MIF:PALADIN BEMOANS UNREALISTIC EXPECTATIONS

Dual-listed Paladin Energy Limited, through its subsidiary Paladin (Africa) Limited, which owns Kayelekera Uranium Mine (KUM) in Karonga, has pounced on Malawians for habouring “unrealistic” expectations from foreign mining investors.

KUM was put under care and maintenance in February 2014
KUM was put under care and maintenance in February 2014

“One of the things that clearly comes out of our experience and that of Globe Metals and Mining is the level of misunderstanding in the communities around the mines and, in particular, the problem of unrealistic expectations,” said PAL resident director Gregory Walker exclusively to Business News in Lilongwe on Monday on the sidelines of a mining cluster meeting during the just-ended Malawi Investment Forum (MIF) at the Bingu International Conference Centre (Bicc).

Walker was one of the panelists during a mining sector breakaway session.

The Malawi Government holds 15 percent stake in KUM while the majority 85 percent is held by PAL and such a shareholding structure has been a bone of contention since the mine started operating as some Malawians feel that government should have held the majority stake.

Said Walker: “For instance, there are unrealistic expectations on how much money will come out of the project and when people are going to see the benefits of the mining project flowing.”

He said Malawi needs to educate the communities on the capital intensive nature of mining activities such as KUM.

Walker said Malawians ought to be fair considering that KUM is the first biggest mining development venture in Malawi, which brought in investments amounting to $620 million (K297 billion).

Reacting to Paladin sentiments, Minister of Natural Resources, Energy and Mining Bright Msaka said revised Mines and Minerals Act would address most of the challenges that have been there between mining investors and communities.

“Once this piece of legislation is passed, there will be no continuous demand from communities on corporate social responsibility projects because a proportion of the mining sales from a company will go to the community and will decide what to do with the money,” he said.

Msaka said in the absence of the revised law, there are growing challenges where communities keep on demanding from the mining company and that puts them under unnecessary pressure.

Paladin placed KUM under “care and maintenance” on February 7 2014 and ceased uranium ore exports, citing low uranium prices on the global market.

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