Uranium mining companies in Africa: The case of Paladin Energy in Malawi

Nuclear Monitor Issue: 
Anica Niepraschk

Poor work conditions with a high exposure to radiation, such as when workers are forced to continue working despite an insufficient supply of dust masks at the mine. The use of flammable chemicals in dangerous quantities resulting in a flash fire causing the deaths of two people and serious injuries to another. A workshop accident causing the death of another worker. Several road accidents resulting in two more fatalities and in a spill of highly radioactive yellowcake, concentrated uranium, near the mine. The failure of a tailings dam causing the release of radioactive tailings into the environment and the ‘controlled' release of tailings without public information on the residual contamination of the discharged water after treatment into the nearby Sere river which partly serves as drinking water source for local residents and runs into Lake Malawi, which provides a source of water and fish for millions of people.

These are just some of the reported incidents at the Kayelekera uranium mine in Malawi. The mine is located in the north of the country, close to the Tanzanian border and started operation in 2009. It is the country's first and only uranium mine and is operated by Paladin Africa, a 100% subsidiary of Paladin Energy, which is based in Perth, Western Australia. Since February 2014, Kayelekera has been placed in care and maintenance due to continuing low uranium prices and the high production cost of the mine. According to Paladin, this would make operation of the mine uneconomical and cost the company millions to run each year.

Paladin is the first of a large number of Australian junior exploration and mining companies trying to tap into Africa's huge uranium deposits. They are attracted not only by the large deposits but also by less sophisticated environmental and health regulations and legislative frameworks. Many African countries do not have appropriate mining and radiation legislation in place to minimise the risks of mining and uranium mining in particular, which is still relatively new to the continent and has unique radiological risks. Furthermore, tax and royalties' regulations as well as other legislation to ensure the host country benefits economically from the mining operations are often inadequate.

Junior companies which do not have the operational experience, financial and other capacity to comply with stricter regulations in the experienced uranium mining environments of Europe, North America and Australia increasingly try to use these circumstances to pave their way into the uranium market by venturing into Africa. This is well illustrated by Paladin's CEO and Executive Director John Borshoff, who in 2006 stated that: "The Australians and the Canadians have become over-sophisticated in their environmental and social concerns over uranium mining, the future is in Africa."

This attitude puts at risk the people and environment in the targeted African countries.

Holding Paladin accountable

In the case of Kayelekera, civil society has been enormously concerned over the impacts of the mine and tries to hold Paladin accountable. Access to the site and key monitoring documents like environmental reports and radiation doses for workers and the public were and are requested, but with the exemption of one site visit have continuously been denied or subject to avoidance strategies. Paladin, however, claims to comply with international reporting, health and safety as well as environmental standards. While Paladin recently talked about stewardship and sustainability at the Australian Uranium Conference1 in Perth, it is worth having a look at the actual reality of its operations.

In a 2012 monitoring trip, followed up by a recent visit to Kayelekera, CRIIRAD2, a French NGO specialising in independent radiation monitoring, found uranium levels in the Sere river downstream from the mine of 0.042 mg/l, exceeding the WHO guideline of 0.030mg/l and 194 times higher than upstream from the mine. There is no information publicly available on how radiation levels are monitored on and off site and on the measured individual exposure levels of workers. This is against both the official company policy and international labour laws. There is no indication as to what treatment or compensation is available to workers who suffer from long-term health impacts.

The tailings dam is located on a site with negative geological and hydrogeological characteristics such as seismic activity, fault lines, high rainfall and strong erosion and is not subject to proper confinement. Furthermore there is no clear plan available as to how run-off water will be handled after mine closure. These are just a few issues CRIIRAD raised on the significant impacts of Kayelekera on the health and safety of workers and on the environment.

Moreover, Paladin's operations fail to contribute to Malawi's economic development. Malawi is ranked the world's poorest country. Yet, as a recent report3 by ActionAid states, the country loses out on US$43 million revenue from the Kayelekera operation due to a number of royalties and tax reductions stipulated in the mining agreement between Paladin Africa and the government of Malawi. According to the report, Paladin is also avoiding outstanding payments through transfer pricing. This refers to the company making tax-free payments to the Netherlands, where it has a holding company without staff, and thereby running Kayelekera on thin capitalisation. Paladin Africa thereby gains excessive interest reductions, further stripping Malawi of any economic benefit derived from the mining operations.

Operations like this damage not only the lives and livelihood of people in African countries but also the reputation of Australian mining companies abroad. The poor health and safety track record of Australian companies operating in Africa, including numerous fatalities4, is heavily criticised in a new report by an International Consortium of Investigatory Journalists.5 The report notes that some of the practices used in Africa would be impermissible and unthinkable in Australia.

Australian Senate Inquiry

In 2011, the results of a Senate Inquiry into Australia's relationship with African countries were published.6 Mining companies' operations in Africa were highlighted as having a good record in establishing policies on the protection of human rights and the environment but their implementation is often limited. So are corporate and social accountability. It was also found that this is a particular challenge with junior companies.

The Senate Inquiry recommended that the Australian government should undertake steps for Australia to become an Extractive Industries Transparency Initiative7 (EITI) compliant country and to continue to promote EITI principles and other corporate social responsibility instruments. EITI is a coalition of governments, companies and civil society groups, investors and international organisations, which has developed a global standard that promotes revenue transparency on a country level. It aims to strengthen governance by improving transparency and accountability over payments and revenues in the extractives sector.

Although there is a broad support for developing countries joining EITI, few industrialised countries have. In 2001, under a Labor Party government, Australia stated that it would implement an EITI pilot, which was completed last year. A multi-stakeholder group analysed the report and found that moving to implementation of EITI candidature would be appropriate. This result is currently being considered by the conservative Liberal/National government.

Becoming EITI compliant would set a good example for other countries to follow as well as build trust in Australia's exploration and mining operations overseas. A further recommendation by the Senate Inquiry was to establish and fund a special unit tasked with developing a regulatory framework model for the mining and resources sector, which African countries could consider adopting according to their requirements. This recommendation has so far not been pursued.

It is clear that essential conditions for local benefits from mining operations, like the experience and frameworks to negotiate equitable agreements, regulation, legislation and the mechanisms for local oversight and regulatory enforcement have to be developed and implemented in the respective host countries. This includes, for example, modernising mining and revenue laws, the administration of land title and mining registries and the creation of publicly available databases.

There is an ongoing need for civil society engagement with and oversight of Australian mining companies operating overseas. Time and time again problems are identified not by governments or regulators, but by workers and civil society. That will not change even if Australia does become EITI compliant, but EITI compliance would help facilitate such engagement and thereby pave the way to improved accountability and transparency. Achieving a responsible and accountable mining culture, however, takes much more than that and is an ongoing challenge − both at home and abroad.

Anica Niepraschk is a political scientist specialised in governance issues and civil society participation. She has a working background in Zambia, the DR Congo and Botswana and currently follows governance issues in the nuclear sector.


1. www.verticalevents.com.au/uranium2015/programme.html

2. www.criirad.org/english/presentation.html

3. www.actionaid.org/australia/taxpower

4. http://projects.icij.org/fatalextraction/_ga=1.155542907.1926188625.1437...

5. www.icij.org/project/fatal-extraction/australian-mining-companies-diggin...

6. www.aph.gov.au/Parliamentary_Business/Committees/Joint/Completed_Inquiri...

7. https://eiti.org/