Australian Conservation Foundation exposes the diseconomics of Australia’s uranium mindustry

April 28, 2013

Yellowcake Fever.  Exposing the Uranium Industry’s Economic Myths  Report in full at: http://www.acfonline.org.au/sites/default/files/resources/ACF_uranium_economics_Yellowcake_Fever.pdf  by Dr Jim Green (FoEA) & Dave Sweeney (ACF), Australian Conservation Foundation, April 2013 (33 page PDF)  Executive Summary: The Australian uranium industry involves serious and unresolved domestic and international security, environmental and inter-generational concerns and remains a contested and controversial sector that lacks a secure social license. This report examines the sectors small economic and employment contribution in relation to its significant risks and legacies and seeks to build the case for an independent cost-benefit analysis and a comprehensive and transparent assessment of the impacts and implications of Australia’s uranium trade.

Uranium is a small contributor to Australian export  revenue and employment. From 2002 to 2011, uranium  sales averaged $627 million annually and accounted  for only 0.29% of all national export revenue. In the 2011/12 financial year, uranium revenue of  $607 million was 4.4 times lower than Australia’s 20th  biggest export earner, 8.7 times lower than Australia’s 10th biggest export earner and 103 times lower than the biggest earner, iron ore. Small industrial sectors can play an important economic role but the unique  properties and risks of uranium mining relative to any  benefits means its role requires particular scrutiny.

The industry’s contribution to employment is also  underwhelming. The World Nuclear Association  estimates 1,760 jobs in Australia’s uranium  industry. That is the highest of all estimates yet it  represents just 0.015% of all jobs in Australia. The  industry’s primary promotional body, the Australian  Uranium Association (AUA), claims its members  are “significant employers of First Australians”
however the sector only provides around one job  for every three thousand Indigenous Australians.

In the mid-2000s, there was a speculative uranium  price bubble. Since this bubble burst the uranium  industry has been battered by a falling commodity price,  rising production costs, the Global Financial Crisis  (and associated credit crisis), the failure of the global  nuclear power ‘renaissance’ to materialise, the failure to  develop new mines and serious production shortfalls…….

There is little for Australia’s uranium companies to cheer  about in other export markets for Australian uranium:
• Plans to expand nuclear power (or at least to  maintain current capacity with new build) are  in trouble in the UK, the USA and Canada.
• Germany and Belgium plan to abandon nuclear power.
• The restart of reactors in Japan promises to  be a protracted, contentious affair and preFukushima plans to expand nuclear to 50% of
total electricity supply are now firmly in the past.
• South Korea’s nuclear industry has been hit by a series  of scandals including bribery, corruption and cover-ups, and the proportion of South Koreans who consider  nuclear power safe fell from 71% in 2010 to 35% in 2012.

• France plans to reduce its reliance on nuclear power.
• Taiwan, Finland, and Spain have fewer than 10  reactors each and will remain, at most, small markets.
• Sweden has 10 reactors, with no scope for  growth under existing government policy.

A decade into the nuclear ‘renaissance’ and global nuclear capacity has not increased. There may be  modest growth, but utilities will have to build several  hundred reactors in the coming decades just to replace  the current cohort of mostly middle-aged reactors. The  huge capital cost of reactors is proving to be the industry’s  Achilles heel. An Exelon executive recently warned that  new reactors “won’t become economically viable for the  foreseeable future” in the US, while General Electric’s  CEO said “it’s just hard to justify nuclear, really hard”.

Most growth is anticipated in economically and/or  politically illiberal countries. The Wall Street Journal noted in February 2013 that “new nuclear works  best in countries where consumers and financiers  are shielded from its full costs – hardly the best  basis for the industry’s ever-elusive renaissance”.
Industry enthusiasm is no substitute for analysis  and evidence and a transparent review of the  sustained dissonance between the performance and promise of the uranium sector is long overdue.

