Ministry of Mining says it expects Lotus Resources Limited, the new majority shareholder in Kayelekera Uranium Mine in Karonga, to resume mining in two years’ time.
Ministry of Mining Principal Secretary Joseph Mkandawire said in a written response to a questionnaire that there is hope now for the resumption of uranium mining at Kayelekera following the gradual picking up of global uranium price.
He said: “As government, our expectation is that Lotus will resurrect the mine as soon as possible, indicatively, within two years.
“We expect that the company will always operate within the confines of the prevailing mining law and other relevant laws of this country, not only for the benefit of the company alone, but also for the good of the country.”
Mkandawire said recent statistics on the uranium world market indicate that the spot price of uranium (U3O8) has risen by 36 percent since the start of 2020 to a recent high of $34/lb as at October 2020.
Kayelekera Uranium Mine is under maintenance and care since 2014 when it stopped operating.
In 2020, Paladin Africa Limited, which was running the mine since 2009, sold its shareholding to Lotus Resources Limited and the Malawi Government, which owns a 15 percent stake in the mine, approved the deal.
Lotus Resources Limited committed to work on the feasibility study aimed at cutting the cost of operating the mine through the re-engineering of the milling plant and conducting extensive exploration work to increase the lifespan of the mine.
A restart scoping study conducted by Lotus Resources Limited concluded that the restart of Kayelekera would require a “low” total initial capital cost of $50 million due to the mine’s existing infrastructure, including a 1.4 million tonne per annum processing facility, on-site acid plant and accommodation camp.
But mining expert Grain Malunga, who was a local consultant for Kayelekera Uranium Mine since the Paladin Limited tenure, faulted government for bureaucracy in issuing full operating rights for Lotus to commence its plans.
During the prime period of the mine’s operations, the mining sector contribution to the gross domestic product (GDP) reached 10 percent. n