Tomorrow morning, 17 June 2015, ActionAid Malawi will launch a study report on Paladin Africa Ltd, a subsidiary of ASX-listed Paladin Energy, and its mining operations in Malawi. The event will take place at Crossroads Hotel in Lilongwe and starts at 9am.
Paladin Africa Ltd operates Malawi’s largest mining project, Kayelekera Uranium Mine, in northern Malawi. However, in February 2014, the company announced that production would be suspended at the mine due to the ongoing low prices of uranium oxide. Production will recommence once 1) the mine is connected to Malawi’s national electricity grid and 2) the price of uranium oxide reaches approximately USD75/lb.
According to ActionAid’s Country Director, Martha Khonje,
Under this study, ActionAid focused on the operations of this company and particularly how it negotiated harmful tax incentives and used tax planning that facilitated tax avoidance. The report estimates that since Paladin started its operations, Malawi has lost $43 million which could have financed a number of important development activities in the country. The report further proposes recommendations to various stakeholders particularly government to ensure that such problems are addressed and not repeated in future for purposes of ensuring that Malawian government maximizes revenue from such deals for the benefit of the entire population.
This is not the first time civil society in Malawi has conducted studies on the fiscal arrangement between the government and the mining company. In May 2013, the African Forum and Network on Debt and Development and the Malawi Economic Justice Network launched the report “The Revenue Costs and Benefits of Foreign Direct Investment in the Extractive Industry in Malawi: The Case of Kayelekera Uranium Mine” and a few months later, in June 2013, the Catholic Commission for Justice and Peace, the Evangelical Association of Malawi, and the Episcopal Conference of Malawi launched the report “Malawi’s mining opportunity: Increasing revenues, improving legislation”.
Paladin Energy publishes its responses to non-governmental organisations and the media online.