Call for inquiry into Australia’s poorly performing and risky uranium industry

April 28, 2013

Dave Sweeney, 26 April 13 Australia’s uranium industry is a minor contributor to employment and the economy, a major source of domestic and international risks and is overdue for an independent inquiry into its effects on the environment, health, safety and security, according to a report released today on the anniversary of the 1986 Chernobyl nuclear disaster.

 The report, Yellowcake Fever: exposing the uranium industry’s economic myths, released by the Australian Conservation Foundation, shows uranium accounted for only 0.29 per cent of national export revenue and less than 0.015 per cent of Australian jobs in the decade to 2011.

In the last financial year, revenue from uranium was four times lower than Australia’s 20th biggest export earner, eight times lower than Australia’s 10th biggest export earner and 103 times lower than the biggest earner, iron ore. “While Australia’s uranium sector remains an economic minnow, it is a leviathan when it comes to the damage it does to communities and the environment and the risks it spreads,” said the Australian Conservation Foundation’s Dave Sweeney.

“It is time for an independent and credible cost-benefit analysis of this sector and for decisions to be based on evidence, not self-interested industry enthusiasm.”

The most recent independent assessment of the Australian uranium industry – a Senate Inquiry in October 2003 – found the sector characterised by underperformance and non-compliance, an absence of reliable data to measure contamination or its impact on the environment and an operational culture focussed on short term considerations.

“In the decade since that Senate Inquiry, leaks, incidents and accidents have continued to dog uranium mines, Australia has sold uranium to more nuclear weapon states and Australian uranium has fuelled the continuing Fukushima tragedy,” said Dave Sweeney.

“The Australian Uranium Association’s push to reduce independent scrutiny of uranium projects shows why this sector does not enjoy community confidence or a social license.

“We call on the federal government to establish an evidence-based inquiry into the operations and impacts of this industry, particularly in the shadow of Fukushima.” Contact: Dave Sweeney, 0408 317 812

 

Medical group warns against weakening of uranium radiation safety standards

April 28, 2013

 It is essential that appropriate environmental and human safeguards remain, and that uranium mining and milling remains within the definition of “nuclear actions” for the purposes of the EPBC Act. There is a clear need for federal oversight to ensure clear and consistent implementation of these measures

Medical Assocation for the Prevention of War (MAPW)  SUBMISSION ON FEDERAL REGULATION OF URANIUM MINING, by Dr Margaret Beavis April 2013   The uranium mining industry is attempting to remove federal overview of uranium mining. MAPW Vice-President Dr Margaret Beavis has prepared this submission to the Productivity Commission arguing that federal oversight should remain, and noting that as risks to health and the environment become more apparent, radiation regulation is increasing internationally.:

It is concerning that the uranium industry has used the expression “mild radiation” to describe its radiological environmental impacts, when there is no regulatory basis or definition to use this term, potentially giving the impression that the levels of radiation in the uranium mining industry are without risk to the environment. The evidence is clear and unassailable that this is not correct. Furthermore, it is appropriate that uranium mining continue to be considered a ‘nuclear action’ as specified by the EPBC Act as the radioactivity derives specifically from nuclear decay processes. Tailings from uranium mining are radioactive for millennia, resulting in unique environmental considerations for every uranium mine.

The International Commission on Radiological Protection has determined that the dose  coefficient for radon gas, one of the sources of radioactivity from uranium mining, needs to  be doubled, indicating that it is actually thought to be double the previously estimated carcinogenic hazard.1. ARPANSA is currently in the process of revising dose estimates to  workers. It follows that risks to others is doubled and makes it even more essential appropriate mitigation strategies are introduced. It also follows that the environmental risk is also increased.

With regard to human exposure, all radiation regulatory frameworks around the world  support the concept of the ‘linear no threshold’ (LNT) model of carcinogenesis. As the US  appropriate mitigation strategies are introduced. It also follows that the environmental risk is also increased.

