By Cathy Maulidi:
Expectations are high that Kayelekera Uranium mine will reopen towards the end of next year following Lotus Resources’ announcement of a financing agreement to facilitate resumption of operations.
Meanwhile, the Malawi Government is still negotiating with the company on a new Mining Development Agreement (MDA).
Kayelekera Uranium mine was shut down in 2014 when the then owner Paladin Africa placed the mine under maintenance after global uranium prices collapsed in the wake of the Japanese nuclear disaster.
In a statement announcing the appointment of a debt adviser to help finance the resumption of the agreement signed by Lotus Managing Director Keith Bowes posted on the company’s website, the company provided insight into its timetable for resumption.
According to the statement, Lotus has selected the debt adviser Orimco, based on its demonstrated track record, knowledge and experience arranging debt for resource projects in Africa and globally.
“Our appointment of a debt adviser is a key step in advancing Kayelekera towards FID. Orimco will assist Lotus in arranging cost-effective debt to help finance Kayelekera’s restart while reducing dilution of existing shareholders. Orimco brings a high level of expertise and deal experience, and we look forward to working closely with them.
“Our recent A$30 million placement to strategic investors has allowed Lotus to accelerate the Kayelekera Feed studies, whilst also providing sufficient funding to place orders for long lead items and undertake the early work programmes so we can de-risk the refurbishment timeline and provide more confidence in achieving an end 2025 start date for the mine,” the statement reads.
It further indicates that a Definitive Feasibility Study (DFS) has shown that Kayelekera needs a $88 million (about K154 billion) investment to restart with production expected for 10 years.
Speaking to Times Business, Minister of Mining Monica Chang’anamuno said government is still working on the MDA and once is done, the mine will be up and running.
“It is not only us; they have a role to play on the agreement. Once we both agree, the mining work will resume,” Chang’anamuno said.
On his part, Attorney General (AG) Thabo Chakaka Nyirenda said government is working on a best deal for both parties.
“We are still working on the MDA; we are trying to come up with the best deal for Malawi, once we are done and we agree, the mining at Kayerekera will start,” Nyirenda said.
Lotus owns an 85 percent interest in the Kayelekera Uranium Project in Malawi and 100 percent of the Letlhakane Uranium Project in Botswana. Kayelekera is the fourth largest uranium asset globally by historical annual production.
The closure of Kayelekera has had a crippling effect on the country’s economy.
The mine was operational after being commissioned in 2009, posting economic growth which has not been matched since.
In the meantime, the country’s major export commodity tobacco has continued to struggle due to the growing anti-smoking lobby.
