Minster of Mining, Rashid Gafar, has indicated that there will be no tax holiday for Lotus Resources Limited as it embarks on mining of uranium at Kayelekera mine in Karonga District.
Gafar said this when he visited Songwe Hill in Phalombe District where another mining company is conducting exploration works for precious metals.
He said Malawi had a raw deal with the previous managers of the Kayelekera mine, Paladin Energy and failed to significantly benefit from it.
“Kayelekera could have contribute 10 percent of our national budget yet we had a raw deal there, if we had done a good deal with Kayelekera it would have contributed more than 10 percent.
“Paladin had a tax holiday. Now the mine was sold to Lotus, they will not have a tax holiday again, we are going to make sure they contribute,” Gafar said.
Chairperson for the Natural Resources Justice Network, Kossam Munthali, concured with the government that Malawi has lost a lot of revenue from the sector through tax holidays.
“We have had enough of tax holidays, we need to redesign our economic model that should be able to look at all these parameters.
“…for each and every company that is going to come, we need to work with them based on the lessons that we have learned from the Paladin deal. The government should holistically look at the terms and put Malawians first,” Munthali said.
Lotus Resources Limited General Manager, Theo Keyter, decline to comment on the matter saying he had not received any communication from the government.
“I will not comment on that because I heard nothing from government yet on that issue, that’s news to me now and I can’t comment before I get any response from government,” Keyter said.
Last year, dual-listed miner, Paladin Energy Limited, announced intentions to offload its 85 percent stakes in Kayelekera mine, a move that attracted mixed reactions.
Lotus Resources completed the acquisition of the Kayelekera Uranium Mine in March this year from Paladin Energy.
Paladin invested more than $200 million in plant and infrastructure and produced uranium from 2009 to 2014.