A Case of Unhappy Bedfellows: When Australian Firm Paladin Began Mining for Uranium in Largely Agriculture-Based Malawi, Hopes for an Economic Upturn Were Raised among the Local Communities. Now Relations Have Soured and the Government Finds Itself Caught in the Crossfire. Lameck Masina Reports
Masina, Lameck, African Business
The opening of Kayelekera Uranium Mine (KUM) in 2008, in Malawi's northern lakeshore district of Karonga, by an Australian Firm Paladin (Africa), raised a lot of expectations in an agro-based economy which has long been relying on tobacco as its main foreign exchange earner.
The 10-year, $200M mining project was also expected to expand the country's economy by boosting GDP by 5% and adding 20% to the value of Malawi's exports, overtaking sugar to become the second-biggest foreign exchange earner after tobacco.
In addition, the officials of Paladin, which was licensed to mine a deposit of some 11,000 tons during its period of operation, promised to transform the underdeveloped Kayelekera area into a prosperous town and create jobs for 800 locals surrounding the area.
"KUM will employ a permanent workforce of 350 personnel, of whom around 300 will be Malawians", reads a posting on Paladin (Africa)'s website. The company also said it had allocated $8.2m towards upgrading the water supply for the surrounding communities as part of its social responsibility.
Five years down the line, however, there has been a major falling out between the mine operators and the local community. Critics say little or no benefit has trickled down. The discontented business community around the project in Karonga had planned to stage protests in March demanding the closure of the uranium mine which they claimed has failed to live up to the promises.
The planned demonstrations, which were halted after the district council's authorities refused to give the demonstrators permission to go ahead for fear of "breaching the country's peaceful atmosphere", were, say some of the local community, a final resort after the failure by government authorities to respond to the concerns they raised in their petition dated 26th January 2013.
A spokesperson of the organising committee for the planned demonstrations, Wavisanga Silungwe, told African Business that for many years Malawians, especially local communities surrounding the project areas, "have been taken for granted", saying only 20% of the local business community benefit from Kayelekera Uranium Mine while 80% of business opportunities are given to foreign business outlets.
"You know it is a social obligation of any company that comes within the community to have the social responsibility to engage the community, but what is happening with Paladin is they are engaging foreign businesses to supply food items at the mine at the expense of the locals. In terms of transportation they get foreign trucks that carry sulphur and lime: why not use Malawian transporters?"
He said another problem is that people surrounding the mine drink water which may be contaminated by uranium. The Sere River which passes close to the uranium mine is an important source of water for the local community. "We are worried that we might be risking our lives by drinking water with uranium particles. We want to know how safe the water is," said Silungwe.
Too many loopholes
Legal experts have also added their voice to these concerns and are calling for the renegotiation of the Mining Development Agreement which the company signed with the Malawi government, arguing that the nature of the agreement left a lot to be desired as it has loopholes which are not only largely unclear but also disadvantageous to Malawians.
A private lawyer, Kamuzu Chibambo, told a news conference in the country's commercial capital Blantyre in March that there is a strong need for the government to renegotiate the agreement, which he said was of a type he had never come across in his 31 years as practising lawyer. …