Uncertainty surrounds the resumption of uranium mining by Paladin (Africa) Limited (PAL) at Kayelekera in Karonga as the global spot price for the metal is still way below the desired price.
PAL suspended production at the mine and put the facility on care and maintenance in February 2014 waiting for uranium prices to reach between $70 and $75 per pound.
But a Paladin quarterly report shows that weekly spot price for March quarter stood at $32.73 per pound, a nine percent fall compared to the December 2015 quarter and a 14 percent decrease compared to the March 2015 quarter.
PAL general manager for operations Alan Cumming, in response to an e-mailed questionnaire on Friday, said the mine remains on care and maintenance.
He said resumption of production will depend on external macro-economic conditions and the global uranium market.
“The global uranium price remains close to a nine-year low, way below the level at which Kayelekera Mine could be operated for positive cash flow. Therefore, it is not known when the mine will resume production,” said Cumming.
Ministry of Natural Resources, Energy and Mining is observing with keen interest the behaviour of metal prices, including uranium on the global market.
Department of Mines spokesperson Levi Undi said on Friday global prices of uranium have remained depressed mainly on account of the aftermath of the Fukushima disaster in Japan, which led many countries using nuclear reactors for power generation to suspend operations.
He said the mining industry has been going through a rough patch with most of the metal prices depressed on the global market.
Said Undi: “This is a normal cycle in the mining industry. This can be because the consumers have sufficient stocks to last them for some time.
“Check on the prices of most metals, you will find that they have been low in the past three to four years.”
He said the future of uranium mining in Malawi depends on the global market price of the product and the amount of deposits. n