{"id":6591,"date":"2011-12-20T08:27:09","date_gmt":"2011-12-20T08:27:09","guid":{"rendered":"http:\/\/www.faceofmalawi.com\/?p=6591"},"modified":"2011-12-20T08:27:09","modified_gmt":"2011-12-20T08:27:09","slug":"paladin-africa-forcefully-responds-to-dr-perks-ligoya-radio-remarks","status":"publish","type":"post","link":"https:\/\/new.faceofmalawi.com\/index.php\/2011\/12\/20\/paladin-africa-forcefully-responds-to-dr-perks-ligoya-radio-remarks\/","title":{"rendered":"PALADIN (AFRICA) forcefully responds to Dr Perks Ligoya Radio Remarks"},"content":{"rendered":"<p> Paladin (Africa) Limited, owner and operator of the Kayelekera Uranium Mine in Karonga District,\u00a0northern Malawi, wishes to inform the people of Malawi of its position in relation to comments\u00a0made during the past week by the Governor of the Reserve Bank of Malawi, Dr. Perks Ligoya.<\/p>\n<p>In remarks on radio on 25 November and published in the local media on 26 November and 30\u00a0ovember, Dr. Ligoya criticised the Paladin Group of Companies. Dr. Ligoya:<\/p>\n<ul>\n<li>Alleged that there was no accountability in how much money Paladin earned as proceeds\u00a0from sales of uranium oxide.<\/li>\n<li>Claimed that Paladin did not remit proceeds of uranium sales to Malawi. Dr. Ligoya said:\u00a0&#8220;They were allowed to open an offshore account somewhere and they just get enough\u00a0money from that account to run their show.&#8221;<\/li>\n<li>Stated that &#8220;It was not correct for Reserve Bank at that time to agree to the arrangement that\u00a0proceeds from export of uranium be deposited in an offshore account without the Reserve\u00a0Bank having any records of movements in that account.&#8221;<\/li>\n<li>Maintained that: &#8220;It is common knowledge in any country that proceeds of main exports are\u00a0recorded as part of the foreign reserves of that country. To correct this anomaly, we have now\u00a0agreed with Paladin (Africa) Ltd that Reserve Bank of Malawi will be a co-signatory to the\u00a0offshore account. This will improve level of accountability.&#8221;<\/li>\n<\/ul>\n<p>Paladin (Africa) Limited rejects Dr. Ligoya&#8217;s claims. They are unfair, untrue and misleading.\u00a0The facts are:<\/p>\n<ol>\n<li>There is nothing about the operation of Paladin&#8217;s offshore account which is not completely\u00a0transparent and already well known to the Reserve Bank of Malawi<\/li>\n<li>There is also nothing new in the announcement by Dr. Ligoya of the proposal for the ReserveBank to become a co-signatory to Paladin&#8217;s offshore account<\/li>\n<li>agreed to this request 12 months ago &#8211; it has not happened because the Reserve Bank did not return documentation required by the relevant commercial bank to enable this change<\/li>\n<li>The Government of Malawi approves all contracts for sale of uranium oxide before export<\/li>\n<li>The Reserve Bank is fully informed on use of proceeds of uranium sales from Kayelekera Mine<\/li>\n<li>Paladin provides the Reserve Bank full disclosure &#8211; on a monthly basis &#8211; of transactions of the Company&#8217;s offshore and onshore accounts, including full reconciliation of all exports proceeds from export sales, deposits into the offshore account, loan repayments and deposits to the onshore account, together with provision of supporting bank statements<\/li>\n<\/ol>\n<p><strong>Uranium Sales Proceeds and Lending Requirements<\/strong><\/p>\n<ul>\n<li>The Reserve Bank is aware that the initial deposit of all sales proceeds into the Company&#8217;s\u00a0offshore commercial bank account is a requirement of the Kayelekera financing\u00a0arrangements, which were approved by the Reserve Bank.<\/li>\n<li>The international banks that financed development of the Kayelekera Mine require sufficient\u00a0funds to meet principal and interest payments to be held in that offshore US $ account. This\u00a0is to avoid potential default of debt servicing, including those due to foreign exchange\u00a0shortages such as Malawi now suffers &#8211; or through intervention by the Reserve Bank of\u00a0Malawi.<\/li>\n<li>Without this guarantee, international lenders would not have provided the necessary project\u00a0finance and Kayelekera Mine would not have been developed.<\/li>\n<li>All other export proceeds are transferred from the offshore account to our Malawi account\u00a0and 40 per cent of proceeds are immediately converted to Kwacha, as required by Reserve\u00a0Bank regulation .<\/li>\n<\/ul>\n<p><strong>Benefits to Malawi<\/strong><\/p>\n<p>Kayelekera Mine is the first large, modern mining project developed in Malawi on an internationalscale. Paladin&#8217;s investment in Malawi now exceeds MWK 825 billion (US$ 500 million) &#8211; more\u00a0than any other investment made in the country.<\/p>\n<p>As a result of that investment, Malawi has gained the following benefits:<\/p>\n<ul>\n<li>Additional foreign currency earnings to-date &#8211; MWK 34.9 billion (US$ 207.6 million).<\/li>\n<li>Purchases of Kwacha with foreign currency &#8211; MWK 14 billion.<\/li>\n<li>Taxes paid to the Government of Malawi &#8211; MWK 2.8 billion.<\/li>\n<li>Royalties paid to the Government of Malawi &#8211; MWK 379.9 million.<\/li>\n<li>Purchases of goods and services from Malawian businesses &#8211; MWK 31.4 billion.<\/li>\n<li>Kayelekera Mine injects MWK 200 million into the Malawian economy every week.