Malawi’s Minister of Mining John Bande says government is yet to decide on whether to renegotiate a deal it signed with Paladin Africa, the firm mining uranium at Kayelekera in Karonga, currently under intense criticism.
The Kayelekera Development Agreement saga gives Malawi 15 percent local stake in the mining project, but critics consider this to be on the lower side and have been pressing government for renegotiation.
In an interview on the sidelines of a stakeholders meeting which has also attracted an international mining law expert, Bande said government is still studying the Kayelekela deal before making a decision.
He said: “We cannot say whether we will go into renegotiations or not, we have to study the Kayelekera agreement deeper before taking a stand. We are looking at previous contracts and there are some we may touch others not. But we do not want to dwell much on that much as issues of the past are for us to learn from.”
The stakeholders meeting is scrutinising a draft agreement between the Government of Malawi and Global Metals of Australia, which will be mining niobium in Mzimba.
According to Bande, the would-be agreement with Globe Metals is intended to be a model arrangement which will form basis for future such agreements.
After the scrutiny, government will them bring Globe Metals back on the negotiating table to decide the way forward.
Malawi is negotiating for a better cut in the niobium project, much higher than the raw deal it got in the Kayelekera project.
Instead of Globe Metals paying up to three percent in royalties, Malawi Government is negotiating for five percent as stipulated by law.
Malawi also wants up to 30 percent local stake in the project to ensure maximum benefits for the country.
Said Bande: “We have invited international legal experts on mining to help us. In the longterm, they will help with capacity in terms of negotiating effectively on mining deals. Now Malawi has better focus on mining sector as well as issues around it.
“Before, we were very careless on issues to do with contracts. No wonder we have contracts in question by the general public and we do not want a repeat of that.”
International mining law expert from the International Senior Lawyers Project (ISLP), Mark Goodrich, said the mining sector in Malawi and elsewhere remains attractive such that there is need for proper scrutiny before signing agreements.
“There is need for governments to create a win-win situation for both mining companies and government. Malawians deserve better mining deals. In order to achieve this, there is need for expertise to help in coming up with modern mining laws and policies as well as good mining policies,” he explained.
