The analysis warns that a state – or privately-run refinery would only break even if it purchases lithium concentrate at below-market prices—undercutting revenue from royalties, taxes, and dividends from current mining operations.
The modeling compares two scenarios: exporting raw lithium spodumene concentrate versus processing it locally. The results are stark—exporting yields higher net revenue for the government, especially if concentrate is sold to Chinese refineries, which currently dominate the global market and operate at far lower costs.
In the medium-price scenario, refining locally reduces expected government revenue from $2.7 billion to $2.2 billion. Even with a 20-year operational refinery, losses exceed $300 million, largely due to Ghana’s high capital costs, limited feedstock, and lack of refining expertise.
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In contrast, China controls over 90% of global lithium refining, benefitting from economies of scale, cheap reagents, and state-backed subsidies. Most new refineries outside China—including in Australia and Europe—have either been cancelled or delayed due to similar cost hurdles.
NRGI recommends Ghana adopt a “mine-and-monitor” strategy—starting lithium production at Ewoyaa swiftly, supporting exploration, and tracking global refining trends before committing public funds to a potentially loss-making refinery.
While calls for local value addition remain strong, the report urges policymakers to weigh economic feasibility and opportunity costs—highlighting that the projected $500 million loss exceeds Ghana’s entire 2024 education budget for basic schools.
