The West African nation of Ghana risks loosing an estimated revenue of $500 million if it’s plans to add value to its lithium find domestically by building a refinery becomes a reality, a new report by the Natural Resource Governance Institute (NRGI) has revealed.
According to the findings, 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 NRGI 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.
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 has therefore recommended that Ghana adopt a “mine-and-monitor” strategy—starting with 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.
Some industry experts also argue that, Ghana’s limited lithium deposits does not make economic sense for the country to spent huge capital in building a refinery that may not have adequate raw material supply for decades.
