Paladin Resources denies corruption on Kayelekera uranium project

Paladin Resources Kayelekera uranium project has generated some vociferous local opposition. The latest tactic to try to embarrass the uranium mine developer and the Malawi government are allegations of corruption which the miner and government both strongly deny.

Uranium miner Paladin Resources Inc. (TSX, ASX:PDN) has denied corruption allegations levelled against it by the press that it gave some top government officials kick-backs in order that they fast-track the issuing of mining license for its Kayelekera uranium project.

An anti-government on-line publication, Nyasa Times carried a story on Tuesday, that Paladin gave Minister of Mines and Natural Resources Henry Chimunthu Banda 18 fuel tankers. The paper alleged that the company has given Banda a contract to supply fuel at the mine without calling for any tenders. Fifteen percent of the proceeds from the fuel contract, the paper alleged will be pocketed by the country's President Bingu wa Mutharika.

In addition, the publication alleged that the miner gave another government official - deputy Minister of Water Development Frank Mwenefumbo a contract to supply lime. This contract also was not tendered and was, so the paper alleges, to grease the palms of the official to support the project.

But in an interview with Mineweb from Australia, Paladin Resources legal counsel Michael Blakistone who has been involved in all negotiations between Paladin and host governments on the company's uranium projects denied signing any contracts with government officials, in particular, on the Kayelekera uranium project.

Blakistone said the policy of his company does not allow the awarding of contracts to individuals or organizations before they are tendered. He said it was not true that his company gave the Minister of Mines 18 tankers meant for the supply of fuel at
Kayelekera.

"We are currently scrutinizing tenders from two multi-national oil companies to supply oil to the Kayelekera project," said Blakistone. "We will not need fuel tankers from anyone. Once we finish scrutinizing the tenders we will announce who will supply fuel to the mine."

He added that his company has not yet awarded a contract for the supply of lime because it does not need the commodity yet.

"It is disappointing that people are making these appalling allegations when Malawi needs development. Our dealings with the Malawi government have been totally transparent because we believe in good governance and transparency.

"However such allegations will not deter us from developing the Kayelekera Uranium mine because whatever we are doing is honest and straightforward and we have been dealing with people who are straightforward from the Malawi side, everything was in good faith," he said.

Recently there have been other allegations of underhand activities between the Malawi government and Paladin. During the recently ended Parliament session, the opposition alleged in the National Assembly that Paladin gave fifteen percent equity in its Kayelekera project to a high ranking official and not the government as alluded to in the Memorandum of Understanding (MOU) the two parties signed.

However this was rebutted by Mines Minister Chimunthu Banda. The Minister assured Members of Parliament that it was the Malawi government which holds a 15 percent stake in the company and not an individual as alleged by the opposition MPs in the House.

Paladin's Malawi project has generated strong opposition. Some civil society organizations in the country have dragged it and the government to court for supposedly flouting procedures in handling uranium mining. The civil society organizations accuse Paladin of only highlighting the economic benefits of mining uranium and neglecting the dangers that are associated with the same in its EIA report.

But despite the controversies dogging the project, Paladin insists it will commission the mine in the third quarter of 2008. And towards making good this promise, the company awarded the engineering, procurement and construction-management (EPCM) contract to Johannesburg based mining and minerals engineering firm - Engineering and Projects Company (E&PC), part of the Aveng Group - as the Project Engineers last month.