Paladin rejects Action Aid Malawi report as ‘fundamentally unsound’

Uranium miner Paladin has rejected the susbstance of the report by Action Aid Malawi that states that Malawi government has lost out on more than US$43 million in tax to the Australian mining multinational , saying it is “fundamentally unsound”.

Walker:  The Action Aid Malawi report on Paladin is unsound
Walker: The Action Aid Malawi report on Paladin has one too many material errors

Paladin’s General Manager for Malawi, Greg Walker told Nyasa Times that Action Aid Malawi did not provide a draft copy of the report to the Company for comment prior to publication,.

But he said the NGO posed two specific questions in relation to royalty and tax matters in its letter of 08 June 2015, to which Paladin replied on 12 June 2015, dealing comprehensively with both matters.

According to the letters made available to Nyasa Times, Action Aid UK’s comment read: “We would like to be clear that we are not accusing Paladin of tax evasion or any other illegal activity. We are very clear in our research findings that the actions taken by Paladin are completely legal.”

Walker said Paladin rejects the basis of Action Aid’s argument concerning tax loss as fundamentally unsound, as it assumes that the miner’s US$620M investment, including the initial US$300M development of the Kayelekera Project, further capital expenditure and working capital funding, would have proceeded if a 5% royalty had been in place.

“This is a false assumption. Unless the royalty had been reduced to 3%, the Project would not have reached an economic threshold for investment and, as a consequence, simply would not have proceeded – an economic fact that was recognized by the government of the day in Malawi, but which NGOs prefer to ignore,” said Walker to Nyasa Times.

“The royalty rate was reduced and, as a result, Malawi has enjoyed the economic benefits arising from this very significant investment.  What is overlooked in Malawi and by Action Aid is that the average royalty rate in Africa at the time the Kayelekera Development Agreement was being negotiated was 3%, including neighbouring SADC countries. Malawi’s current royalty rate of 5% is high and was and is a disincentive to investment.,” said Walker.

He stated that, rather than foregoing US$43M in taxation revenue, as Action Aid erroneously assert, in the event that the Kayelekera Project had not gone ahead,  the direct revenue loss to the Government of Malawi ) in fact would have been US$48.6M, comprising US$10,479,717, which was the total amount paid in royalties by Paladin to Malawi government in the period 01 April 2009 to 30 April 2015 and US$38,170,424 in payroll tax, withholding tax and non-residence tax during the same period.

“ This amount of direct tax revenue does not take into account other important project benefits such as much needed foreign exchange earnings (US$560M) and the amount spent by Paladin (Africa) Limited with Malawian suppliers of goods and services to the Kayelekera Project (US$321M).   None of these benefits to Malawi’s economy would have occurred if the Project had not proceded, a fact ignored by Action Aid UK,” explained Walker.

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Samarakunjuta
Samarakunjuta
8 years ago

Malawi lacks pple with balls!! How do u call uself a professor but the country that u lead is lanks last position in the world??please malawi learn from the Best look at zimbabwe, all the mines were owned by whites where are they now??? Stop sleeping in the day and be serious.In those days the most teachers country in Africa zimbabwe where is it now? Look at Lilongwe there is no pack station no toilet ha ha ha!! Airmalawi you can’t get a straight flight from mzuzu to Kenya or Tanzania.what a shame!! The same people stolen The government money… Read more »

Samarakunjuta
Samarakunjuta
8 years ago

Malawi lacks pple with balls!! How do u call uself a professor but the country that u lead is lanks last position in the world??please malawi learn from the Best look at zimbabwe, all the mines were owned by whites where are they now??? Stop sleeping in the day and be serious.In those days the most teachers country in Africa zimbabwe where is it now? Look at Lilongwe there is no pack station no toilet ha ha ha!! Airmalawi you can’t get a straight flight from mzuzu to Kenya or Tanzania.what a shame!! The same people stolen The government money… Read more »

Boyd Kilembey
Boyd Kilembey
8 years ago

Action Aid did not have the capacity or know how to make such statements. Kungolemba MCE drop out basi pitaniu mukalembe za Paladin.
I think it would have required public auditors to delve into the domain that Actiuon Aid delved into. I think their report is alarmist. There was no way Action Aid would have found “nothing wrong” with Paladin. Their minds were already biased. I believe what Paladin are saying here
I

XYZ
XYZ
8 years ago

Walker was very slim last time i saw him at kambwe. Pano chimunthu. Taonani masaya. Kunenepa kuposa eni ake nthaka. Amalawi ndioonda bcoz of low salaries and poor diet. Aonjezeleni malipiro mwina kufananako ndi walker. Ndilama zili momuno joni ndichabe inu

nachisale
nachisale
8 years ago

PALADIN should pack up and GO. They have stolen enough from Malawi and Greg Walker should stop talking nonsense because Acttion AID has exposed paladin as a thief and scam. Western theives – you are the ones that are impoverishing AFRICA. To hell with Paladin and let the souls of Malawians who are dying of hunger, diseases etc haunt you forever.

Victim of corruption
Victim of corruption
8 years ago

Kyungu already asked the Government to deport Walker. Such a demand would best be followed by investigations to determine the future of Walker under Paladin. I have greatly followed walker and I am not the NGO in question. Claims either true or false has always been neglected by the Walkers Ferry. Nothing.And mind you they are in business and they need to make and protect their profits under cover with most of info not available to government. Any approach to his office. The case is over. That’s the reason Paladin cant afford to lose him. He dinied sleeping and ignorumus… Read more »

zingati zanu
zingati zanu
8 years ago

About 92!illion kwacha cashgate. Am sure sense must be applied to the dealing with the malpractice. DPP led government is a biased regime that has no sanity in dealing with corruption in Malawi. Shame on Peter and Chilima for thinking that Malawians have also buRried the issue under the pillow. Akupatsenitu budgetiyo koma otherwise it stinks a big deal. Zanu ndi zingati paja mu 92billion? Munatenga kalenso.

Strange INGO
Strange INGO
8 years ago

Actionaid has been given money from Global Fund by the Government and yet it is writting all this against the same government. I am sure they will write more

Enukweni
Enukweni
8 years ago

Let us be honest the report might be true. Who knows the contractual agreements between government and paladin, even the members of parliament or the people of Karonga do not know the contract. That’s why the Paladin guys always say can not discuss issues with the district teams nor the juniors at capital hill. Kodi 92 billion ku contract iliko. k

nick
nick
8 years ago

Whatever the legal niceties may be I have seen the way this Paladin company operates in Malawi. Its executives fly in from Western Australia and behave like South Africans of the apartheid era. 3% royalties to pay for the mess they are making at Kayelekera is like the beads which were once paid to chiefs for African land and slaves. Bullying attitudes towards weak and greedy African leaders are much the same.

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