Identifier
Created
Classification
Origin
09LILONGWE552
2009-10-08 07:04:00
CONFIDENTIAL
Embassy Lilongwe
Cable title:
MALAWI URANIUM EXPORTS BEGIN
how-toVZCZCXRO5123 RR RUEHBZ RUEHDU RUEHMR RUEHRN DE RUEHLG #0552/01 2810704 ZNY CCCCC ZZH R 080704Z OCT 09 FM AMEMBASSY LILONGWE TO RUEHC/SECSTATE WASHDC 0784 INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE RUEHLO/AMEMBASSY LONDON 0406 RUEKDIA/DIA WASHDC RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC RHMFISS/HQ USAFRICOM STUTTGART GE
C O N F I D E N T I A L SECTION 01 OF 02 LILONGWE 000552
SENSITIVE
SIPDIS
LONDON FOR AF WATCHER PETER LORD
E.O. 12958: DECL: 10/06/2019
TAGS: EMIN EINV ECON ELTN ENRG KNNP MI
SUBJECT: MALAWI URANIUM EXPORTS BEGIN
REF: LILONGWE 108
LILONGWE 00000552 001.2 OF 002
Classified By: Charge Kevin K. Sullivan for reasons 1.4 B and D.
C O N F I D E N T I A L SECTION 01 OF 02 LILONGWE 000552
SENSITIVE
SIPDIS
LONDON FOR AF WATCHER PETER LORD
E.O. 12958: DECL: 10/06/2019
TAGS: EMIN EINV ECON ELTN ENRG KNNP MI
SUBJECT: MALAWI URANIUM EXPORTS BEGIN
REF: LILONGWE 108
LILONGWE 00000552 001.2 OF 002
Classified By: Charge Kevin K. Sullivan for reasons 1.4 B and D.
1. (SBU) Summary: Australian mining firm Paladin Africa
made its first shipment of yellowcake from the firm's
northern Malawi mine in September. Paladin ships its uranium
overland through Malawi, Zambia and Namibia to the Atlantic
Port of Walvis Bay. Paladin sells on one-year contracts,
with its entire output currently committed to three unnamed
customers. Paladin's mine represents the largest single
investment in Malawi; income generated is expected to add as
much as 10 percent to Malawi' s export earnings. End summary.
The Waiting Ends: Malawian Uranium Exports Begin
-------------- ---
2. (SBU) Paladin (Africa) Managing Director Neville Huxham
told us on September 30 the company's uranium mine and
processing facility at Kayelekera in northern Malawi made its
first shipment of yellowcake in September. He said the
company purposely made the shipment with no fanfare to avoid
interference by mine opponents. Huxham said the mine
production was on track to reach its full output capacity by
the end of this year.
3. (SBU) According to Huxham, Kayelekera uranium is packed in
44-gallon drums and containerized for shipment, following
IAEA guidelines. The mine expects to make ten shipments per
year, at approximately 150 tons each. Shipments travel by
truck through Malawi and into Zambia at the Mchinji-Chipata
border crossing, and then on through Zambia and Namibia en
route to the Atlantic Port of Walvis Bay. Paladin retains
full responsibility for the shipments on land and sea until
delivery to the customer.
4. (SBU) Huxham said that Paladin had investigated the ports
of Dar-es-Salaam, Nacala and Beira during their project
feasibility studies, but determined that these options would
take at least three years to bring up to the IAEA standard
for storage and handling of uranium. He added that the
current security situation in the western Indian Ocean poses
a real concern.
Bureaucratic Hurdles Cleared, Security Ready
--------------
5. (SBU) Huxham confirmed that all necessary permits had been
secured for the shipments, though the firm had encountered
some delays with Zambian and Namibian officials. Huxham
noted, however, that SADC protocols guarantee the rights of
any member to transit its goods through other members to
market.
6. (C) Uranium shipments will be escorted by six armed
members of the Malawi Police Service in Malawi. The Malawian
military will not be involved. In Zambia, shipments will be
accompanied by escorts from a range of ministries,
departments and agencies. Huxham said Paladin was successful
in walking the Zambians back from their initial requirement
for sixteen armed policemen to three with each convoy,
arguing that a smaller armed escort would attract less
attention and therefore less threat.
