Paladin, govt still upbeat on KUM
Paladin (Africa) Limited (PAL), the operator of Kayelekera Uranium Mine (KUM) in Karonga, has assured Malawians that the mine will resume operations once the global price of the yellow cake is favourable and there is adequate power.
The mining firm suspended uranium production at KUM in February 2014 and put the mine on care and maintenance when the price of the yellow cake on the global market was below $30 a pound.
PAL wants global uranium price to reach between $70 and $75 per pound. However, the spot price of the mineral has been hovering between $30 and $37 per pound in recent years.
Responding to an e-mailed questionnaire on Saturday, an official from PAL said by putting the mine’s processing facilities on care and maintenance, it means they can kick-start operations as soon as the spot price is favourable and Electricity Supply Corporation of Malawi (Escom) power is available.
He said: “We are optimistic and are still spending considerable amounts of money to keep the operation on care and maintenance in readiness to start up.”
The official, who did not want to be named, said they are also banking hopes on 22 new nuclear reactors under construction in China alone, with India and Russia planning six and eight reactors, respectively.
He said there are also more reactors planned in the Middle East, which is good news for uranium mining.
“There is a lot of thought out there on the new nuclear reactors. As these reactors come on line and the reactors currently off line in Japan are brought back on line, which I understand is over 20, hopefully the price should go up due to supply and demand,” he said.
The global uranium price has hit an 11-year low and the market is still suffering from inventory built up before the Fukushima nuclear disaster in Japan in 2011, which slashed projection for demand.
This caused uranium prices to fall by almost 60 percent from a record of more than $70 a pound.
Ministry of Natural Resources, Energy and Mining spokesperson Ayam Maeresa in an interview last week government is hopeful that prices will start picking up on the world market for the mining sector to bounce back in business.
He said: “Despite the situation that is currently obtaining on the world market, there is a promising future for uranium. We are aware that there are nuclear reactors reported to be under construction in China, India and Russia.
“We are hopeful that the coming on line of these nuclear reactors will no doubt push up the demand for uranium and Kayelekera Uranium Mine will benefit from this.”
Maeresa said government has liberalised the power sector to enable Independent Power Producers (IPPs) play a role in the generation of electricity in the country as a way of cutting production costs at KUM.
He said government taken major steps in restructuring the sector to create a conducive environment for private sector investment in the industry.
Maeresa could not hide the fact that the suspension of uranium operations at KUM is, to some extent, a considerable cost to the Malawi economy.
He said: “Government is no longer collecting mineral revenue in form of royalties from the mine since there is no production and a good number of Malawians and non-Malawians alike have lost jobs at the mine.
“Supply of goods and services to the mine have hit rock bottom and this is no pleasing development. We only hope this situation will reverse when the mine comes back on stream as soon as uranium prices improve for the better.”
At the height of production at KUM, the mining sector was contributing about seven percent to the gross domestic product (GDP).
According to the 2016 Annual Economic Report, revenue generated from the mining sector between July 2015 and April 2016 dropped by 90.5 percent to K161 million from K1.7 billion. n
