Paladin’s Malawi uranium deal: PETRA calls for combined forces against exploitation

Malawi’s opposition party, People’s Transformation Movement (PETRA), says Malawians need to combine forces if they are to effectively fight any form of exploitation by foreign businesses.

PETRA’s remarks follow Paladin Africa Limited’s declaration that it will not renegotiate the Kayelekera uranium mining agreement with the Malawi government until the expiry of the current 10-year contract.

Last week, PETRA president Kamuzu Chibambo told reporters in Blantyre that his party was giving Malawi Government a 14-day ultimatum to explain why the Kayelekera deal cannot be renegotiated.

PETRA’s move is as a result of growing discontent among Malawians over the contract which is evident that the previous government (of late President Mutharika) was given a raw deal by the Australian mining company.

Chibambo: We will fight against exploitation

Chibambo wants government’s stakes in the mine increased from the current 15 to 40 percent.

But in its response to the issue, Paladin declared that it will not renegotiate the existing contract as it invested a lot of money in the project basing on terms agreed in the contract.

“We will not renegotiate the agreement. And people think that terribly unreasonable. But it is not. The fact that Malawians think they got a raw deal doesn’t necessarily mean they did get a raw deal,” Paladin Africa’s General Manager for International Affairs, Greg Walker was quoted by the Daily Times.

While warning that any attempts to forcibly change the terms of the agreement would damage Malawi’s reputation as an investment destination, Walker insisted his company would stick to the existing agreement and expected the Malawi government to do likewise.

According to Walker, one of the clauses included in the agreement is that the government will not take any action that will seriously change the financial aspects of the project for a period of 10 years.

However, hitting back at Walker, the opposition leader affirmed his party would not relent but continue fighting against the exploitation.

“We are currently studying their response. But we just don’t buy their explanation. We will fight for the good of the country against any form of exploitation,” Chibambo, a lawyer, told Nyasa Times.

However, the opposition politician is pretty conscious that the fight requires a strong combination of voices if it is to be easily won.

“Of course the previous regime [of Bingu wa Mutharika] terribly failed the people of Malawi. So the onus is on all of us to seek redress. This is a noble cause that requires a strong coalition of voices,” he said.

Paladin claims Kayelekera is a high risk investment considering the volatile prices of uranium on the international market and the fact that Malawi has no track record in terms of handling a high scale foreign investment.

However, the company’s claims are in sharp contrast with the production outcome which, for instance, last quarter ended December, surged by 20.9 percent, according to its December 2012 Quarterly Activities  Report.

Paladin is reported to have invested in the project about US$500 million.

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