Paladin says uranium benefits to Malawi now exceeds K825 bn
Uranium miner Paladin Energy has comprehensively responded to issues raised by Reserve Bank od Malawi Governor, Dr Perks Ligoya, saying contrary to the cricisim the Kayerekera uranium project in Karonga is bringing more benefits to Malawi exceeding K825 billion (about US$500 million.)
Ligoya criticised Paladin saying Malawi rushed through the process of the Kayelekera uranium mining deal.
He also alleged that there was no accountability in how much money Paladin earned as proceeds from sales of uranium oxide as it did not remit proceeds of uranium sales to Malawi.
Offshore account
In a statement made available to Nyasa Times, the Australia-based uranium miner said there is nothing about the operation of Paladin’s offshore account “which is not completely transparent and already well known to the Reserve Bank of Malawi.”
Ligoya also said that authorities have now agreed with Paladin that Reserve Bank of Malawi will be a co-signatory to the offshore account to “improve levels of accountability.”
But Paladin said there is also nothing new in the announcement by Ligoya of the proposal for the Reserve Bank to become a co-signatory to its offshore account.
“Paladin agreed to this request 12 months ago – it has not happened because the Reserve Bank did not return documentation required by the relevant commercial bank to enable this change,” said the statement.
“The Government of Malawi approves all contracts for sale of uranium oxide before export. The Reserve Bank is fully informed on use of proceeds of uranium sales from Kayelekera Mine,” reads the statement.
Paladin said it provides the Reserve Bank full disclosure – on a monthly basis – of transactions of the Company’s offshore and onshore accounts, including full reconciliation of all exports, proceeds from export sales, deposits into the offshore account, loan repayments and deposits to the onshore account, together with provision of supporting bank statements.
The miner said the central bank is aware that the initial deposit of all sales proceeds into the Company’s offshore commercial bank account is a requirement of the Kayelekera financing arrangements, which were approved by the Reserve Bank.
“The international banks that financed development of the Kayelekera Mine require sufficient funds to meet principal and interest payments to be held in that offshore US $ account. This is to avoid potential default of debt servicing, including those due to foreign exchange shortages such as Malawi now suffers – or through intervention by the Reserve Bank of Malawi,” explained Paladin.
The company said all other export proceeds are transferred from the offshore account to its Malawi account and 40 per cent of proceeds are immediately converted to Kwacha, as required by Reserve Bank regulation.
Benefits to Malawi
The statement noted that Kayelekera Mine is the first large, modern mining project developed in Malawi on an international scale.
“Paladin’s investment in Malawi now exceeds MWK 825 billion (US$ 500 million) – more than any other investment made in the country,” it pointed out.
As a result of that investment, the company informed that Malawi has gained the benefits of:
*Additional foreign currency earnings to-date – MWK 34.9 billion (US$ 207.6 million).
*Purchases of Kwacha with foreign currency – MWK 14 billion.
*Taxes paid to the Government of Malawi – MWK 2.8 billion.
*Royalties paid to the Government of Malawi – MWK 379.9 million.
*Purchases of goods and services from Malawian businesses – MWK 31.4 billion.
The company also said Kayelekera Mine injects MWK 200 million into the Malawian economy every week.
Paladin’s expenditure on social and community projects at Kayelekera (water supply, schools, health,) has been at MWK 2.55 billion.
Expenditure on exploration to extend the life of the mine is at MWK 576.7 million.
The company also offer direct employment of 994 Malawians and indirect employment of thousands more.
Concessions and Conditions
On comments by Ligoya that Malawi gave out “a lot of concessions and funny conditions” , the company reacted by saying that the concessions granted by the Government of Malawi to Paladin “reflected the Company’s role as the pathfinder in developing Malawi’s resource sector and were in line with similar concessions granted to developers in other countries.”
In exchange for those concessions, Paladin said it invested US$ 500 million in Malawi and gave the Government of Malawi a 15 per cent free-carried equity stake in PAL, leading to the benefits to the economy of Malawi.
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