Customers: Unnamed
--------------
8. (SBU) Huxham confirmed that the entire output of the mine
for the next year was already contracted to uranium
processors, not end-users. He said that there are currently
three customers, but noted that provisions in the contracts
prohibit Paladin from revealing their identities. Huxham
explained that similar one-year contracts will be signed
during the life of the mine, with the same or different
customers, ensuring that all of the mine's output will be
sold.
Comment
--------------
9. (SBU) The first export of yellowcake from Kayelekera marks
an important milestone in Malawi's economic development.
While the mine makes only a small dent in Malawi's
unemployment, the impact on GDP and Government revenue will
be substantial. With Malawi's economy still dependent on
subsistance agriculture, hopes are high that this major
LILONGWE 00000552 002.2 OF 002
resources project can lead to further development in the
mining sector.
SULLIVAN
SENSITIVE
SIPDIS
LONDON FOR AF WATCHER PETER LORD
E.O. 12958: DECL: 10/06/2019
TAGS: EMIN EINV ECON ELTN ENRG KNNP MI
SUBJECT: MALAWI URANIUM EXPORTS BEGIN
REF: LILONGWE 108
LILONGWE 00000552 001.2 OF 002
Classified By: Charge Kevin K. Sullivan for reasons 1.4 B and D.
1. (SBU) Summary: Australian mining firm Paladin Africa
made its first shipment of yellowcake from the firm's
northern Malawi mine in September. Paladin ships its uranium
overland through Malawi, Zambia and Namibia to the Atlantic
Port of Walvis Bay. Paladin sells on one-year contracts,
with its entire output currently committed to three unnamed
customers. Paladin's mine represents the largest single
investment in Malawi; income generated is expected to add as
much as 10 percent to Malawi' s export earnings. End summary.
The Waiting Ends: Malawian Uranium Exports Begin
-------------- ---
2. (SBU) Paladin (Africa) Managing Director Neville Huxham
told us on September 30 the company's uranium mine and
processing facility at Kayelekera in northern Malawi made its
first shipment of yellowcake in September. He said the
company purposely made the shipment with no fanfare to avoid
interference by mine opponents. Huxham said the mine
production was on track to reach its full output capacity by
the end of this year.
3. (SBU) According to Huxham, Kayelekera uranium is packed in
44-gallon drums and containerized for shipment, following
IAEA guidelines. The mine expects to make ten shipments per
year, at approximately 150 tons each. Shipments travel by
truck through Malawi and into Zambia at the Mchinji-Chipata
border crossing, and then on through Zambia and Namibia en
route to the Atlantic Port of Walvis Bay. Paladin retains
full responsibility for the shipments on land and sea until
delivery to the customer.
4. (SBU) Huxham said that Paladin had investigated the ports
of Dar-es-Salaam, Nacala and Beira during their project
feasibility studies, but determined that these options would
take at least three years to bring up to the IAEA standard
for storage and handling of uranium. He added that the
current security situation in the western Indian Ocean poses
a real concern.
Bureaucratic Hurdles Cleared, Security Ready
--------------
5. (SBU) Huxham confirmed that all necessary permits had been
secured for the shipments, though the firm had encountered
some delays with Zambian and Namibian officials. Huxham
noted, however, that SADC protocols guarantee the rights of
any member to transit its goods through other members to
market.
6. (C) Uranium shipments will be escorted by six armed
members of the Malawi Police Service in Malawi. The Malawian
military will not be involved. In Zambia, shipments will be
accompanied by escorts from a range of ministries,
departments and agencies. Huxham said Paladin was successful
in walking the Zambians back from their initial requirement
for sixteen armed policemen to three with each convoy,
arguing that a smaller armed escort would attract less
attention and therefore less threat.
Customers: Unnamed
--------------
8. (SBU) Huxham confirmed that the entire output of the mine
for the next year was already contracted to uranium
processors, not end-users. He said that there are currently
three customers, but noted that provisions in the contracts
prohibit Paladin from revealing their identities. Huxham
explained that similar one-year contracts will be signed
during the life of the mine, with the same or different
customers, ensuring that all of the mine's output will be
sold.
Comment
--------------
9. (SBU) The first export of yellowcake from Kayelekera marks
an important milestone in Malawi's economic development.
While the mine makes only a small dent in Malawi's
unemployment, the impact on GDP and Government revenue will
be substantial. With Malawi's economy still dependent on
subsistance agriculture, hopes are high that this major
LILONGWE 00000552 002.2 OF 002
resources project can lead to further development in the
mining sector.
SULLIVAN