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UN examines Australian uranium miner Paladin’s Malawi operations

UN rubbishes Malawi’s Paladin uranium deal, fertilizer subsidy By Hudson Mphande, Nyasa Times July 23,  2013  United Nations Special Raportuer on the Right to Food Olivier De Schutter who was in Malawi for an assessment of the food situation in the country has rubbished Kayerekera uranium mine deal between Malawi and Australian Paladin Mining Company saying the Southern African country has had a raw deal that is robbing the poor.

The UN Raportuer said the uranium mining deal was one of the investments in Malawi through which the country is losing resources that could otherwise make a difference in food security and other pro-poor initiatives. He said in the life span of the mine Malawi is expected to lose almost US$281 million…

“Mining companies are exempt from customs duty, excise duty, value added taxes on mining machinery, plant and equipment. They can also sign special deals on the rate of royalty owed to the government. I believe that there are more reasons that investors would come to Malawi without such incentives,” he said.

De Schutter was addressing journalists in the capital Lilongwe at the end of his 11-day tour of the country.

He bemoaned that due to illicit financial flows, tax envasion as well as tax incentives that the country offer to both domestic and foreign companies currently Malawi was failing to get maximum use of its resources.

De Schutter said that revenue losses from special tax incentives to Paladin Africa Mining alone are estimated at almost K67 billion (US$205 milion) since the mine started its operations and could reach almost K92 billion (US$281 million) over its13-year lifespan.

“Paladin alone is costing the budget more than US$20 million (almost K8 billion) a year in taxes,” he said.

He added: “I am convinced that unless combined with a comprehensive enhancement and optimisation of tax revenue, current macro-economic reforms may not have substantive positive impacts. There is need for
Malawi to examine its national tax laws and policies towards preventing illicit capital flight. As mining develops, Malawi can simply not afford business-as-usual.”

The UN Special Raportuer said it is estimated that the country has lost over 10 percent of its growth domestic product (GDP) to illicit outflows and tax evasion over the period 1980 to 2009……..

De Schutter also specifically expressed concerns on the country’s current minimum wage currently at K371 ($1.12) per day, describing it as the lowest in the world…… The UN special rapporteur said he will give a report and his recommendations to both the UN Human Rights Commission and the Malawi Government. http://www.nyasatimes.com/2013/07/23/un-rubbishes-malawis-paladin-uranium-deal-fertilizer-subsidy/

July 24, 2013 - Posted by Christina Macpherson | AUSTRALIA, Malawi, politics international, Uranium