Paladin mine suspension in Malawi above board after all

Thursday, 20 March, 2014

A short article over on Mining in Malawi brings us news this week of progress in a low-key dispute between Paladin, operators of Malawi’s largest mine, the Malawi government, and some sections of civil society.

At the beginning of February, operations at  Kayelekera uranium mine were suspended, and an article in early March in the Nation newspaper later accused Paladin Africa Ltd of thereby flaunting Malawian mining legislation. According to the Mines and Minerals Act Section 46, Paladin or any other mining licence holder, cannot suspend mining without a six-month prior notice to the Commissioner of Mines.  A short PR storm arose.

However, it now appears, and has been publicly explained, that as suspension of production at Kayelekera was decided on 7 February 2014, formal written notification was hand-delivered to the Commission of Mines, giving the justification for suspension as circumstances beyond the Company’s control, and therefore not subject to the six-month limitation.

All is therefore now well, this explanation was accepted at the time, this is now widely understood, and the storm, such as it was, seems to be over. After a meeting in February attended by President Joyce Banda, Minister of Mining John Bande and key stakeholders in Lilongwe and Karonga, a government spokesperson said that while the government regrets mine closure, Minister of Mining Bande has indicated that the government understands the suspension of production was “a business decision emanating from the tumbling uranium oxide prices on the global market.”

Paladin has also disputed reports suggesting that the suspension is because uranium has been exhausted at the mine. Greg Walker, Paladin Africa country manager: “we have said publicly that there are some three to five reserves at the Kayerekera. We are in a rundown phase, that means we will continue producing uranium for another month or so. Kayerekera is not shutting down, clearing and maintenance does not mean closure. It means that the mine is suspending production until such time that it can resume profitably.”