With regard to human exposure, all radiation regulatory frameworks around the world  support the concept of the ‘linear no threshold’ (LNT) model of carcinogenesis. As the US coefficient for radon gas, one of the sources of radioactivity from uranium mining, needs to be doubled, indicating that it is actually thought to be double the previously estimated carcinogenic hazard.1

. National Academy of Sciences, Biological Effects of Ionising Radiation VII (BEIR-VII) report (2006) summarised:“..the current scientific evidence is consistent with the hypothesis that, at the low doses of interest in this report, there is a linear dose-response relationship between exposure to ionizing radiation and the development of solid cancers in humans. It is unlikely that there is a threshold below which cancers are not induced…”

This concept is also supported by all radiation regulators, the International Atomic Energy Agency, the United Nations Scientific Committee for the valuation of the Effects of Atomic  Radiation (UNSCEAR) and many others. It follows that there is strong evidence that even at  low doses any additional radiation over background levels increases the risk of malignancies. It logically follows that there are thus risks to non-human biota and the  broader environment, even at low doses of radiation, or as the Australian Uranium Association would perhaps describe it, ‘mild radiation.’……

Given the clear human health and environmental risks of even low dose radiation exposure, it is entirely appropriate that uranium mining and milling remain within the definition of nuclear actions” in the EPBC Act .Internationally radiation regulation is increasing, as the risks to human health and the environment become more apparent. The international emphasis (by the IAEA) is increasingly to consider radiation an environmental (as opposed to just a human) hazard so  it is appropriate that uranium mining be subject to Commonwealth environmental legislation. There is no reason why uranium mining should be exempt from the remit of the EPBC Act.

In conclusion, the uranium mining industry produces radioactive materials that have impacts on both human health and environmental health. It is essential that appropriate environmental and human safeguards remain, and that uranium mining and milling remains within the definition of “nuclear actions” for the purposes of the EPBC Act. There is a clear need for federal oversight to ensure clear and consistent implementation of these measures …http://www.mapw.org.au/files/downloads/2013-04-Productivity-Commission-uranium-submission.pdf

Doctors speak out for the protection of animals from radiation from uranium minng

April 28, 2013
Medical Assocation for the Prevention of War (MAPW)  SUBMISSION ON FEDERAL REGULATION OF URANIUM MINING, by Dr Margaret Beavis April 2013 “…..With regard to non-human species, the 2010 ARPANSA Technical Report No. 154 entitled
“Environmental protection: Development of an Australian approach for assessing effects of  ionising radiation on non-human species” made the following statements:
“It is now generally accepted that under certain circumstances, there is a need to demonstrate, rather than assume, that non-human species living in natural habitats are  protected against ionising radiation risks from radionuclides released to the environment by
human actions.
In an Australian context, there is a recognised need for specific national guidance on protection of non-human species, for which the uranium mining industry provides the major  backdrop; it is Australian Government policy that uranium mining should be based on world
best practice standards for assessing environmental impacts.
It is timely that Australia now consider the development of guidance in order to provide clear  and nationally consistent advice to operators and regulators on protection of non-human  species, including advice on specific assessment methods and models and how these might
be applied in an Australian context.
This report reviews the ICRP and ERICA internaational frameworks for assessment and  protection of non-human species and the applicability to the Australian context.
The general conclusions to be drawn from this report include:
• At the international level, the International Commission on Radiological Protection  has established a framework for radiological assessment and protection of nonhuman species based on a reference animal and plant approach;
• In an Australian context, there is a need for specific national guidance on protection  of non-human species, identified through the National Directory for Radiation  Protection, and realised by the need of the uranium mining industry to integrate world  best practice standards for assessing environmental impacts;Without federal oversight and reporting this is highly unlikely to happen in any consistent,
coherent or comparable manner. So inclusion in the EPBC Act is essential……http://www.mapw.org.au/files/downloads/2013-04-Productivity-Commission-uranium-submission.pdf

Financial losses for Ranger uranium mine – rehabilitation is the only option

April 28, 2013

9 April 13,   Kakadu uranium miner Energy Resources of Australia’s (ERA) is expected to announce a financial loss at its Annual General Meeting in Darwin tomorrow.

