Paladin Energy Limited says the Kayelekera Uranium Mine in Karonga is sitting on more uranium ore deposits which will see the company mining uranium for the next three to five years.
Paladin has also described as “confusion” suggestions that it has completely closed the mine for good, saying the mine has only been placed on care and maintenance and that production would resume if uranium prices rebound on the global market.
Paladin Energy Limited general manager (International Affairs) Gregory Walker said this in an interview in Lilongwe yesterday on the sidelines of a high-level symposium on the review of the Mines and Minerals Act.
Said Walker: “People are confused because they think the mine is closed. There is a difference between care and maintenance and closure. When you close, you begin to dismantle the plant. Care and maintenance means we maintain the plant up until we resume production.”
He stressed that the mine now boasts of about 56 percent of uranium ore resources “sitting in the ground”, saying such an amount of resources could unleash an extra three to four years of mining uranium at Kayelekera.
In recent interviews, many civil society organisations (CSO) implementing mining related projects have been doubting Paladin’s come back to resume production and conclude that the suspension of the mine would consequently culminate into closure.
The decision to suspend the mine, according to Walker, would preserve the remaining ore body until a sustained price recovery occurs and Paladin determines that production may be resumed on a profitable basis.
Paladin blames the plunge in the market price for the commodity, which has been hovering below $30 per pound, down from a peak of around $140 per pound in 2007.
“The resumption in production will very much depend on uranium prices. We have said that we will resume full production when uranium prices get to $70 per pound .Currently, uranium price is $28 per pound,” added Walker.
Towards the end of May 2014, Paladin announced that it had completely stopped uranium production at Kayelekera Uranium Mine and that meant ceasing supplying uranium to the global market.
It has been estimated that the suspension of uranium production at Kayelekera on February 7 2014 will take 3.3 million pounds of uranium per year off the global market.
Minister of Natural Resources, Energy and Mining Atupele Muluzi said in his address that for mining to make tangible economic contribution to the country’s economic growth there is need for concerted efforts, consistent and spirited efforts towards promotion of sustainable mining.