Govt, investor in stalemate on Kayelekera

Malawi Government and Lotus Resources Limited, an investor in Kayelekera Uranium Mine in Karonga, have hit a deadlock on how much tax should be levied on profits before they can seal the Mining Development Agreement (MDA).

The two parties are also stuck on the type of chemicals which can get concessions before an MDA is signed.

The government said the matters remain sticky and can either make or break the dealwhile Lotus, on the other hand, says they have already resolved these matters.

The two issues, among others, will form part of the fiscal regime which the MDA has to set. It is a regime in which the project will operate and is one of the inputs the company is seeking prior to making its Final Investment Decision (FID) for the restart of Kayelekera.

In an interview Wednesday, Secretary for Mining Joseph Mkandawire hoped that the discussions will be completed soon, but could not be specific on time-frames.

He said: “These are negotiations and it’s not only the government, even themselves as a company, that are involved. We look generally at the fiscal regime and they want some concessions and these are issues that we are negotiating. ”

But Lotus Resources managing director Keith Bowes said the matters have been resolved.

He said: “We will buy chemicals and reagents that are available locally from local suppliers, only reagents and chemicals not available in Malawi will be brought in from overseas.”

Resource governance advocate Kosamu Munthali has since hailed the government for the move, saying the country lost a lot during the first stint of production for Kayelekera, and does not need to repeat the same.

The company wants to start production in 2025. Uranium spot price increased during the December 2023 quarter from a low of $69 per pound to finish the quarter at $91 per pound.