All things being equal, come the year 2025, Barari DV Limited, a subsidiary of Atlantic Lithium which was granted exploration rights in 2012 would commence production of Lithium from the mining ore deposits located in Ewoyaa, Mfantseman Municipality in the Central Region of Ghana.
Even though some of us haven’t had copies of the agreement signed so far, Press reports being circulated on social media gave indication inter alia that the deal included the following;
â–ª10 % Royalty paid to Ghana
â–ª13 % Free carried interest by the State
It is gratifying to note that these deals have attracted debates from sections of the Ghanaian Public as to whether Ghana stands to benefit immensely from the Contract or not.
Much as those for and against could do so justifiably , some of us being Professionals and Practitioners in the field of Procurement and Supply, Contract and Project Management would like to know whether the following Processes and Procedures were factored into the Contract before, during and after the signing of the agreement;
â–ªWhich Methods of Procurement were selected; Restricted Tendering, National Competitive Tendering, International Competitive Tendering, Sole Sourcing, Single Sourcing, Negotiated Tendering etc?
â–ªAny justification for the Methods of Procurement selected?
â–ªWas there a Notice of Procurement?
â–ªIf so which media, either local or foreign that the Notice of Procurement appeared or was advertised?
â–ªHow was the Tendering Process conducted?
â–ª Were the Bidder(s) Prequalified?
â–ªWas Value For Money, Due Diligence, Verification and Authorization of documentations done before Bid Analysis and Bid Evaluation were undertaken?
â–ªWas the Contract awarded and agreements entered to the Company whose bid was considered most competitive or Sole Sourced?
â–ªHow well were the Conditions Precedent and Subsequent to the Contract carefully analysed and entered into the Contract to benefit the country, Ghana?
â–ªIs the Mining operations going to be SURFACE, UNDERGROUND or Both?
â–ªHas Environmental Impact Assessment done to determine whether or not blasting of the ore at any given time would not pose a health and safety risk to citizens in these vicinities?
We are asking all these questions since in Public Procurement, we don’t use one determinant factor as basis to award Contract to a particular company or negotiate for a company to accept an increase in Royalty from 5 % to 10 % as in this case under review.
Paying higher or lower Royalty and bringing on board, one or two extra deals should not be used as a barometer to award and enter into Mining Agreement. Royalties have been paid by Mining Companies in Obuasi, Tarkwa, Prestea, etc and not much can be seen in terms of infrastructural developments, living conditions of the inhabitants growing from bad to worse, ecology and environmental pollution and destruction of vegetation covers, water bodies, health crisis arising from mining activities.
Have we thought about the effect of the mining activities on farm lands, water bodies, buildings and infrastructures already existing in these areas that the mining concessions would cover? Will these owners be compensated adequately to enable them relocate and start life afresh elsewhere?
Issues to do with compensation ought to be factored as Conditions Precedent to the contract. The Company should be made to commit itself legally to compensate all those who would be affected before, during and after the commencement of the mining operations.
That’s why, some of us would not be looking at payment of Royalty and other charges only which would be made annually, received and paid into the consolidated fund thus denying the Chiefs and citizens of these affected mining areas their benefits in the short, medium and long term.
Royalties had been paid for years in respect of mining activities at Obuasi, Tarkwa, Prestea, etc, and in terms of developmental projects and standard of living, the people of these areas would have little accounts to give. At best, not much would be said. A visit to these areas would confirm whether or not royalties paid for years had had any positive impacts on the lifestyle of the inhabitants in these mining towns.
Let’s learn from the South Africa example where a mining province or town like Johannesburg was developed through proceeds from mining operations. We need to adopt international best practices so that any time Ghana enters into Mining Agreements, the nation, the Chiefs and citizens in such areas would see a transformation in their lifes, with improved infrastructural developments etc.
As the Contract Agreement would be tabled before Parliament of Ghana for ratification, we recommend that the Agreement should be reviewed, questions as itemized above asked, solutions obtained and where necessary incorporated for Ghana to benefit immensely in Lithium production.
Payments of 10 percent Royalty and 13 percent free carried interest by the State by all intents and purposes are not enough in view of the extensive damages mining activities do to the ecological system, vegetations, forest reserves, water bodies thus depriving the people, their sources of incomes to feed their families.
Let’s reflect deeply on the above before the Contract for the Mining of Lithium is given the necessary ratification.
Emmanuel Tetteh Mensah,
â–ªChartered Procurement and Supply Practitioner,
â–ªExecutive MBA Graduate in Project Management,
(Executive Director)
YOUR PROCUREMENT EYE,
Emails:Â yprocure.Eye@gmail.com