The AGM comes only months after open cut mining ended at the troubled Ranger site and only a month after the end of plans for uranium mining at the nearby Koongarra region.

“Now is the time to draw a line for uranium mining in Kakadu and to end plans for a new underground mine at Ranger – called the Ranger 3 Deeps project,” said Environment Centre NT spokeswoman Cat Beaton.

“The Ranger and Jabiluka leases need to go the way of Koongarra and the chapter closed on uranium mining in the Kakadu National Park region”.

The federal government has determined that ERA’s proposed 3 Deeps underground uranium mine plan requires a full Environmental Impact Statement and there is much scepticism about whether any underground mine could meet the mine lease closure date of 2021.

“Both the profitability and social license for uranium mining in Kakadu have faded and we are urging ERA to now clean up, rehabilitate and exit the Ranger lease.

There is no economic or environmental rationale for taking the Ranger operation underground and any move to do so will be actively contested,” concluded Ms Beaton.

Cut radiation safeguards – says Australian Uranium Association

April 28, 2013

The group wants the commission to explicitly recommend the EPBC Act be amended to remove uranium mining and milling from the definition of “nuclear actions”……

 uranium prices have fallen since Japan’s Fukushima disaster led many nations to rethink nuclear power programs.

Miners seek radioactive rethink, BY:ANNABEL HEPWORTH  The Australian , April 08, 2013 URANIUM miners have demanded changes to laws so that the “mild” radioactivity that is unique to the sector is no longer a trigger for federal environmental assessments.

The Australian Uranium Association — whose members include BHP Billiton and the operator of the Ranger mine at Jabiluka in the Northern Territory, ERA — says that uranium mining and the milling that makes yellowcake should no longer be defined as a “nuclear action” under the federal law known as the Environment Protection and Biodiversity Conservation Act.

“Under the . . . act, the underlying assumption is that uranium mining and milling of themselves  have a significant impact on the environment.

“This assumption has never been justified. It seems that the fact of mild radioactivity is justification in itself, not requiring explanation,” the association’s chief executive Michael Angwin said.

“The discriminatory treatment of the uranium industry under the EPBC Act is not necessary to manage the mild radioactivity which is the unique feature of the uranium industry.”

The comments are contained in a new submission to the Productivity Commission’s inquiry into the approvals process for major projects. The submission also asserts that state laws already deal with radiation, based on advice by the federal government’s Australian Radiation Protection and Nuclear Safety Agency…… But groups including the Australian Network of Environmental Defenders’ Offices are opposed to a streamlining of environmental processes, fearing this will lead to high-risk and unsustainable developments…….

In the submission, the association points to a 2007 Productivity Commission recommendation to review the treatment of uranium mining as an automatic trigger for environmental assessments under the EPBC Act.

The group wants the commission to explicitly recommend the EPBC Act be amended to remove uranium mining and milling from the definition of “nuclear actions”……

uranium prices have fallen since Japan’s Fukushima disaster led many nations to rethink nuclear power programs. http://www.theaustralian.com.au/business/companies/miners-seek-radioactive-rethink/story-fn91v9q3-1226614448413

Economic hurdles ahead for Toro Energy’s Wiluna uranium project

April 28, 2013

Raising the $A269 million to build Wiluna is the obvious challenge at a time of an ultra-cautious stock market and with banking conditions as tight as anyone has seen in decades.

the question of the real cost of uranium at Wiluna because if you add 10% for other charges the $37/lb becomes $40.70/lb and an extra 20% lifts the full cost to $44.40/lb.

Equity investors and the providers of debt finance to the Wiluna project will want to see something far more concrete than investment bank estimates before they provide the capital to develop Wiluna. 

