In some African countries with significant fossil fuels, public policy discussions around the energy transition have centred around perceived risks associated with the transition – undeveloped oil fields, stranded assets and untapped oil revenues. To respond to such concerns, Ghana set up the National Energy Transition Committee (NETC) in December 2021.
A multi-year review (2004-2019) of trends in mineral production shows limited government revenue generated from mining despite significant production volumes. Also, upstream oil and gas sector has generated more revenues (approximately USD 6 billion) than bauxite, gold and manganese.
There is a need to update mining laws, policies and practices and align them both economically (with well-defined industrial development strategy) and ecologically (with commitments to meeting climate targets). It can be noted that critical minerals strategy and action plan would be a tactical step in defining a pathway to optimize value creation in the critical minerals boom.
There might be some potential risks such as at the early stages of the value chain, the award of mining rights and contracts could become vulnerable. To address these risks, transparent and accountable governance systems need to be strengthened before new licenses for critical minerals are awarded. Furthermore, opening due diligence processes to check corporate ownership chains and other Environmental, Social and Governance (ESG) indicators can be helpful. Together with transparent processes, adequately funded government agencies can play a key role in improving access to data.
To sum up, Ghana’s nationwide consultation to develop a national energy transition policy is a positive step. The resulting policy will be insufficient without considering the opportunities and risks associated with critical minerals, and policymakers could draw on GHEITI’s annual disclosure. After all, a balance between energy, economic development and environment is crucial.
Source: EiTi
