Uranium and rare earth ventures begin
Ministry of Mining on Friday signed mining development agreements (MDAs) with two companies, Lotus Resources Limited and Lancaster Exploration.
Lotus Resources Limited will resume mining of uranium at Kayelekera in Karonga District while Lancaster Exploration will commence mining rare earth at Songwe Hills in Phalombe District.
Speaking during the signing in Lilongwe, Minister of Mining Monica Chang’anamuno said that the anticipated annual revenue for Lotus Resources Limited is $1.6 million in dividends, $20 million in royalties and other taxes only if the uranium price is at $65/ pound.
She added that the anticipated revenue for Lancaster Exploration is $120.6 million in royalties, dividends and other taxes.
She said: “Lotus is expected to create 450 direct employment and 200 indirect jobs of up to 200 workers. As for Songwe Project, it will create over 1200 jobs during the 2 year construction period and, then 500 jobs per annum during the 18-year mine life and 10000 indirect jobs.
The minister also urged the two companies to meet their obligations by, among other things, mobilising themselves as soon as possible so that mining activities can start.
In an interview Lotus Resources Limited managing director Keith Bowes said they will start signing contracts with potential customers, adding that the company plans to have Kayelekera Mine up and running in two years.
Bowes also indicated that a team is expected to leave for the United States of America at the weekend to meet some nuclear utilities and negotiate for contracts.
He said: “So because it already exists, the mining has been on current maintenance for the last 10 years, what is required to restart that plant is a lot easier than if we were starting off what you would call a green field project where you have to build everything.”
On his part, Lancaster Exploration founding director and Mkango Resources president Alex Lemon said a feasibility study was completed in July 2022 and environmental impact assessment (EIA) was signed in January 2023.
In his remarks, Minister of Finance and Economic Affairs Simplex Chithyola Banda urged the companies to process and add value to the minerals.
Speaking when he opened the inaugural Mining Investment Forum in April in Lilongwe, President Lazarus Chakwera was optimistic of Malawi benefiting from the sector, saying government will ensure mining deals are fair to Malawians and that previous MDAs are reviewed to remove exploitative elements.
“We must refuse to sign mining development agreements that do not provide benefits to Malawians who are the owners of these mineral resources,” he said.
Despite huge mineral deposits, some in world record quantities such as the Kasiya rutile in Lilongwe and rare earths in Phalombe, the mining sector is contributing less than one percent to the country’s economy, but government is seeking to raise that to at least 10 percent by 2030.
The Malawi Government earmarked the mining industry as a key sector of the economy with potential to contribute to economic growth and job creation.
