Paladin to make public Malawi development agreement: ‘To clear the mist’

  • Clarifies on royalty as a result of Malawi’s inability to provide geological database

Paladin Africa Limited (PAL)—owner of Kayerekera Uranium Mine (KUM) in the northern Malawi district of Karonga— says it will make public the full terms and conditions of the development agreement between Malawi Government and the miner to clear the mist.

Critics have been accusing government of benefiting the miners at the expense of Malawians and calling for the deal to be renegotiated.

Nyasa Times understands that Ministry of Mining has asked Paladin to make the full terms and conditions of the Kayelekera Development Agreement public.

The uranium miner has agreed to make the pact public, insisting that Malawi did not get a raw deal.

Walker: The agreement to be made public

Walker: The agreement to be made public

Paladin Africa general manager for international affairs Greg Walker told Nyasa Times: “Paladin replied to the Ministry of Mining on 18 March 2013, indicating that it had no objection since the original request for the Development Agreement to be kept confidential was made by Government.”

Walker added: “Paladin believes that, once the general public has the opportunity to see for itself exactly what is in the Development Agreement, any confusion and controversy will be swept away.

“Unfortunately, with the Development Agreement having been confidential, various individuals have been able to make false claims and assertions about its contents, such as the nonsense you keep repeating that we have failed to rebuild Karonga District Hospital or turn it into ‘a referral facility.’ The Community has been unable to judge for itself the truth or otherwise of those claims.  That will change when Government releases the document, which I hope it will do soon.”

Walker said the company had invested $500 million (K200 billion), which has helped in job creation and that the position Paladin has taken not to renegotiate the agreement was not unreasonable.

Clarification

Meanwhile, Walker clarified that t he 15 per cent withholding tax that Malawi is failing to collect for the mining deal because the country lost geological information for the mine , forcing Paladin to buy it outside the country, does not apply to the royalty paid to the Government of Malawi to the tune of  MWK 76,706,837,839 to-date (as at 28 February 2013).

“Malawi is missing out on this tax revenue is because the Reserve Bank of Malawi (RBM) twice has refused to agree to a Novation Deed which would allow Paladin (Africa) Limited (PAL) to purchase the geological database from Paladin Energy Minerals NL (PEMNL).  This is despite the fact that PAL has pointed out to the RBM that its decision is costing Malawi revenue,” said Walker.

Walker explained that the Central Electricity Generating Board of Great Britain (CEGB) spent US$9 million working on the Kayelekera Project  – included a great deal of drilling of the ore body – over an 8-year period in the 1980s and 1990s, before abandoning the project as uneconomic.

He said the geological information derived from this drilling had not changed, therefore there was no need for Paladin to repeat the work which had already been done by CEGB (although Paladin has done additional work since to extend the ore body).

“As a consequence of the Geological Survey being unable to find the results of this extensive work by CEGB, if Paladin had not been able to acquire a copy of the data from a third party, it would have been necessary to re-drill the resource – at a cost of millions of dollars and an extensive delay in time.  That is why Paladin secured the database from PRI (a US firm),” said Walker.

He said Paladin Group is “a responsible corporate citizen and precisely the type of company that you would want to welcome as a model investor in Malawi.”

Paladin owns 85 percent of Kayelekera Mine while Malawi Government owns the remaining 15 percent.

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