial. It may deliver dividends, but it does not protect national interest when key decisions arise—transfer pricing, related-party contracting, asset stripping, refinancing, or early project restructuring.
If Ghana participates through a state vehicle such as a sovereign fund or state nominee, then that participation must include:
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board representation,
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information rights,
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audit committee access, and
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protective veto on defined “reserved matters” (such as asset transfers, related-party deals, major debt, and pricing structures).
This is not hostile. It is standard governance in strategic sectors.
5) Transparency Is Not Public Relations—It Is Risk Management
The quickest way to neutralize scandal narratives is not speeches. It is structured disclosure.
Where citizens and Parliament cannot see fiscal logic, suspicion grows. And suspicion weakens state negotiating strength and investor credibility at the same time.
Radical transparency does not mean publishing proprietary trade secrets. It means publishing the public-interest components that anchor legitimacy:
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valuation assumptions (summary form),
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price triggers that move royalty bands,
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high-level fiscal model summaries (not confidential line items), and
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renegotiation clauses and triggers.
A transparent framework protects both Ghana and investors by reducing political volatility.
6) Why Parliament’s Leverage Moment Is Now
If Ghana settles the fiscal framework first and postpones governance commitments, leverage shifts away from the state.
Leverage is always strongest before approval, not after.
This is the real warning:
Once Ghana’s fiscal debate is “resolved” in law, it becomes harder—politically and commercially—to demand deeper governance concessions later.
This is why the right approach is sequencing, not rejection.
A disciplined, investor-safe position is:
Amend and strengthen the framework now—then approve from a position of strength.
7) What Investors Should Want
Serious investors should not fear these governance enhancements. In fact, they should prefer them.
Why? Because stable, legitimate, well-governed regimes reduce:
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social conflict,
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renegotiation politics,
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reputational exposure, and
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arbitration risk.
The market punishes uncertainty. Not strategy.
Ghana’s long-term lithium credibility depends on proving that it governs strategically, not administratively.
8) Bottom Line
A sliding-scale royalty is a necessary improvement. But royalties are not strategy.
If Ghana wants lithium to transform its economy, it must lock in three pillars before project leases return:
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Value-addition milestones with timelines
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State equity governance with influence and accountability
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Radical transparency to rebuild trust and stabilize policy
Lithium is not just revenue. It is leverage.
And leverage is time-sensitive.
Contact Us
The Law Office of Clinton Consultancy
Accra, Ghana | Regional Presence Across Africa
WhatsApp: +233 27 252 2695
Email: info@clintonconsultancy.com
We advise investors, developers, offtakers, and policymakers on:
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lithium project structuring and risk allocation,
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fiscal and governance frameworks for strategic minerals,
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parliamentary and regulatory strategy,
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due diligence and compliance, and
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dispute prevention and arbitration-ready contracting.
