Faced with delayed connection to the national grid, Lotus Resources Limited, a company which owns Kayelekera Uranium Mine in Karonga District, says it will resume long-awaited production in September using onsite diesel-powered generators.
But in its quarterly activities report, the firm said it positive that the mine will be connected to the national electricity grid during the latter part of 2026 as it is procuring relevant equipment for the project.
Reads part of the report: “Lotus’ advisers completed a tender process for substation works and transmission line construction.
“Production restart to utilise existing onsite diesel power station as an interim measure until the grid connection becomes available and refurbishment of the onsite diesel power station is well advanced.”
Electricity Supply Corporation of Malawi (Escom) chief operations officer Maxwell Mulimakwenda, while acknowledging that the mine will restart before connection to Escom grid, said the delays have nothing to do with the sole power supplier.
He said based on the agreed deal, the power line construction will be handled by Lotus Resources with Escom deducting the costs from the tariffs.
Said Mulimakwenda: “Firstly, as you know they [Lotus] had to conduct environmental and social impact assessment on the route through which the power line and other electricity infrastructure would be constructed and the route had to be diverted to protect some special species.
“But again, through the deal, Lotus is financing all that infrastructure. We will only connect the electricity upon the completion of construction and the agreement is that we will be deducting the costs from the tariffs.”
Commenting on Escom’s capacity to supply enough power for the mining project, he said Lotus applied for 7.5 megawatts (MW), which can easily be supplied considering that it will be getting 50MW from Mozambique through interconnector project, which will be commissioned in September this year.
Among others, Lotus Resources plans to link the mine through a new 66 kiloVolt transmission line and a substation built on-site.
The firm is funding the project exclusively under a $20.6 million (about K36 billion) initiative called Project Powerline.
Upon commissioning, the facilities’ ownership will be transferred to Escom, which will then supply power to the mine.
The agreement spans for 10 years, allowing Lotus Resources Limited to terminate the pact early with a 30-day notice.
Geologist Ignatius Kamwanje, who previously worked at Kayelekera Mine, said in an interview on Monday that although the diesel backup is critical considering the unreliability of Escom electricity, running the diesel power stations could be costly.
He said: “From experience with Kayelekera, it would be cheaper to use electricity from Escom grid than diesel generators.
“Though diesel generators increase efficiency by reducing operating costs, it is still expensive considering power consumption per run time compared to electricity from Escom grid.”
Lotus Resources devised a hybrid electricity supply system, which would see Escom power being the main source with its co-generating system and solar, leaving only 10 percent of the electricity shortfall that will be generated from the diesel generators.
In July last year, the Malawi Government signed mining development agreement with Lotus, owning 15 percent stake in the mine.
The deal also includes five percent royalty of gross revenue, 30 percent corporate tax rate and 10 years tax loss carry forward, among others.
