Ghana could forfeit as much as $500 million in government revenue if it moves ahead with plans to refine lithium domestically, according to a new report by the Natural Resource Governance Institute (NRGI).
The analysis warns that both state-owned and privately operated refineries would struggle to be financially viable unless they purchase lithium concentrate at prices below market value significantly reducing potential earnings from royalties, taxes, and dividends tied to existing mining operations.
The report models two scenarios: exporting unprocessed lithium spodumene concentrate versus refining it within Ghana. The findings are clear exporting delivers higher net revenue for the state, particularly if the concentrate is sold to Chinese refineries, which currently dominate the global refining market and benefit from far lower production costs.
Under a mid-range price projection, domestic refining could slash government revenue from an estimated $2.7 billion to $2.2 billion over the project’s lifespan. Even assuming a refinery operates for 20 years, projected losses still top $300 million—driven by high capital investment, limited local supply of raw materials, and a lack of technical expertise in refining.
By contrast, China refines over 90% of the world’s lithium and enjoys major cost advantages thanks to economies of scale, cheap inputs, and substantial government support. Many proposed lithium refineries outside of China—including those in Europe and Australia have been postponed or scrapped due to similar financial and logistical challenges.
Given these realities, NRGI recommends that Ghana pursue a “mine-and-monitor” strategy. The proposal encourages rapid development of the Ewoyaa lithium project, continued exploration, and close monitoring of global refining trends before investing public funds in a potentially unprofitable refining facility.
While pressure for in-country value addition remains high, the report urges decision-makers to consider economic viability and the broader opportunity cost. The potential $500 million loss, it notes, is greater than Ghana’s entire 2024 basic education budget.
