Paladin gets Malawi mine go-ahead, but NGO opposition steps up a notch

Now that Paladin has received its license to commence operations for its Kayerekera uranium project from the Malawi Government, a group of NGOs plans to go to court to try and halt the development.

Author: Frank Jomo
Posted: Thursday , 05 Apr 2007

BLANTYRE, MALAWI -

After being swayed by the Environmental Impact Assessment (EIA) report presented to it by dual listed Paladin Resource Limited (ASX, TSX:PDN) for its Kayerekera Uranium Project in northern Malawi, the Malawi government has finally given the miner license to kick-start the project, which will become the country's second forex earner after tobacco.

However Paladin must brace itself for tough times ahead as a group of non-governmental organizations has gone to court to seek an injunction stopping the company from going ahead with its plans to start mining uranium, saying the EIA report was half-baked as it did not address the negative impact of uranium mining on the people.

"There are shortfalls highlighted in the EIA report to which government has not responded - for instance issues of protecting citizen's rights and health," John Chawinga of the Catholic Commission for Justice and Peace (CCJP), one of the organizations that have gone to court, told the local press. "The citizens have complained but government is negligent that's why we want to try the courts so that they help us resolve this."

But not only does Paladin have the support of the Malawi government in the project but also chiefs surrounding the mine. One of the senior chiefs there, Chief Karonga says he sees no reason why the NGOs should stop the implementation of the project. He said some organizations have taken advantage of Paladin's project in this district that borders Tanzania to become famous.

Concurring with the chief, Malawi's Minister of Energy and Mining Henry Chimunthu Banda said government followed all the procedures before the mining company was granted a license. He said the country's Environmental Management Act of 1996 stipulates that a developer will carry out an EIA and submit its report to government besides displaying it for public perusal.

"Thereafter, the people have to submit their comments to the Director of Environmental Affairs who compiles the same and discusses with the developer," Banda told the media yesterday. "All this was done and we solicited experts from the International Atomic Energy Agency (IAEA), to which Malawi is a Member, who recommended that teams of experts should conduct baseline surveys before Paladin goes full throttle into its operations."

He added that Malawi's National Council for Environment went through the submissions and approved the EIA report.

In its brief statement released April 3 on the Kayerekera project, Paladin said the EIA approval for the Kayerekera Project clears a major pre-requisite for the Minister for Energy and Mines and to now finalise his consideration on the grant of a Mining License for the project - the license was finally granted last week.

The granting of the license defies another call by the country's legislatures who last month, during the sitting of Parliament, asked government not to rush into giving the Australian based company license to mine uranium saying government should negotiate with the company to raise Malawi's stakes in the company currently pegged at 15 percent.

Paladin and the Malawi government had agreed that 15 percent of carried equity in the project will be transferred to the Malawi government in return for a reduced regime of the corporate tax from 30 percent to 27.5 percent and a reduced rent tax from 10 percent to zero.