Kayelekera Mine in Karonga
* Includes constructing a 45km transmission line and a substation and a US$4 million battery energy storage facility
* To be integrated with the refurbished grid as the mining project is targeted to roll out in third quarter of 2025
* Lotus also has signed a contract with utility company PSEG Nuclear for the sale and purchase of 1.6 million lbs of U3O8 of natural uranium concentrate extracted from the Kayelekera Mine for a period of 2026-2029
By Duncan Mlanjira
Lotus Resources Limited is reported to have signed 10-year power supply agreement with Electricity Supply Corporation of Malawi (ESCOM) worth US$20.6 million to upgrade the utility company’s grid infrastructure to connect Kayekelera uranium mine in Karonga to the national grid.
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A report by Energy Capital Power online media platform; https://energycapitalpower.com/lotus-signs-3-agreements-to-advance-malawi-uranium-project/, published on Thursday, April 3, indicates that the Australian mining company’s investment with ESCOM includes constructing a 45km transmission line and a substation and a US$4 million battery energy storage facility to be integrated with the refurbished grid in the future.
According to the report, ESCOM is expected to supply power to the mine once the project becomes fully operational next year, which is targeted to roll out in third quarter of 2025.
On top of that, Lotus is also reported to have signed a contract with utility company PSEG Nuclear for the sale and purchase of 1.6 million lbs of U3O8 of natural uranium concentrate extracted from the Kayelekera Mine for a period of 2026-2029.
Lotus is also in partnership with engineering firms ECG Engineering and ResourcesWA and have completed a tender for the scope of works for the ESCOM grid connection and substation works.
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Meanwhile, Finimize newsletter; https://finimize.com/content/lotus-resources-secures-us-deal-for-malawis-uranium-output reports that Lotus Resources signed “a landmark deal with a major North American utility to supply 600,000 pounds of uranium from Malawi over the next four years, starting in 2026.
The report described the deal as “pivotal moment for Lotus Resources, ensuring a reliable reliable stream as they gear up to commence uranium production at their Kayelekera project later this year”.
“The agreement, denominated in US dollars with slight annual adjustments, matches long-term market pricing, ensuring financial stability for both parties,” says the report, adding that despite this promising development, Lotus’ stock on the market recently fell by 12%, reaching its lowest point since mid-2021.
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The newsletter further says “this is possibly reflecting market anxiety over uranium conditions or broader investor sentiments — but nevertheless, the Australian company is moving ahead with plans to secure more contracts with other nuclear utilities, aiming to bolster its market standing and investor-faith over time”.
“The slump in Lotus’ share price underscores the unpredictability in the uranium market and the inherent risks in energy investments. Investors should keep an eye on how future contracts could stabilise Lotus’ financial outlook and sway market sentiment.
“With the global shift towards cleaner energy gaining momentum, nuclear power is re-emerging as a viable sustainable option, driving up the demand for uranium. Lotus’ strategic push into utility contracts signifies confidence in nuclear’s growing role in future energy solutions, potentially reshaping global market trends.”
Malawi’s shareholding stake for Kayelekera Mine is just 15%, which has raised some concerns from some business gurus, and when asked by legislator Mark Bottoman in Parliament on Friday — if the country is benefiting from its vast minerals — Minister of Mining, Ken Zikhale Ng’oma admitted that the government has been making mistakes in the mining development agreements with foreign investors.
A report yesterday by The Sunday Times newspaper, quotes Zikhale Ng’oma as confessing that past agreements with foreign mining companies have been signed without adequate due diligence, adding that despite having vast mineral resources, Malawi has seen minimal benefits because of poor decision-making, poor policies and rushed mining development.
He also indicated that mining — which is top of agenda for the current government administration in the economic recovery of the country touted as agriculture, tourism and mining (ATM) strategy — would have take Malawi far by now but outsiders have benefited more from the minerals they have been extracting.
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“Malawi is where it is now with the mining sector because of the mistakes we have made,” he is quoted on record. “We have made strategic mistakes, we have made economic mistake, contract signing mistakes, poor funding to the Ministry of Mining, security, policy and geological mistakes. These mistakes have led to Malawi being poorer and poorer and those benefiting are from outside.”
He alluded that the foreign companies have been exploiting Malawi’s legal loopholes and weak regulatory framework, rushed nature of past agreements, saying crucial details were overlooked, resulting in unfavourable terms for the country, which allowed foreign companies to maximise profits leaving the country with little benefits.
He, however, said the government is now working on strategies to clean the mining sector by revisiting past strategies to rectify the mistakes, which was kick-started in February by suspending issuance of new mining licences while banning the export of minerals until further notices.
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