Paladin’s CEO Communicates on Reports that Retrenched Malawian Miners Stormed the Site

Paladin Energy

Last week, 8 February 2013, we posted that an article on Nyasa Times indicated that a group of ex-miners stormed Kayelekera mine, Malawi’s largest mine operated by the Australian company Paladin Africa LimitedThis followed the retrenchment of 110 national employees last month.

According to the news report, the retrenched staff were at the mine to complain about the “raw deal”, including “tax over-deductions, being denied transport to their respective homes and also loan deduction” from their “total dues”. Nyasa Times reported,

Kayerekera [sic] management failed to contain the force they used to break past the security gates to the administration block.

However, today, 11 February 2013, Paladin Energy Ltd.’s CEO and Managing Director, John Borshoff, wrote and published a letter, available online, to clarify details around the incident. He wrote,

Paladin Energy Limited (Paladin) wishes to comment on an online media report originating from Malawi suggesting that a group of recently retrenched employees forcibly entered the Kayelekera Mine on Thursday, 07 February, allegedly posing a threat to Company personnel and property. A group of 32 former employees did enter the Site last Thursday, seeking to complain principally over the decision by commercial banks in Malawi to withhold severance payments in respect of outstanding loans owed to the banks by some ex-employees.

Kayelekera management elected to meet the group, heard their grievances and provided individuals with letters addressed to relevant banks requesting sympathetic consideration of their situation. The group was then escorted from the Site. The situation remained peaceful throughout and the ex-employees presented no risk to personnel or property. They did not attempt to gain access to any secure area on the premises, which nevertheless went into lock-down mode as a precaution. Police reinforcements were called to the Site, but were not required. There was no adverse impact on the Kayelekera operations and production continued as scheduled.

In late January, a total of 110 national employees were retrenched from Kayelekera Mine as part of the cost reduction initiative across the whole Paladin Group announced by the Company in November 2012.
Retrenchments were carried out in compliance with Malawi law and International Labor Organization (ILO) conventions. Affected employees received all due entitlements and termination packages exceeded minimum requirements.

Paladin appears to be on the defensive side of a public relations battle in Malawi. This letter comes amid calls in Malawi for the government to renegotiate the Mining Development Agreement with Paladin and allegations about individuals seeking bribes from Paladin. The company has taken these allegations to Malawi’s Anti-Corruption Bureau for further investigation.

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