<\/li>\n<li>Expenditure on social and community projects (water supply, schools, health, etc) &#8211; MWK\u00a02.55 billion.<\/li>\n<li>Expenditure on exploration to extend the life of the mine &#8211; MWK 576.7 million.<\/li>\n<li>Direct employment of 994 Malawians; indirect employment of thousands more.<\/li>\n<\/ul>\n<p><strong>Concessions and Conditions<\/strong><\/p>\n<p>Dr Ligoya said: &#8220;We gave out a lot of concessions and funny conditions that Kayelekera\u00a0people &#8211; they are in Namibia &#8211; they don&#8217;t have those conditions like they sort of coined with\u00a0us here in Malawi.&#8221;<\/p>\n<p><strong>The facts are:<\/strong><\/p>\n<ul>\n<li>Concessions granted by the Government of Malawi to Paladin reflected the Company&#8217;s role\u00a0as the pathfinder in developing Malawi&#8217;s resource sector and were in line with similar\u00a0concessions granted to developers in other countries.<\/li>\n<li>In exchange for those concessions, Paladin invested US$ 500 million in Malawi and gave\u00a0the Government of Malawi a 15 per cent free-carried equity stake in PAL, leading to the\u00a0benefits outlined above, which are on-going .<\/li>\n<\/ul>\n<p><strong>Transparency and Accountability<\/strong><\/p>\n<p><strong>Dr. Ligoya stated: &#8220;There was no accountability whatsoever in how much money they are\u00a0getting as profits. It&#8217;s pathetic.&#8221;<\/strong><\/p>\n<p><strong>The facts are<\/strong>:<\/p>\n<ul>\n<li>Reserve Bank knows that Paladin , as a publicly-listed Company, is required by law to abide\u00a0scrupulously to its reporting obligations. The Company conducts its business to the highest\u00a0standards of integrity and technical diligence that would withstand the most rigorous third\u00a0party scrutiny and auditing.<\/li>\n<li>As a shareholder in Paladin (Africa) Ltd, the Government of Malawi has a Director on the\u00a0Company&#8217;s Board and is able to scrutinise the Company&#8217;s actions and accounts at any time.<\/li>\n<\/ul>\n<p>Profitability of Kayelekera Mine<\/p>\n<p>Despite the assertions by Dr. Ligoya, the people of Malawi should know and understand that\u00a0Paladin&#8217;s Malawi operations are currently loss making (not profitable) and its running costs,\u00a0including wages and salaries, continue to be part funded by the parent company in Australia, thus\u00a0enabling the Kayelekera Mine to continue operating.<\/p>\n<ul>\n<li>Rather than making substantial profits from its Malawi operations, in view of the current\u00a0world economic crisis and the significantly- reduced price of uranium oxide, Paladin has not\u00a0received a single Kwacha in return on its investment in Malawi of US$ 500M over the past\u00a0five years.<\/li>\n<li>Paladin has not received any interest on inter-company loans provided to the Malawi\u00a0operations as the Kayelekera Mine is currently unable to afford such payments.<\/li>\n<li>This situation is largely a consequence of tsunami-related damage to the Fukushima nuclear\u00a0power plant in Japan last March, which led to a 30 per cent reduction in the price of uranium\u00a0oxide.<\/li>\n<li>Far from making profits, the audited financial statements for Paladin (Africa) Ltd, which have\u00a0been provided to the Reserve Bank, show losses of MWK 9.2 billion (US$ 56M) to 30 June\u00a02011.<\/li>\n<li>On 14 November 2011, Paladin (Africa) Ltd&#8217;s Australian parent company announced a loss\u00a0of US$123.4 million, substantially as a consequence of its operations in Malawi.<\/li>\n<\/ul>\n<div>Despite these difficult circumstances, Paladin (Africa) Ltd continues to meet in full its obligations\u00a0to the Government of Malawi and, on a monthly basis, makes very significant payments in taxes\u00a0and royalties, generates valuable export earnings and continues to provide employment to 994\u00a0Malawians.<\/div>\n<p>Paladin is proud of its faith and investment in Malawi. The Company looks forward to a brighter\u00a0future when the uranium price fully recovers, as we confidently expect it to do. In the meantime,\u00a0Paladin expects that its commitment will be matched by a level of cooperation and consideration\u00a0on the part of the Reserve Bank and the Government of Malawi. A lack of mutual commitment\u00a0will be detrimental for all stakeholders.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Paladin (Africa) Limited, owner and operator of the Kayelekera Uranium Mine in Karonga District,\u00a0northern Malawi, wishes to inform the people [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":5876,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[81],"tags":[1423,1364,1014],"class_list":["post-6591","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national-news","tag-ligoya","tag-paladin","tag-radio"],"_links":{"self":[{"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/posts\/6591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/comments?post=6591"}],"version-history":[{"count":0,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/posts\/6591\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/media?parent=6591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/categories?post=6591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/tags?post=6591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}