New investors in Kayelekera Uranium in Karonga, Lotus Resources Limited, have expressed delight with the renewal of its mining and exploration licence, saying it provides certainty and confidence in the venture.
In a statement issued by the Australia Stock Exchange-listed Lotus Resources Limited and signed by its managing director Keith Bowes, the company said the renewed licence was signed by Minister of Mining Rashid Abdul Gaffar on September 1 2021 and is valid for 15 years.
He said: “This [licence renewal] is a critical step as it provides certainty and confidence to our investors that Lotus has the full backing of the government to continue our ongoing development of Kayelekera as we position the project to be one of the first assets to recommence production in an ever-improving uranium price environment.
“It is important to highlight that a restart of operations also provides significant benefits to the local communities and Malawi as a whole through employment, development of local communities, taxes, royalty streams and profit share to the Government of Malawi, which is a 15 percent owner of the project.”
Earlier this year, Lotus Resources Limited announced the start of a definitive feasibility study (DFS) for its Kayelekera Uranium Project.
The feasibility study followed strong results from multiple technical studies being undertaken which have indicated the potential for significantly enhanced outputs and returns compared to the scoping study released in October 2020.
The study would also incorporate results from multiple technical studies on power supply, ore sorting, acid recovery and tailings that have demonstrated the potential for reduced operating costs and increased production.
But the firm’s initial results from the power study indicate a mix of power supply options incorporating connection to the national grid, solar power and energy recovery from the acid plant will be the most reliable and cost-effective option for Kayelekera.
This, the company said, could see power cost materially reduced compared to historical operations at Kayelekera run on diesel-powered gensets.
Kayelekera Uranium Mine (KUM) is Malawi’s biggest mining venture to date and was placed on care and maintenance since February 2014 due to the fall in uranium prices on the international market.
In an interview yesterday, Karonga Diocese Catholic Commission for Justice and Peace (CCJP) desk officer Louis Nkhata, whose institution has been closely following events at Kayelekera Uranium Mine, said they expect locals to benefit from the project this time.
On the other hand, mining governance expert Kossam Munthali yesterday faulted government for renewing the licence, saying there were still outstanding issues on the Community Development Agreements (CDA) yet to be concluded.
He said: “Consultations by the community are about to start now since Lotus officials were requested to have the draft CDA in the language that communities can understand.
“Previously, we also had issues with revenue, the soiling of chemicals into rivers, and have all those been addressed? We need those dealt with first before any operations start.”
But Ministry of Mining Principal Secretary Joseph Mkandawire said the company will not re-start operations until issues such as Environmental Impact Assessment (EIA) are done.
In May, President Lazarus Chakwera outlined how mining could transform the country’s economy and the steps his administration will take to push forward a vision of industrialisation in the country which he described as “mineral rich”.
In June this year, Parliament also approved the establishment of a new national mining company to implement business interests of the country’s mining sector. This follows the establishment of a gold market by the Reserve Bank of Malawi earlier in the year.