An Australian minerals exploration and development company – Lotus Resources Limited says it is still waiting for uranium prices to recover on the international market for the company to resume exploration at Kayelekera Uranium Mine in Karonga which stopped its operations in 2014.
The company’s Managing Director Keith Bowes disclosed this in Lilongwe during an interface with the Parliamentary Committee on Natural Resources and Climate Change.
Bowes said: “We haven’t started operations there yet, because we are waiting for two main things. We were waiting for the uranium price to recover to a level that made economic sense for us to turn the mine back on again.
“The second point was the NDA. The uranium price has now reached a level of $85 per pound on the spot market, that $85 per pound we believe in the right range for us to be able to start the mine back up again.”
The Company released a Definitive Feasibility Study in August 2022, which confirmed Kayelekera ranks as one of the lowest capital cost uranium projects globally (Initial Capital Cost – US$88m), whilst being able to quickly recommence production once a Final Investment Decision is made.
Bowes, who also bemoaned the slow progress of discussions with government on the mining agreement, said the Company needs to mobilise $125 million to resume Uranium mining at Kayelekera.
The Director added that the Company needs to negotiate with both banks and investors on the needed funds.
“We have been negotiating the mine development agreement for some time with the government now. Progress has been slower than what we would have hoped. So we are looking for a minimum of USD$125 million to be able to restart the this mine up, depending on how we look at things like our working capital costs and that kind of thing, it may go a little bit more than that maybe as high as $150 million.
“But that’s the sort of range that we are looking at. That’s what we need to negotiate with the banks that we need to be able to negotiate with the various investors,” he said.
Commenting on the development, the committee`s vice chairperson George Million has called upon concerned parties to expedite the agreement lamenting that the country is losing out on royalties and employment.
“This delay really is very bad for our country because this delay is robbing a lot of miners in royalties’ government is losing out, government is losing money in terms of forex, because once that mine is up and running government is going to benefit through forex. At the same time, a lot of Malawians who are jobless are going to find jobs there at Kayelekera, so we are losing out as a country,” said Million.
The Kayelekera Uranium Project is the fourth largest uranium asset globally by historical annual production currently on care and maintenance.
According to Lotus Resources Limited, the Project produced ~11MIbs U3O8 equivalent over five-years between 2009-2014, before the asset was shutdown to preserve its longevity due to a sustained low uranium price.
