Sunday, 23 August 2009

MALAWI: Activists Look Askance at New Mine - IPS ipsnews.net

MALAWI: Activists Look Askance at New Mine - IPS ipsnews.net

By Jessie Boylan
KAYELEKERA, Malawi, Aug 22 (IPS) - "We are serious about the integrity of the environment," says Neville Huxham, the country director for Paladin Energy Africa. "We're taking the uranium out of the ground, we're exporting it to be used for productive purposes, so we should be getting a medal for cleaning up the environment."

In the rolling hills 575 kilometres north of Malawi's capital city Lilongwe, lies Paladin's Kayelekera uranium mine, the first major mining development in Malawi, and the standard on which future mines will be based.

The narrow, winding road to Kayelekera is mostly unsealed, crossing the North Rukuru and Sere Rivers as it makes its narrow, winding way past numerous scattered villages hugging its edges.

"The road is much better now," Reinford Mwagonde, director of Citizens For Justice (CFJ), tells us on the way out to the village. "At least four trucks carrying sulphuric acid drive this road every day - what would happen if one of them had an accident?"

Mwagonde has been campaigning against Paladin’s activities since 2005, when he became aware of the company's plans to develop the mine. CFJ and four other civil society organisations (CSOs) took Paladin to court in 2006, challenging the company's mining licence on a number of grounds including inadequacies in the Environmental Impact Assessment (EIA) process.

The case was later settled out of court but Mwagonde has never missed a beat since.

"The EIA didn't address serious environmental concerns around the issue of water contamination of the rivers that flow into Lake Malawi," says Mwagonde. The lake is a major source of potable water and fish for millions of people in Malawi, Tanzania and Mozambique.

"They say that we’re anti-development," says Mwagonde, "because we're against the mine. But we're against the mine because of the long-term health and environmental implications that are unique to uranium mining that the community has not been properly informed about."

Creative legislation


Sweetheart dealing

President Bingu wa Mutharika has said the Kayelekera uranium mine will contribute as much as ten percent of Malawi's gross domestic product and 20 percent of total export earnings. Paladin chairman John Borshoff says the country can expect 45 million dollars in taxes and royalties from the mine each year.

But over the expected 11-year lifespan of the project, Malawi will lose more than $120 million in various taxes due to the terms agreed with Paladin. The government traded a 15 percent stake in the project in exchange for favourable tax rates for the company. Paladin will pay 27.5 instead of 30 percent corporate tax, and be completely exempt from a ten percent rent tax. Royalties - ordinarily five percent - have been dropped to 1.5 percent for the first three years, and three percent thereafter; the company will also be exempt from paying value added tax for up to ten years.

The terms of the tax regime are also frozen for the next decade.

CFJ has also raised concerns that the mine would not be operating in Australia under its current configuration, and that it is taking advantage of Malawi's minimal understanding or regulation of uranium mining.

John Borshoff, Paladin’s director, was quoted in the Apr. 3, 2006 edition of Melbourne’s Herald Sun newspaper saying "Australia and Canada have become overly sophisticated... There has been an over compensation in terms of thinking about environmental and social issues in regard to uranium operations in Australia, forcing companies like Paladin into Africa."

The Malawian government has drafted legislation dealing with radioactive materials but it is yet to be passed. Concerns have been raised by CSOs that Paladin's input into the draft legislation has been too great, and that the company should not have been granted a license to mine before legislation was in place.

"Paladin," according to Undule Mwakasungula, director of the Centre for Human Rights and Rehabilitation, "cannot be held accountable if something happens."

For example, the closure plan outlined by Paladin in the EIA lacks an appropriate strategic, long-term tailings management plan. Rather than moving the tailings back into the mine-pit at closure, as would be required in Australia, Paladin plans to leave them in the tailings dam exposed to erosion and extreme weather conditions.

On the ground

Paladin Energy Ltd. is a junior Australian mining company with only one other operating mine – the Langer Heinrich uranium mine in Namibia. Although Paladin started mining and stockpiling ore at Kayelekera in June 2008, the mine wasn’t officially opened until April of this year by Malawian president Bingu wa Mutharika... and won't be in full production until the end of 2009.

With a long list of shareholders anxious to being exporting 3.3 million pounds of uranium-oxide per annum from Kayelekera, it isn't surprising that Paladin was in a hurry to start digging.



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