NO COURT INJUNCTION : Malawi NGOs cave in over Paladin uranium mining project

Popular demand for uranium mining in Malawi has bullied non-governmental organizations (NGOs) in the country into submission following threats that they would take Paladin Resources (ASX, TSX:PDN) to court to stop it from mining uranium in the country's northern region district of Karonga.

Just after the received its mining license from the Malawi government to start developing its Kayerekera Uranium Project, the NGOs announced they would be going to court to stop Paladin from developing the mine. The NGOs argued that people around the area were not happy with the project as it threatened their health and that they could not allow the project to go on until all the claimed grey areas in its Environmental Impact Assessment (EIA) report were addressed.

The development threatened to be a spanner in the works of Malawi's first ever mining venture. However over the weekend the Malawi government interacted with chiefs and people around the mine to hear their take on the project as well as to highlight to them its prospective benefits. From the discussions, it was apparent that there was a popular demand for the uranium mine in the district, which might change Malawi's economy from solely being agro-based as uranium would become the country's second largest forex earner.

"I was very surprised because on the ground people have different opinion on the project than that being championed by the NGOs who are against it and claimed to speak on behalf of the people," said Minister of Mines and Natural Resources Henry Chimunthu Banda after the meeting. "The people including chiefs are happy and spoke in support of the project which they said would transform lives and the district as well."

The NGOs argue that the EIA report submitted to government by Paladin was not conclusive as it does not spell out clearly how it would protect people from radioactivity. One of the NGOs against uranium mining - Catholic Commission for Justice and Peace (CCJP) in Malawi's northern city of Mzuzu - seems to have been bullied into submission and now turns to God for assistance but still insists Malawians are not being told the truth about the effects of uranium.

"We just hope God will guide us that this project does not take off," CCJP's John Chawinga told the local press. "Honourable Minister Banda is an interested party. There is no way he can go there and say people are not happy because government wants this project to take off at all costs and they are not telling the people the effects of uranium mining."

In April government awarded Paladin a 15 year license renewable for further 10 year period. The license covers an area of 55.5 sq. km. According to Paladin, commencement of construction of the Kayerekera Uranium Project marks a "highly auspicious moment in the development of Paladin towards becoming a major uranium supplier to the global markets".

"The Kayerekera Uranium Project is scheduled to commission in September 2008 and reach full production during the 2nd quarter of 2009. Annual production will be 3.3 Mlbs U3O8," reads part of the Paladin statement. "The CAPEX to build the project is US$185M for which the major portion of funding was raised through its US$250M convertible bond raising carried out in December 2006."

Had the NGOs managed to take Paladin to court, the case could have been the first of its kind in the country in recent times between the civil society and a private entity.