Lotus Resources Limited, managers of Kayelekera Uranium Mine in Karonga, has said it has raised Australian $25 million (about US$16.8 or K17 billion) in capital, adding first production can start in 2024.

The $16.8 million represents 33.6 percent of the $50 million initial capital cost estimates for its plant refurbishment, and was raised through share placement on the Australian Stock Exchange.

Kayelekera Uranium Mine

In its third quarterly report for 2022 ending September 30, Lotus has said Placement was strongly supported by both domestic and international investors.

A placement is the sale of securities to a small number of private investors and it is a less expensive way for a company to raise capital.

The report reads in part: “Proceeds from the Placement, together with existing cash, to be applied to: Progressing the development of the Kayelekera Project, including finalising the Mine Development Agreement [MDA], advancing offtake negotiation, Front End Engineering Design and project financing prior to a Final Investment Decision (FID).

“Funding the final instalment of rehabilitation bond repayment to Paladin Energy Limited in March 2023 and general maintenance and corporate costs for a period of at least 18 months [2024].”

However, the company said the timing for the restart of the mine is primarily dependent on the uranium price and the economic terms with which it can sign long-term off-take agreements with the utilities.

On community development agreement, the company has said it finalised the process with local communities and is awaiting Malawian Government ratification.

In response to a questionnaire, spokesperson in the Ministry of Mining, Andrew Mkonda Banda said they are currently finalizing negotiations on the MDAs with a number of companies, while others are conducting mining feasibility studies.

He said with continued support, the sector will become one of the leading contributors to the national economy, but also create more job opportunities and business opportunities.

“With regard to Lotus Resources Limited, we are renegotiating the MDA over Kayelekera Uranium Mining Project in readiness for its re-commissioning in order to bring it back to the production stream. We are currently finalising negotiations on the MDA,” said Banda.

Lotus Resources Limited has a mining licence signed on September 1 2021. The agreement shows that from September 1 2021, the company is supposed to commence substantial on-site mine development, within 18 months, and commence substantial mining production 60 months from the date the licence was agreed upon. Earlier, Natural Resources Committee of Parliament chairperson Welani Chilenga expressed worry with delays at Kayelekera, wondering why Malawi has to wait to 2026 to start production, yet it continues exploring and finding more deposits.

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