When will the Mining Development Agreement between Government and Paladin be made public?

The Mining Development Agreement between Paladin, the operator of Malawi’s largest mining project, and the Government of Malawi is bound by a non-disclosure agreement. However, in January, the Minister of Mining John Bande announced, according to Malawi Voice that this would not be the case for much longer.

Bande made these remarks following calls from civil society and political figures for the agreement to be renegotiated. For example, Kamuzu Chibambo, president of the party People’s Transformation Party (PETRA), gave the government a 14-day ultimatum for Joyce Banda’s government and Paladin to renegotiate the agreement made for rights to extract uranium from the mine Kayelekera in Karonga.

This week, Bande revealed that the confidentiality clause was added to the agreement by the previous government under the former late president Bingu wa Mutharika

Greg Walker the General Manager of International Affairs for Paladin Africa Limited indicated that the company is willing for the agreement to be disclosed to the public:

Paladin replied to the Ministry of Mining on 18 March 2013, indicating that it had no objection since the original request for the the Development Agreement to be kept confidential was made by the government.

Paladin believes that, once the general public has the opportunity to see for itself exactly what is in the Development Agreement, any confusion and controversy will be swept away.

Unfortunately, with the Development Agreement having been confidential, various individuals have been able to make false claims and assertions about its contents, such as the nonsense you keep repeating that we have failed to rebuild Karonga District Hospital or turn it into ‘a referral facility.’ The Community has been unable to judge for itself the truth or otherwise of those claims.  That will change when Government releases the document, which I hope it will do soon.

Bande has stated that removing the confidentiality clause will allow the government and Paladin to renegotiate the agreement in public.

In addition, making the deal public will clarify expectations placed on the company by the communities. Last month, Paramount Chief Kyungu highlighted that the community has been left in the dark,

It’s up to government to see to it that Paladin is doing exactly what they are supposed to do. As the situation stands at the moment, it’s not up to us. Blind as we are, because we were never involved in all this, we really cannot say what is happening with Kayelekera. As citizens of Karonga, it is really difficult to say if Paladin is fulfilling its part of the deal but there is nothing tangible.

We have seen Paladin coming out of its cocoon [supporting flood victims in Ngerenge with MWK 5 million, approximately USD 12,500] and I urge government to exert more pressure on Paladin so that it does more for the people of the district as well as the country as a whole

Further news on Paladin in Malawi:

  • Government Liason Committee as stipulated in Mining Development Agreement has not met for two years. The Government Liaison Committee (GLC) on Kayelekera Uranium Project has not met for two years. The GLC is stipulated in the Mining Development Agreement (Clause 41.1) and it should include principal secretaries or representatives from responsible line ministries, and representatives from the Office of the President and Cabinet, Karonga District Commissioner’s office and Karonga District, as well as two company representatives. The agreement also states that the company will provide the GLC with quarterly reports outlining activities, challenges, plans and number of Malawians employed to enable the GLC to monitor the company’s activities and adherence to the Approved Programme of Operations. The meetings were held on a quarterly basis during the construction phase of the mine (2007-2009) and decided to reduce to two per year. The last meeting was held in May 2011 although Paladin requested the GLC to meet in July and August 2012. The Ministry has not responded to these requests, according Walker. Bande said that he was not aware of a letter (perhaps because of the frequent turnover of ministers).
  • Government loses out as Paladin was forced to purchase geological information from a company based in the USA. In 1999, Paladin Energy Minerals NL (PEMNL, a subsidiary of Paladin Energy Ltd registered in the Netherlands) paid Power Resources Inc USD 10,000 for geological information on the Kayelekera deposit that the Department of Mines had misplaced. In addition, Walker explained that PEMNL agreed to pay Power Resources Inc between 0.75 percent and 1.25 percent, calculated on the gross proceeds received by PEMNL from the production and sale of uranium oxide from Kayelekera Mine. The president of the People’s Transformation Party (PETRA), Kamuzu Chibambo, has criticised the government over the disappearance of the documents.
  • Malawi Government wants to amend agreement with Paladin to be able to better monitor earnings from Kayelekera. The agreement presently allows the mining company to deposit proceeds in an offshore commercial bank account, an arrangement that was approved by the Reserve Bank of Malawi (RBM). However, according to minutes recently acquired by the Sunday Times from a meeting between Paladin, the Malawian government and the RBM in October 2010, the RBM Governor at the time, Perks Ligoya, noted that “RBM and the Government are unable to explain the way the proceeds are used. It was further observed that tea and tobacco companies which have sister companies abroad engage in transfer pricing and resultantly Malawi loses out on forex”.

5 responses to “When will the Mining Development Agreement between Government and Paladin be made public?

  1. Pingback: Negotiating for Malawi’s Niobium: Government and Globe Metals & Mining continue to discuss Mining Development Agreement | Mining in Malawi·

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