Kayelekera uranium mine is the biggest mining project in Malawi’s history and began production in 2009. In 2013, revenues from the mine contributed 2.6% to Gross Domestic Product. Yet production at Kayelekera was suspended as a result of the crash in uranium prices following the Fukushima nuclear accident. What uranium price would be required to restart production? What has total government take been to date? Which impact did the reduction in the general royalty rate have?
● Kayelekera needs a breakeven price of $58/lb to reopen (October 2016 uranium spot price is $20-26/lb)
● Paladin Africa has lost $387 million to date
● Government revenue is $12 million to date
● Reduction of the general royalty rate for this project has cost $15 million so far
● Further reducing the royalty would make only a marginal difference to the breakeven price for restarting production