Dryblower on the obstacles awaiting Wilunahttp://www.miningnews.net/StoryView.asp?StoryID=798350828, 8 April 2013 DIRECTORS and staff at Toro Energy had every reason to pop the corks on a few bottles of champagne last Tuesday when the Australian government provided environmental approval for its Wiluna uranium project in Western Australia, though Dryblower hopes it was just Jacob’s Creek and not Moet.

Keeping the good stuff on ice for a little longer is probably a good idea because even though one hurdle has been cleared Wiluna and Toro have a few more to clear before the serious celebrating can start.

Raising the $A269 million to build Wiluna is the obvious challenge at a time of an ultra-cautious stock market and with banking conditions as tight as anyone has seen in decades.

It means the first two questions from potential equity investors in Wiluna and bankers to the project will be: what price will Toro get for its Wiluna uranium and what’s the full cost of producing a pound of Wiluna uranium?

So far, the best production and cost information from Toro (as published on its website) is that Wiluna will yield 1.7 million pounds of uranium over 14 years at a C1 cash cost of $US37 a pound and that the average price for uranium in the 2014-15 period is expected to be $76/lb.

Said quickly and it might appear that Toro is looking at a profit margin of $39/lb which, when applied to the annual production estimate could imply a gross yearly profit of $66.3 million.

It will not, obviously, be anywhere near that if only because of the problem of C1 cash costs which have been troubling investors in the gold industry for years.

C1, as smarter investors know, does not include a raft of additional costs and charges, which can include royalties, marketing, exploration, financing, depreciation and the cost of simply running the head office.

In the gold industry the issue of C1 costs came to a head at the Mines and Money conference in London late last year when Evy Hambro and Catherine Raw, two of the senior executives at Black Rock, one of the world’s biggest fund management firms, savaged gold companies for not revealing their true (full) cost of producing an ounce of gold.

The problem, as Hambro and Raw pointed out, was not that investors were being kept in the dark but that governments were being misled into believing that the gold industry was more profitable than it really was and therefore it was okay to increase royalties.

C1, whatever the justification, really ought to be for internal use only because it means nothing to outsiders and might even be creating the wrong impression.

Which leaves open the question of the real cost of uranium at Wiluna because if you add 10% for other charges the $37/lb becomes $40.70/lb and an extra 20% lifts the full cost to $44.40/lb.

Even if lumping an extra 20% on Wiluna is unreasonable it is the sort of calculation that investors and bankers will make if they only have a C1 cost to work with.

And if they do boost the full Wiluna cost of production something rather unpleasant happens – the notional cost of production rises above the currently quoted short-term uranium price of $42.25/lb.

To save readers reaching for their calculators Wiluna’s full costs only have to be 14.1% higher than the quoted C1 cost to reach the spot-market uranium price.

It introduces the second part of the cost versus price issue: what price will Wiluna uranium fetch.

And that’s when you enter the long-term market where Toro has obtained a series of forecasts from investment banks for the 2014-15 year, ranging from a high of $85/lb to a low of $66/lb, with the average being the $76/lb mentioned earlier.

Equity investors and the providers of debt finance to the Wiluna project will want to see something far more concrete than investment bank estimates before they provide the capital to develop Wiluna.

They will require firm sales agreements at least and perhaps the participation of a cornerstone investor which can also provide an offtake agreement.

On the stock market, after an initial burst of enthusiasm, Toro retreated from its recent peak of A14c, to close on Friday at 11.5c, which is where it started the week.

The market reaction makes Dryblower’s point.

It is money, more than uranium, which will determine the next phase of the Wiluna project because even though Toro has done well to secure government approval the financing hurdle will be just as high as the government hurdle.

Sorry history of Wittenoom asbestos town – a model for uranium towns?

April 28, 2013

WA GOVERNMENT TO MOVE LAST RESIDENTS FROM ASBESTOS TOWN ABC Radio National 3 April 2013  By:Catherine Van Extel The West Australian Government is looking to move a group of residents who continue to live in the deadly asbestos mining town of Wittenoom, in the Pilbara region of Western Australia. But while there are moves to finally clean up the toxic site, many continue to face the legacy of their time spent growing up in or visiting the notorious town.

