Dual-listed Paladin Energy Limited, operators of Kayelekera Uranium Mine in Karonga, says it expects to complete outstanding approvals for the sale of the company’s 85 percent stake.
In its September Quarterly Report, the miner said it has now received noteholder consent for the sale and the transaction has been approved by Lotus shareholders with the key outstanding approval remaining from the Malawi Government, which owns 15 percent stake.
The sale, which will enable Paladin to prioritise its capital and other resources on optimising and restarting its Botswana Mine, comes amid persisting uncertainty on the market.
According to TradeTech Weekly, spot price average for the September quarter was $25.30 per pound, a two percent increase compared to the previous quarter, although two percent lower than the September 2018 quarter.
The uncertainty emanating from the pending decision of the US Nuclear Fuel Cycle Review following a petition filed by two US-based uranium companies in January 2018, calling for a 25 percent quota on uranium to limit imports in support of US-based producers.
Reads the report in part: “Development of new uranium supply necessary to support these programmes continues to be elusive, with forward uranium price indicators well below incentive prices. With long-term contracting dormant, forward uncommitted demand continues to increase ultimately improving the future prospects of uranium suppliers and developers.”
In June 2019, Paladin announced its decision to sell its 85 percent interest in the mine to Hylea subsidiary, Lotus Resources, a joint venture with Chichewa Resources for $5 million (about K3.7 billion).
This comprised $200 000 (about K148 million) in cash and $4.8 million (about K3.5 billion) in Hylea shares to be issued to Paladin, leaving the fate of the employees in the hands of the new owner.
Paladin Energy consultant on Kayelekera Uranium Mine, Grain Malunga, said in an interview yesterday the development means that Paladin Energy is leaving the Malawi market and that the fate of employees at the mine will rest with the new owner.
Paladin suspended mining at Kayelekera in 2014 following a slump in global uranium prices and the mine was put under care and maintenance.
In an interview, Natural Resources Justice Network (NRJN) chairperson Kossam Munthali has called for transparency in the sale of the mine.
He said: “We need to know people behind these ventures. It is a requirement in terms of disclosure. So, the first thing Malawians need to know is who [are the new buyers]?”
An official from Ministry of Natural Resources, Energy and Mines said the statement has not come as a surprise, but said government will engage the miner.