In January 2013, Kamuzu Chibambo of the People’s Transformation Party (PETRA) gave the Malawian government and Paladin Africa Ltd a 14-day ultimatum to explain why the Mining Development Agreement between the two parties cannot be renegotiated. This agreement has come under fire from different parties over the last few years.
The ultimatum passed with government announcement that consultations were underway to discuss calls for renegotiation and the Minister of Mining John Bande indicated that the agreement would be made public. Currently, only some terms of the fiscal regime in the agreement are known and it is not clear if the Ministry of Mining will follow through with the promise to publish the agreement.
Last week, Chibambo renewed calls for renegotiation of the “stinking development agreement“. He criticised the rights given to Paladin to use the minerals as collateral, the human resource arrangements and environmental precautions. He also found fault with the lack of penalty if Paladin finds and extracts other materials besides uranium at the mine site.
According to reporting by Nyasa Times,
Chibambo also faulted the mortgage rights which is under clause 28.5 of the development agreement in which government granted exclusive rights to Paladin to borrow against “all ore and mineral- bearing material, sand, slimes tailings and residues of whatsoever nature located on and under the tenement”
Under such an agreement, Chibambo says Paladin can mortgage all uranium and ore found on and under at Kayerekera or Mchina mine is Nthalire. [...]
“How could government of Malawi give Paladin such a blank cheque? Malawians may soon discover they have nothing at Kayerekera because Paladin’s creditor has taken over the entire mine. Paladin’s creditor like EDF of Canada could claim full right to our uranium in the event Paladin for some reason fails to supply uranium from 2019-2024. This is extremely reckless on the part of Malawi government,” said Chibambo.
He argued that the right to mortgage all uranium deposits at Kayerekera mine is a flagrant violation of Section.12 (1) a, of the Republican Constitution “as the contract terribly fails to protect and serve the interests of the people of Malawi. Government has no right to grant such a wild and reckless right”.
Paladin Africa, a subsidiary of Paladin Energy, is operating Malawi’s largest mine, Kayelekera Uranium Mine, in Karonga, northern Malawi.
At present, the Malawian government is in negotiations with another mining company Globe Metals & Mining for Kanyika Niobium Project in Mzimba. Malawian media has erroneously reported here and here that this as a “renegotiation” of the deal, but no agreement has yet been signed.