The 1990 Midnight Oil song ‘Blue Sky Mine’ was inspired by Wittenoom and its deadly mining industry. It’s estimated that more than 20,000 people lived at Wittenoom before the mine closed in 1966.

Asbestos-related diseases have killed more than 2000 former workers and family members of Wittenoom, a death toll that continues to rise.

In 2007, the state government withdrew Wittenoom’s town status—disconnecting services like water and electricity—but a small group of residents stayed. Now the government wants them out in order to remediate the contaminated site. It’s reconvened the Wittenoom Closure Steering Committee to achieve that…..

‘[I]t will be ultimately a decision of government of how they want to pursue the relocation of residents, through either an intervention, compensation, or a change to legislation,’ Mr Rosair says.

The death on Sunday of former WA Labor MP, Ernie Bridge, is another tragic reminder of the Wittenoom legacy. Mr Bridge believed he was exposed to asbestos fibres and dust while visiting the town on government and electoral business. He was suing CSR Limited, the Shire of Ashburton, and two of Australia’s richest women, Gina Rinehart and Angela Wright, after recently being diagnosed with mesothelioma.

For Perth-based Slater and Gordon lawyer, Simon Millman, Ernie Bridge’s compensation claim was one of between 100 and 120 asbestos-related cases he sees each year. A growing number of cases involve people who’ve had a lower exposure to asbestos; that includes former Wittenoom residents.

‘People in the industry usually talk about three waves of asbestos exposure,’ Mr Millman says. ‘They talk about the original workers—the mine workers, the mill workers, the manufacturers working in the James Hardie factories. And then the second wave, with the construction workers, electricians, the plumbers, the painters, the plasterers who would in the course of their work come into contact with asbestos on a regular basis—we saw many claims and we continue to see many claims for people in that category. And then the third category are the wives of those workers, whose only exposure was through washing their husbands’ clothes at the end of the day. And the children, as I say, and also the home handymen.’…..http://www.abc.net.au/radionational/programs/breakfast/asbestos-town/4607938

That third wave, involving exposure in the late-1970s and ‘80s, is on the rise. Alison Reid is an associate research professor at University of

Western Australia and the West Australian Institute of Medical Research. She says that for many children who grew up in Wittenoom and were exposed to the blue asbestos tailings, the effects continue to be felt.

‘We published work last year looking for the first time at the Wittenoom children,’ Ms Reid says. ‘So they’re now roughly 50 years old; we found high rates of mesothelioma—17 per cent of the cohort had died from mesothelioma, which is extremely high. We also found high rates of other diseases compared to the West Australian population, particularly brain cancer, leukaemia in the men, prostate cancer in the men. They had higher rates just of dying from all causes and all cancers.’

Former Wittenoom mine worker, Robert Vojakovic, is president of the Asbestos Diseases Society of Australia, which is campaigning for more research into asbestos-related diseases. He believes there should also be a Wittenoom fund.

‘They’ve got people who had sufficient exposure, possibly 10,000 people which are at risk to develop disease from Wittenoom alone,’ he says. ‘And they’re in a pretty high category to get cancer or mesothelioma. I’m talking about many persons who just briefly and remotely in time spent, you know, maybe one or two days at Wittenoom visiting beautiful gorges.’

‘So I reckon the focus ought to be on Wittenoom, you know? To start some medical research…to actually do something for the people who develop mesothelioma arising out of their visit to Wittenoom.’

Listen to Catherine Van Extel’s report at RN Breakfast.

Leave uranium in the ground, says Indian visitor to Roxby Downs

April 28, 2013

“Please leave the uranium underground” , Roxby Downs Sun  April 4, 2013,  Indian national Bhargavi Dilipkumar has a message for BHP Billiton; to leave uranium underground for it has done more than enough damage to the environment.

