Last week, Kamuzu Chibambo, president of the opposition party, People’s Transformation Party (PETRA) launched the third liberation movement for Malawi amidst calls for Joyce Banda’s government and Paladin to renegotiate a mining agreement made for rights to extract uranium from the mine Kayelekera in Karonga.
Both Paladin’s Greg Walker and Malawi’s Minister of Mining, John Bande, reacted negatively to these calls.
Currently, the Mining Development Agreement signed between the Government of Malawi and Paladin is bound by a non-disclosure agreement. However, Bande announced, according to Malawi Voice, that this may not be the case for much longer,
One of the challenges affecting the mining industry in the country is that it does not have a public relations office. This has led to people missing valuable information regarding the field, a development which has translated into most people making negative comments out of ignorance.
Very soon, we will make public government’s agreement with Paladin Africa so that Malawians are able to appreciate its contents, thereby making informed comments.
In fact, on Friday, Bande also emphasised the need for foreign investors as he was touring Eland Coal Mine, Mwabulambo, and Kayelekera Uranium Mine, Karonga. The Nation reported that he said
As someone who was at the Ministry of Trade, such talks [accusations] are setbacks on investors.
In response to Bande’s call for mining companies to add value to their products in Malawi before they export so as to generate much-needed foreign exchange, Eland Mining Company and Paladin described some of the ways they are contributing to the country’s economy. Bande’s words will not stick if future agreements between the government and companies do not bind companies to value addition in country.
Mayamiko Mwinjilo, head of sales and marketing for Eland Mining Company, said that the coal company adds avalue before export 85% of coal to Kenya and Tanzania.
We produced pure coal that is why our coal is doing well on the international market. After crushing, the coal is spearated from other materials with magnetite and the coals is washed with water. Buyers prefer washed coal.
Walker, who was on the receiving end of much criticism last week after Chibambo’s launch of the third liberation movement, explained that government, which has a 15% stake in the Kayelekera Uranium Mine, needs to be involved in improving Paladin’s image.
Paladin has introduced USD 145 million in additional funding to sustain Kayelekera in 2010-2011 and has made provision for a further USD 79 million this financial year. Paladin’s corporate loss in Financial Year  was USD 172.8 million up from the USD 82.3 million.
The Government of Malawi is a 15 percent stakeholder, but under the terms of the Development Agreement, has not been required to make any financial contribution to this financial burden, saving the government USD 27.75 million to-date.
“Renegotiation” is on the lips of many observers which hints to the need for greater dialogue in the mining sector. So far, we have not seen this. Instead we continue to witness stand-offs between and within civil society, the national assembly, government and the mining companies.
Making public the mining agreement is a step in the right direction, but it is not enough. It is critical that government is investing the money received in taxes and royalties from mining companies in areas that will have a long-lasting impact on Malawi’s economy and future generations. As one commentator rightly concluded, “This mine is our asset and we must see the benefits now and generations to come”.
For some indicators of good governmental management in this sector, read our blog post “How to tell when your country is managing its riches well – Giugale“.