Malawi Government backs Lotus restart of Kayelekera uranium project

Uranium player Lotus Resources says it has strong support from the Government in Malawi to recommence production at its Kayelekera uranium project.

The most recent meetings between management and the Minister of Mining, the Honourable Dr Albert Mapondera Mbawala and the Minister of Finance and Economic Affairs, the Honourable Sosten Alfred Gwengwe – have been highly-productive with the Government indicating it was supportive for production to recommence as early as possible.

The project has transformational potential for Lotus and all stakeholders across Malawi – Kayelekera hosts a current resource of well over 46Mlbs U3O8 and historical production of ~11MIb of uranium between 2009 and 2014.

A positive restart study has already demonstrated Kayelekera can support a viable long-term operation and has may well become one of the first uranium projects to recommence production.

Recent formal discussions with the Malawian Electricity Utility (ESCOM), confirm the connection of the mine site to the national grid will lower the project’s operating costs and slash CO2 emissions.

Strengthening social licence

“I was extremely pleased with the warm reception we received from all parties that we met, and it is obvious there is strong support from government, communities and NGOs for Kayelekera to restart production as soon as possible,” Lotus Resources (ASX:LOT) MD Keith Bowes said.

“The trip also provided the opportunity to visit the site again and meet our local employees who have been doing a fantastic job in maintaining the site, while working with local communities and regional government officials to explain the process and requirements to be met before we can restart the mine.

“Communication is key and everyone is working hard to strengthen our social licence to operate.”

Bowes said the company also has strong support from local NGOs who’re working with communities to formulate a community development agreement.

Mine development agreement progresses

The company says discussions also advanced around the updated mine development agreement (MDA) which will set the fiscal regime and define the operating requirements for the company when Kayelekera restarts.

The previous owners of the Project, Paladin Energy, who operated the mine between 2009 to 2014, had an MDA with the Malawian government, which they negotiated in consideration for the transfer of 15% ownership of the project to the Government.

Lotus is seeking a similar set of conditions as were contained in this original agreement acknowledging that the government will retain its 15% stake in the project.

The company is currently awaiting definitive feedback from the Steering Committee to confirm that the negotiations will be completed on schedule, with the defined fiscal regime to be incorporated into the Definitive Feasibility Study – which is on track to be released by mid-2022.

This article was developed in collaboration with Lotus Resources Limited, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.