Kayelekera mine in northern Malawi has not produced uranium since 2014 when the mine was put on care and maintenance. The move followed consistently low uranium prices and high operating costs. Paladin continues to maintain the mine and to make efforts to reduce costs – such as the recent sale of vehicles.
The uranium spot price is hovering just about USD 20 per pound. We showed that the price will have to at least double for the mine to break even. See the financial model of the mine developed using openly sourced data.
Paladin Energy has released its 2018 Annual Report along with an investor presentation. Here are some key notes relating to Kayelekera:
- Spot uranium prices are at a 13-year low but there is growing demand from China and India.
- Utility companies are ‘underbuying’ and using up their stockpiles while uranium supply is decreasing. This may mean that in the medium-term it will be difficult for industry to meet the demand and Paladin hopes to be in a position to meet this demand.
- Kayelekera has approx. a 5-year mine life remaining based on reserve estimates from June 2018, but the company continues to explore (it holds 5 exploration licences in Malawi).
- It costs the company about USD 5 million per year to keep Kayelekera on care and maintenance. Over USD 3 million of the costs are for power and water treatment.
- There have been no (lost time) injuries at the mine in the last 4 years.
- The mean radiation dose for workers in 2017 was 1.2 mSv which was higher to the dose of 0.88 mSv in 2016; the increase was because of limited capacity to suppress dust – the company said it has rectified the situation. This is within the dose limits from the International Commission on Radiological Protection.
- The company has passive radon gas monitors at the mine site and at Kayelekera Village. Human Rights Watch and Malawi’s Natural Resources Justice Network have called for all environmental reports to be made public and easily accessible.
- The company holds monthly meetings with Kayelekera village leadership and more informally with the Karonga District Commission and staff, traditional authorities and their advisors.
- There are currently 128 national employees and 1 expatriate employee.
- Paladin Energy is also in the process of putting its large Namibian uranium mine – Langer Heinrich on care and maintenance.
See below for a history of Kayelekera: