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Malawi rakes in $52 million from Kayelekera in 13 years

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Kayelekera Uranium Mine claims has contributed about $42 million (about K42 billion at the current exchange rate) in taxes and $10 million (about K10 billion) in royalties to the economy of Malawi since the opening of the Karonga based mine from 2008 to 2021, figures from the company indicated.

According to the figures the mine has used about $18 million (about K18 billion) in various social development in the country

However, since 2004 the mine has been on care and maintenance costing the company over $49 million

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Speaking after Minister of Mining Albert Mbawala visited the mine on Wednesday, General Manager for the Mine, Theo Keyter said they will be opening the mine soon as uranium prices have started picking up.

“Of course, there is no income, it’s only an outflow of money but we want money to be flowing into the company, so we would like to start up this mining, I can tell you that in 2020 when we took over the mine, the uranium price was $24/lb and currently it is $51/lb, so we are going in the right direction and it looks good.

“We are looking at buyers and we are busy with negotiations. Our head office in Australia is looking for deals that we can have negotiated price for our product,” he said.

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Asked to comment on the ongoing discussions with the government as it seeks to renew its mining license and strike a new deal, Keyter declined to remark saying: “it works in progress, I am not going to comment now, we have another session next week on Tuesday, let’s see how it goes,” he said.

Lotus is seeking a similar set of conditions as were contained in the original agreement with Paladin.

In that agreement, the government had a 15 percent stake in the mine, five percent royalties, and corporate taxes among others.

Commenting on the development Minister of Mining Mbawala said the government has been getting low revenue as the mine has not been operational.

Mbawala added that due to the care and maintenance status a lot of people have lost jobs as currently there are about 17 employees from the over 800 the company had.

“We are currently negotiating and we are taking time because we want to have a better deal. On the 15 percent stake, basically what is in the law is 10 percent but here we have 15 percent which is on the higher side. Mind you this is a free carry, we do not invest any money. We are getting it for free as a country because these are our resources. But apart from the 15 percent, we have corporate tax, royalties and other taxes. If anything we are getting over 50 percent. Right now we want to be getting 65 percent of the revenue, so they are trying to negotiate so that we should be atleast 60 percent. We are in control,” he said.

Mining Expert from Church and Society of the Livingstonia Synod of the CCAP Paul Mvula said from the onset, that the Kayelekera project has been a raw deal for Malawi.

Mvula said the development agreement which the government signed with Malawi mentioned constructing a secondary school which never materialised.

“It took Civil Society organisations pressuring the company to do the health centre at Kayelekera which by any current standards leaves a lot to be desired. The same Kayelekera was able to give meaningful developmental projects in Angola and elsewhere but none of such sort here in Malawi. For instance, elsewhere, the company was able to offer internships and education scholarships to youths in those countries but here in Malawi, none of such sort. In Malawi, politicians and those connected to the government were the ones that highly benefited,” he said.

The Australian-based exploration company Lotus Resources Ltd acquired Kayelekera Uranium Mine from Paladin Energy which managed to produce 10.8 million Ib of uranium from 2009 to 2014 before it was put on care and maintenance.

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