Atlantic Lithium asks Ghana for tax relief to save mine

Australia’s Atlantic Lithium (ASX: A11) has appealed to the Ghanaian government for monetary giving ins to maintain its Ewoyaa lithium task afloat, alerting that the collapse in lithium rates has actually placed the nation’s very first lithium mine in danger.

Because 2016, the firm has actually spent about $70 million in creating the task. However lithium rates have actually dived over 80% given that coming to a head in November 2022, driven by a worldwide surplus and slower-than-expected electrical lorry (EV) fostering.

Ghana, Africa’s leading gold manufacturer, given Atlantic Lithium a 15-year lease to develop Ewoyaa by late 2024, intending to use the expanding EV market. Nonetheless, existing market problems might hinder those strategies.

” While existing lithium rates existing headwinds, our team believe that with cooperation and sensible monetary steps, we can progress Ewoyaa to manufacturing and supply long lasting worth for all stakeholders,” exec chairman Neil Herber claimed in a declaration.

He included that the firm stays fully commited to functioning very closely with the Ghanaian federal government and regional neighborhoods to make Ewoyaa a local front runner.

In spite of a small recuperation in lithium rates many thanks to stabilizing vehicle manufacturing, experts stay mindful. Added tolls in the United States, consisting of a 25% levy on vehicle components anticipated by Might 3, have more shadowed the need overview.

New mining earnings structure

Atlantic Lithium is looking for giving ins on Ghana’s brand-new mining earnings structure, that includes a 10% cost-free brought rate of interest for the state and an unique 13% nobility on gross earnings from lithium manufacturing.

Basic supervisor Ahmed-Salim Adam told Reuters the task’s interior price of return has actually plunged from 105% to simply 13.6%. “No one is mosting likely to place their cash because,” he claimed. “It needs to have been 30% to make good sense.”

In feedback to the economic stress, the firm gave up 25 workers in October and prepares to give up regarding 50 even more in Might.

Fifty percent of Ewoyaa’s lithium result is allocated for a US-based refinery had by Piedmont Lithium (NASDAQ, ASX: PLL), Atlantic Lithium’s second-largest shareholder, which has actually likewise accepted fund the majority of the mine’s building and construction.

Atlantic Lithium intends to generate 3.6 million tonnes of spodumene concentrate over 12 years– about 350,000 tonnes each year– which would certainly place Ewoyaa amongst the globe’s 10 biggest lithium jobs.