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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29 thoughts on “Paladin rejects Action Aid Malawi report as ‘fundamentally unsound’”

  1. Samarakunjuta says:

    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 anthe same people b

  2. Samarakunjuta says:

    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 and the same people

  3. Boyd Kilembey says:

    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

  4. XYZ says:

    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

  5. nachisale says:

    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.

  6. Victim of corruption says:

    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 Karonga entry to verify the damage only to give them access when the shit was cleaned overnite. There are more live allegations to put Paladin down and Walker thinks he is too smart over blind poor africans. Am afraid this kind of gesture by Walker will one day make more things to be revealled and exposed. Remember you can bribe people sometime but you cant bribe all the people all the time.

  7. zingati zanu says:

    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.

  8. Strange INGO says:

    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

  9. Enukweni says:

    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

  10. nick says:

    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.

  11. Atcheya says:

    Action Aid is well-known for producing media-sensational reports that are not backed by evidence. I know of a number of reports the INGO has produced globally that cannot be substantiated. I am not surprised that they got it wrong again this time around. Much as we may not be happy with Paladin, it is unfair to blame them basing on an unsound research. I can cite a lot of positives (and negatives as well) that as a country, especially Karonga and its neighbours have benefited from Paladin. We seem to be missing the big picture here and dwelling on trivialities.

  12. Mtoloboy says:

    White man do not cheat us on Paradin , you are just defending your job but we know the truth based on the Action Aid report… i know why you are refuting what the report exposes because you do not value THE HARDSHIPS MALAWIANS are going through….we will keep on exposing such malpractices until you stop

  13. Alex Likoswe says:

    Australians are deccendants of convicts. What else do you expect from such a pedigree . Convicts breed convicts

  14. zonse ndi nthawi says:

    Malawi does not have competent resources to understand such complex deals.. we are being exploited by this company..

  15. frankkaponda says:

    A choke

  16. Victor Jumbo says:

    I think the problem is with the Malawi Government for choosing incompetent people or representatives who have NO EXPERTISE in such fields of negotiations. The foreign investors have professionals with vast experiences in negotiations with various governments in the world. Therefore, mines negotiations with INCOMPETENT MALAWI GOVERNMENT REPRESENTATIVES makes the outcome favouring them more than the Malawi Government and the poor people. It’s a shame, this is another Day light Robbery. please do something.
    Victor Jumbo, UK

  17. zakusimba says:

    Walker is crook. Period. It is because of greedy Malawians. Full stop.

  18. mphini za mutchafu says:

    A big organisation like action aid would have done better their report is not sound and intelligent it is sensational and aimed at creating hatred and animosity towards an innocent company paladin

  19. mphini za mutchafu says:

    The clarification by paladin is sound and intelligent Action Aid phuma they didnt understand clearly the paladin tax matters and furthet they rushed the report of their studies without consulting paladin. Jow can yhey say the actions of paladin are legal but accuse it of tax cheating as it appears very stupid careless misleading studies ee malawians we are over accusing and over reacting to paladin affairs

  20. Msundu wa Gwalawala says:

    Greg Walker: Don’t think that we are stupid and can be confused by your pseudo jargons. The factory is that you are devil and Paladin hired you
    because you are an expert in communicating lies that sound convincing. I have been following you and wherever you have worked all you have done is to fool naive leadership like DPP goats.
    Know That You Cannot Fool All People All the Time.

  21. Boss says:

    Eeee, this Walker guy is a tough guy

  22. wamunthalika says:

    Bill s…..t

  23. Professor Seyani says:

    Kayereka deals symptomatic of greedy politians from Thyolo. Part of Kayereka money and Nsanje World inland port used to built Ndata. Uyuyu nso wagula estate ina ku TO kuti amangekoso mausoleum yake, casablanca mano, stadium and high school. Very nepotistic, tribalist and above all udzikonda koposa mulingo. Infact peter used to engage in money laundering. Especially muja amathawa

  24. Ineyo says:

    Since this paladin started mining, all we hear are controversies, why are we still in contract with it? Why is Malawi, the owner of the earth being extracted failing to have control over this paladin? This is surely raises questions and confirms reports of corruption during the time this contract was being negotiated (if at all it ws negotiated). And it was the DPP goevernment, with Mr. Goodall Gondwe leeding the negotiating team, and we hear 1 of the benefits is the mansion he begot in area 43, and we still have the same person, very old as he is, as a Minister. When will this country become serious about everything? It hurts

  25. Dusty says:

    These miners will not accept the truth but will always refute the truth.They will never take the concerns of Malawians and our government is still sleeping waiting to receive fat envelopes from these crooks.

  26. Tengupenya says:

    One is talking of loss in tax, the other is talking of gross benefits. Both sides may be saying the truth here! What none of them is saying is whether the compromise negotiated by Paladim in the beginning should now be revised to a new equilibrium of mutual gain.

    The objective problem being discussed concerns the reconciliation of contradictory objectives where business optimizes its costs and governments or civil society optimizes its gains from businesses. The reconciling matter is the business must survive for both government and business to realize their exclusive objectives. Thus both are forced to either reach a compromise for mutual benefit, or hold their exclusive desires for MAD (mutually assured destruction) of their prospective gains of cooperation.

  27. THE WISE ONE says:

    Mwavomera kuba basi s Walker

  28. tchadiwiki says:

    Shrewd and deliberately complex tax, royalties calculations to mask the real economic exploitation of a natural resource which was best left intact in the ground till such a time the host nation can overcome such shrewd tactics.

    Can someone point out real evidence of economic benefit Malawi has gained from Kayelekera mining project???

Comments are closed.