Lotus hopeful of Escom power
Lotus Resources Limited says it is optimistic of connecting Kayerekera Uranium Mine in Karonga District to the national grid and access affordable power, a critical component that could lower operating costs reported in its Definitive Feasibility Study (DFS).
The company, which recently signed a mining development agreement with the Malawi Government to reopen its mine, said in its 2023 annual report that it is working towards a Power Implementation Agreement and Power Supply Agreement with Electricity Supply Corporation of Malawi (Escom) .
Reads part of the report: “As the Restart DFS highlighted, connection to the Malawi national grid, which is sourced predominantly from hydro is a critical part of Lotus low carbon strategy.
“During the financial year, Lotus, assisted by its technical consultants, worked with Escom to define the optimal grid connection solutions and the associated power reliability and upgrade costs.”
It says the preferred options will be taken forward to the next stage, which will involve a commercial working group to consider the business case for upgrades and new installations required, including negotiating the electricity tariffs that will be applicable to Kayelekera.
Lotus said the project requires $88 million (about K154 billion), ranking as one of the lowest capital cost uranium projects globally that includes $13 million (K22.7 billion) for connecting to the national grid.
Escom chief operating officer Maxwell Mulimakwenda asked for time to respond to our questions, but Ministry of Energy director of electricity Million Mafuta said in an interview that there is enough power to connect Lotus and other mining firms to the grid.
He said: “As of now, we have the required capacity to connect Kayerekera Mine, which initially seeks less than 10 megawatts [MW].
“Apart from Lotus, we also received a request from Lindian Resources Limited, owners of Kangankunde Rare Earth Project in Balaka District which wants 10MW.
Mafuta said unlike the Kangankunde Mine, which indicated that they will construct the line on their own, are still waiting to hear from Lotus on whether they will take a similar route.
Despite reported power projects delays like the independent power producers (IPPs) and Mozambique Power Interconnector, Mafuta remains optimistic of meeting Lotus’ deadline, saying the country will have tapped 50MW from Mozambique by 2025.
Meanwhile, Ministry of Energy Principal Secretary Alfonso Chikuni said although total demand of the emerging mining sector and the Lilongwe Industrial Park will be 300MW and 75MW respectively, the ministry is optimistic because it will be rising gradually.
Natural Resources and Climate Change Committee of Parliament chairperson Welani Chilenga expressed fear that the slow progress of most energy projects could affect the booming mining industry.
“With government having signed the mining development agreements with Lotus and Mkango, these big projects will need more electricity, but as we speak, there is no power connection at Songwe Hill in Phalombe where Mkango has the project,” he said.
Initially, Australian mining company Paladin Energy used to operate the Kayerekera Uranium Mine using diesel-powered generators under an almost similar MDA with the Lotus Resources, but the cost of running the generators proved expensive.
The company run the mine for five years from 2009 to 2014 when it suspended its activities and put the mine on care and maintenance following the plunge of uranium prices on the global market, which rendered the mine less profitable at the time.
However, Lotus is set to restart the project after observing the increasing global uranium prices that, coupled with the projected cheaper operationscosts of using the Escom power, has proved the project restart a viable case. The country’s current generating power capacityis at 554.24MW.
