The good news coming from Australian listed company Lotus Resources is that results of a Definitive Feasibility Study (DFS) to resume production at its Kayelekera Uranium Mine in Karonga, which is currently under care and maintenance, have confirmed the mining project as a low-cost, quick restart uranium operation.
We consider this as very important news coming at an appropriate time when Malawi needs to utilise its mining sector to solve the current economic problems such foreign exchange shortages.
The DFS report clearly confirms that there are no technical hitches to reopen Kayelekera to start bringing into the country the much needed foreign exchange through the sale of the yellow cake.
However, it seems the stumbling block for Kayelekera to resume uranium production is the conclusion of negotiations for a Mine Development Agreement (MDA) which will assist the investor raise money to kickstart uranium production.
As Minister of Mining Albert Mbawala is quoted in one of our recent reports, the investor is reluctant to sign the MDA crafted using the current Mines and Minerals Act of 2019 and the amended Taxation Act because Malawi would get a lion’s share of benefits from the mine leaving the investor with little returns for its shareholders.
We, therefore, urge government to move fast to make necessary amendments to ensure a win-win situation between the investor and the nation.
With countries competing for foreign direct investment, it is not appropriate for Malawi to stick to clauses in the legislation that are a disincentive to investment.
In Namibia, Australian company Paladin, which mined at Kayelekera, has resumed uranium mining at its Langer Heinrich mine. It is imperative for Malawi to conduct a fact finding study on how Namibia has managed to attract the mining company to resume operations and borrow a leaf from that country.
It is high time Malawi finalised MDAs not only for Kayelekara but also for other large scale mining projects including Kanyika Niobium Project in Mzimba with Australian firm Globe Metals & Mining and Songwe Hill Rare Earth Project with UK firm Mkango Resources.
With these globally significant projects on stream, Malawi’s economic situation will surely move to another level as the country will be able to generate foreign exchange from the sale of mining products, employment opportunities will be created for Malawians and local businesses close to the mines will thrive.
It is high time Malawi moved from singing about the country’s mining potential to talking about enjoying the benefits from the sector.
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