Atlantic Lithium, an Australia-based mining firm, has urgently appealed to the Ghanaian government for fiscal relief to save its Ewoyaa lithium project.
The company warns that plummeting global lithium prices have made the project economically unviable.
Since 2016, Atlantic Lithium has invested about $70 million into developing Ghana’s first lithium mine, located near Mankessim in the Central Region.
The mine was expected to position Ghana among the world’s top ten spodumene concentrate producers. However, lithium prices have fallen by over 80% from their November 2022 peak, casting doubt on the project’s future.
“We’ve done the maths and it doesn’t make sense at all. We’ve written to the Minister of Lands and Natural Resources asking for urgent fiscal support. Without it, the project cannot continue,” said General Manager Ahmed-Salim Adam in an interview with Reuters.
The mine, granted a 15-year lease in 2023, was scheduled to begin construction by the end of 2024. It aimed to produce up to 360,000 tons of lithium annually, mainly for export to the United States. Ghana had hoped the project would boost its economy and position it as a key player in the global electric vehicle (EV) battery market.
However, delays in parliamentary ratification of the mining lease and weak lithium prices have stalled the project. Despite a recent price stabilization due to recovering EV production, analysts remain cautious.
“EV-led demand is still strong, but mine supply growth continues to outpace it,” said Tom Price, Head of Commodities at Panmure Liberum.
He added that U.S. President Donald Trump’s proposed 25% tariff on Chinese EVs has further dampened market optimism.
Ghana’s late entry into the lithium market also poses challenges. Investors often prefer established mining regimes in countries like Australia, Chile, or China. As a result, the project’s internal rate of return (IRR) has plunged, from a once-attractive 105% to just 13.6%.
“No one will invest at that rate. We needed at least 30% to make it viable,” Adam noted.
In its formal request, Atlantic Lithium asked for a reduction in royalty rates from 10% to 5%, in line with Ghana’s gold sector. The company also proposed a flexible royalty scale tied to global lithium prices, a review of the 32.5% corporate income tax rate, and the removal of import duties on capital equipment.
Adam stressed that the project cannot move forward without these concessions. “Even with lease ratification, we can’t get it off the ground.”
The financial strain has already triggered layoffs. In October 2024, the company cut 25 jobs and plans to lay off 50 more by May 2025. “We will maintain only a skeletal team,” Adam said.
Atlantic Lithium’s appeal underscores the fragile economics of critical mineral projects in emerging markets, especially in a volatile global market. The company’s plea now puts pressure on Ghanaian authorities to respond quickly or risk losing a strategic opportunity in the green energy transition.