Bhargavi visited Roxby Downs this week with Friends of the Earth Australia to receive a first hand experience of what uranium mining was all about and be the voice of India protesting the uranium trade between the two countries.

She said she had been part of the people’s movement that is strongly opposing the building of an atomic power plant to be built at the southern part of India.

Bhargavi is an anti nuclear activitist from India who strongly believes that BHP Billiton should shelve its uranium export program and be responsible for the safety of the environment and million of lives back home.

She visited the Olympic Dam mine and tried to persuade BHP Billiton management to have a heart for the people of India who will suffer long term consequences if the atomic power plant was allowed to go ahead.

“Please leave the uranium underground,” she said.

“Don’t mine it because its destroying lives.”

Similar sentiments were expressed by German nationals Danda Petter and Miriam Ribbeck who had been part of a nation-wide protest to stop the construction of a nuclear plant at Freiburg.

They said the consequences of having a nuclear plant would definitely affect both Germany and France.

Vietnamese national Hai Levan said having seen the damage caused in Japan he would “fight to the death” to stop the building of a nuclear energy plant in South Central Vietnam.

“We can’t continue chopping down trees because it will cause flooding and harm our environment,” he said .http://www.roxbydownssun.com.au/story/1408776/please-leave-the-uranium-underground/?cs=1503

Paladin’s uranium mining deal in Malawi meets with local criticism

April 28, 2013

There is growing belief among some sections of the society that Malawi is losing out on the Kayerekera mining and have since called on the government to renegotiate the deal.

Leader of Malawi’s opposition People’s Transformation Party (Petra) Kamuzu Chibambo — who is also a prominent lawyer— said unless the deal were renegotiated, Malawi would continue to lose out in the mining sector and called upon all Malawians to galvanise their voices to press government to enter into negotiation with the miners.

Paladin has MK3.9bn environmental bond for Malawi uranium mine -Walker, Nyasa Times, 3 April 13,  Australian Miner Paladin Energy Limited, operators of the Kayerekera Uranium Mine in Karonga district have a US$10 million Environmental Performance Bond with two commercial banks in Malawi to among other things cater for rehabilitation costs for signs of default during and after mine life.

“Paladin has a MWK 3.9 Billion (US$10 Million) Performance Bond in place to satisfy the environmental obligations of Clause 18.14(a). This comprises a US$ 5 Million Performance Bond with Standard Bank Limited and US$ 5 Million Performance Bond with Nedbank Malawi Limited,” Paladin General Manager for International Affairs Greg Walker toldNyasa Times in an email response.

The bond, in the form of irrevocable letters of credit, will deal with issues like water and environment contamination and the eventual clean up.

A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

The bond further obliges the company to sensitize people on the potential dangers associated with radioactive substances and prevention procedures.

Clause 18.14(a) of the Development Agreement states that the Environmental Performance Bond “is to be in the form of an irrevocable letter of credit, with a commercial bank in Malawi and is to be in favour of the Director of Environmental Affairs.”

Walker said therefore under Clause 18.14(a) his company is obliged to establish the Environmental Performance Bond with a commercial bank in Malawi and not the Central Bank…..

There is growing belief among some sections of the society that Malawi is losing out on the Kayerekera mining and have since called on the government to renegotiate the deal.

Leader of Malawi’s opposition People’s Transformation Party (Petra) Kamuzu Chibambo — who is also a prominent lawyer— said unless the deal were renegotiated, Malawi would continue to lose out in the mining sector and called upon all Malawians to galvanise their voices to press government to enter into negotiation with the miners.

Karonga Business Community, a local non-governmental organisation, also threatened to hold demonstrations against the mine if their demands, among them turning Karonga District Hospital into a referral facility, were not met.

Civil society activists and Members of Parliament have in past also urged government to re-negotiate its contract with PAL., which owns 85 percent of Kayelekera Mine. Government owns the remaining 15 percent……  http://www.nyasatimes.com/2013/04/03/paladin-has-mk3-9bn-environmental-bond-for-malawi-uranium-mine-walker/


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