Government has finally given statutory consent for Paladin Energy Limited (Paladin) to divest its 85 percent interest in the Kayelekera Uranium Mine (KUM) project to Lotus Resources Limited (65 percent) and Kayelekera Resources Pty Ltd (20 percent).
A statement from Lotus signed by managing director Simon Andrew has now indicated that Minister of Natural Resources, Energy and Mining Bintony Kutsaira has granted the consent, in a deal which will see Malawi retain its 15 percent stake in the uranium mine.
Initially, government was reluctant to allow the offset, with Kutsaira wiring the company asking for more information on the mine projects and prospects before it is granted consent on the sale.
Other issues raised included provision of further tax reporting information, corporate social responsibility and environmental assurances and responses to labour-related queries.
But now, Kutsaira has granted consent, although the Minister, together with his finance counterpart Joseph Mwanamveka will have to issue another consent—contractual consent to complete the sale.
This done, Andrew said the completion of the sale remains subject to customary terms and conditions, including Reserve Bank of Malawi (RBM) approval, which is expected to follow.
He has since expressed hope that with experienced team at Lotus, operational review, engineering studies and resource evaluation will be able to make a positive contribution to the mining industry in Malawi for the benefit of all stakeholders.
He said: “We believe Kayelekera is a world-class uranium asset. The mine is fully permitted and includes significant plant and infrastructure. Kayelekera hosts a high-grade uranium resource with an existing open pit mine and demonstrated excellent recoveries [87.5 percent] while it was in production.”
“Lotus believes the near-mine and regional exploration potential is significant. Numerous radiometric anomalies have been identified over the broader project region. Although several have been tested previously, targets remain open in Mwankeja South, Livingstonia and Chilumba prospects based on untested radiometric anomalies as well as structural targets in the Nthalire areas.”
After completion of the sale, Lotus says it plans to formulate a detailed operating strategy for the project, which produced more than 10.9MIb of uranium between 2009 and 2014 before Paladin placed it on care and maintenance.
At the core of the strategy, it says, will be re-engineering certain production and mining processes to reduce the overall capex and opex of the operation.
Natural Resources Justice Network (NRJN) chairperson Kossam Munthali urged government not to respond to any external pressure from the investors but must first define its agenda to ensure that the interests of Malawians remain a priority.
“Government halted the process almost 10 days ago citing a number of grey areas which needed to be rectified, Malawians and the people of Kayelekera and Karonga in general are eagerly waiting to hear the outcome. Have they been addressed?
“What have lessons have we learnt as a country to avoid repeating the known and unknown mistakes. Will the community development agreements be priotised in this arrangement as enshrined in the Mines and Minerals Act under Section 169?
He said NRJN wished government had meaningfully engaged all concerned stakeholders before lifting the halting decision.
“As NRJN, we request government to be more transparent in these processes. We needed Malawians to be informed and updated on such important decisions. Will the new owner conduct the Environmental Impact Assessment again?” he queried.
In an interview, Kutsaira admitted to have given the Statutory Consent, saying, most of the things he had requested have been resolved.
“They have done most of things we asked them to, because I don’t want to say that they have done everything we asked them to do. Unfortunately, I can’t remember everything off book on what has been done,” he said, asking to be called later.
Paladin suspended mining at Kayelekera in 2014 following a slump in global uranium prices. The mine has since remained on care and maintenance as directors anticipated a pickup in global uranium prices.
The stake in KUM, according to Paladin will be sold for $5 million (about K3.7 billion), comprising $200 000 (about K148 million) in cash and $4.8 million (about K3.5 billion) in Hylea shares which will be issued to Paladin.