Petra pushes Malawi govt. to re-negotiate ‘stinking’ Paladin deal on Kayerekera mine

Opposition People’s Transformation Party (PETRA) is making a strong appeal to government authorities to re-negotiate with immediate effect what it calls “stinking development agreement” between Malawi and the Australian-based mining company Paladin Africa Limited on Kayerekera uranium mine it is operating in the northern district of Karonga.

PETRA’s President Kamuzu Chibambo has threatened to mobilise members of the general public for unspecific action should government fails to re-negotiate the deal.

He told reporters in the commercial capital Blantyre on Tuesday that the nature of the agreement reached between the two parties left a lot to be desired as it has a lot of loopholes which are not only largely unclear but also disadvantageous to Malawians as they are crafted for the benefit of the mining company alone.

Chibambo cited several areas in the agreement including , long take-off agreement for the US200 million which Paladin entered with EDF of Canada for the supply of uranium from 2019 to 2024 which he said last payment to Paladin to purchase price was to be made by 31 January 2013

Chibambo: Revist the Paladin deal
Chibambo: Revist the Paladin deal

The Petra president who is also a trained lawyer wonders whether the Malawi government collected royalty on the same and if there was any form of security which Paladin use to guarantee future supply of uranium.

Chibambo also faulted the mortgage rights which is under clause 28.5 of the development agreement in which government granted exclusive rights to Paladin to borrow against “all ore and mineral- bearing material, sand, slimes tailings and residues of whatsoever nature located on and under the tenement”

Under such an agreement, Chibambo says Paladin can mortgage all uranium and ore found on and under at Kayerekera or Mchina mine is Nthalire.

He likened the agreement to tenant of a house having power to mortgage the landlord’s house to secure a personal loan saying before the landlord knows it, his/her house could be sold by the tenant’s creditor on account of failure to pay back the loan and/or interest.

“How could government of Malawi give Paladin such a blank cheque? Malawians may soon discover they have nothing at Kayerekera because Paladin’s creditor has taken over the entire mine. Paladin’s creditor like EDF of Canada could claim full right to our uranium in the event Paladin for some reason fails to supply uranium from 2019-2024. This is extremely reckless on the part of Malawi government,” said Chibambo.

He argued that the right to mortgage all uranium deposits at Kayerekera mine is a flagrant violation of Section.12 (1) a, of the Republican Constitution “as the contract terribly fails to protect and serve the interests of the people of Malawi. Government has no right to grant such a wild and reckless right”.

Chibambo said another area of concern on the agreement is on the discovery of additional minerals- under Clause 2.9 of Development Agreement which allows Paladin to inform the Malawi government of the discovery of any other mineral within 30 days of the discovery.

“The problem with such an agreement is that there is no penalty on Paladin in the event of default. It is rumored diamond is also being mined at the site. Government’s attitude is just too simplistic and miserably fails to properly manage this high grade non- renewable resource,” said Chibambo.

Chibambo also faults several other areas including on the treatment of uranium found outside the contract area, inspections, environmental matters- clause 18, environmental performance bond, fiscal regime and attachment bond and training and human resources management which he says should clearly be re-visited.

“The Agreement ought to be re-negotiated to allow government to immediately deploy its own personnel on full time basis to closely monitor all activities going on at Kayerekera mine.

He said in his 31 years as a practicing lawyer he has never seen such a stinking agreement like the one between Malawi government and Paladin Africa limited on Kayerekera mine.

Chibambo and other officials. Far right is vetaran politician Odinga Chifi
Chibambo and other officials. Far right is vetaran politician Odinga Chifi

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