Paladin Africa Limited has declared that it will not renegotiate the Kayelekera uranium mining agreement with the Malawi government until the expiry of the 10 year period of the current contract.
People’s Transformation Movement (Petra) president Kamuzu Chibambo told journalists in Blantyre on Monday that his party would give the Malawi government 14 days to explain why the Kayelekera deal cannot be renegotiated.
However, Paladin Africa’s General Manager for International Affairs Greg Walker told the media in an interview that the company cannot renegotiate the contract as it invested its money in the project based on terms agreed in the currency contract.
“We will not renegotiate the agreement. And people think that terribly unreasonable. But it is not,” said Walker.
He warned that any attempts to forcibly change the terms of the agreement would damage Malawi’s reputation as an investment destination.
He described as a misconceptions some Malawian’s thinking that the country got a raw deal in the agreement but said such people could hold those believes because nobody has told them differently.
“The fact that Malawians think they got a raw deal doesn’t necessarily mean they did get a raw deal,” said Walker.
He said Kayelekera was a high risk investment considering the volatile prices of uranium on the international market and also because Malawi has no track record in terms of handling such a high scale foreign investment.
“One of the biggest risks for companies investing in Africa is that you come in and spend your money and once you have spent, government changes the rules,” said Walker.
“So one of the things we said was that give us some comfort. So one of the things included in the development agreement is that the government will take no action that will seriously change the financial aspects of this project for a period of 10 years,” disclosed Walker.
He said Paladin deserved such a guarantee and concessions as it was the pathfinder which came in first with an investment of such magnitude in the country.
Walker said the government had the right to reject the investment if did not like what Paladin Energy was prepared to do.
“They could have said we don’t like what you are doing and you can take the money and go home. We are not prepared to give you that. Did they do that? No. They said okey, we understand that you guys need stability for the first 10 years of the project. So we signed an agreement with the government under which the government of Malawi gave its undertakings,” said Walker.
He invited those who question the agreement on the mine to look at the amount of money Paladin has invested in the project and think about who else could have put up US$500 million in Malawi..
“No one else has brought such an amount of money into Malawi in anything else other than aid. And you know what aid money does,” said Walker.
He said even if the agreement was to be renegotiated, Malawians should not think that only things demanded by Malawi would be changed in the contract.
“The government has said there are some things in the development agreement it doesn’t like. But there are also some things in the development agreement which we as Paladin don’t like because we didn’t anticipate some of the things that have turned up after mining started,” said Walker.
He said, however, the company was prepared to stick to its side of the present agreement and expects the Malawi government to do the same too.