Uranium to earn Malawi $1,6bn over decade - Finance Minister

Uranium to earn Malawi $1,6bn over decade - Finance Minister

By: Reuters Published: 9 Jan 08 - 22:27

Malawi Finance Minister Goodall Gondwe said on Wednesday the southern African nation is expected to earn more than a billion dollars over the next decade from uranium mining, which kicks off next year. Malawi last April granted a local subsidiary of Australia's Paladin Resources Ltd a licence to mine uranium in Kayelekera in the northern part of the country. Paladin holds an 85% stake in the Kayelekera mine through its wholly owned Malawi subsidiary Paladin (Africa) Limited. The rest is owned by the government, which expects revenue of $1,6-billion from its stake in the project. "The IMF and our treasury officials say, at current prices, uranium could generate output for a decade worth about $1,6-billion," Gondwe told Reuters. "This is the overall amount the Malawi government is estimated to make as revenue from its 15% stake in the uranium project." Malawi last April granted a local subsidiary of Australia's Paladin Resources Ltd a licence to mine uranium in Kayelekera in the northern part of the country. Paladin holds an 85% stake in the Kayelekera mine through its wholly owned Malawi registered subsidiary Paladin (Africa) Limited. The rest is owned by the Malawi government. The decision to grant Paladin the licence sparked protests from local human rights groups which feared that mining uranium would pollute lake Malawi, Africa's third largest freshwater lake. But last month the groups caved in after talks with Paladin and the government. The Kayelekera Uranium Project has an 11 year project life. Gondwe said that uranium is also expected to raise the country's gross domestic product (GDP) by 10 percent and increase exports over the ten years. Malawi's GDP is about $2-billion. "Apart from raising GDP the mining would also increase exports by 25% in the next 10 years," he said. Uranium is expected to take over from tobacco as the country's main export, analysts say. Paladin has projected annual uranium output of 3,3-million pounds. The Central Electricity Generating Board of Great Britian (CEGB) discovered high grade Keyelekera sandstone uranium deposits in the 1980s but failed to mine it because of previaling uranium prices at the time.