Sunday, March 28, 2010
Ironic Contrast in Mining Uranium and Coal in Malawi
By Gregory Gondwe
There is a big contrast between Malawi’s newly established Kayelekera Uranium Mine in Karonga and 30-year-old Mchenga Coal Mine. In a run of the mill, the two cannot compare because the other one is into expensive product, uranium, while the other one is just excavating ‘coal’.
These realities came into comparison when Minister of Labour and Vocational Training Mr. Yunus Mussa wanted to appreciate the working conditions of miners in the two mines and visited them.
On Monday the 15th March 2010, the Minister was speechless upon visiting Kayelekera Uranium Mine in Karonga describing the working conditions at the place as something of outside this world, what with good salary package, hotel standard diet and proper lodging places.
However, come the following day on 16th March 2010 at Mchenga Coal Mine, the minister was baffled with the inhuman conditions workers were encountering at the mine in Rumphi.
Workers at Mchenga get hurt regularly since there are so many accidents and yet even when most of them end up being injured, they are not being compensated.
“Their working conditions are hard because workers work between 6AM and 2PM without breaking for meals and worst still, without protective clothing,” said Mussa.
“I will be meeting the owners of Mchenga Coal Mine so that they improve the conditions at this mine or it risks closure,” warned Mussa.
Perhaps the background and the current standing of the two mines explain more of why the mines seem to be in such a big contrast.
Kayelekera Uranium Mining Project in Karonga which recently begun production and exportation of Uranium is owned by Paladin Africa Limited, which is jointly owned by an Australian company, Paladin Energy Limited and Malawi Government which holds 15% shares.
On the other hand, Mchenga Coal Mine was initially wholly owned by Malawi government before it was privatised in 1999 and it was known as Coal Products limited.
A Jamaican investor and Malawian investor Mr. Rafik Gaffar who is the managing director now jointly own it.
Mr. Gaffar says the initial capital injected in the mine was US$450,000 although the total investment now stands at US$7 million.
The Mchenga Coal Mine is located in the 90 square KM Livingstonia Coal Field which has probable reserves of 25 million tons
Kayelekera’s first export of Uranium Oxide took place in August of 2009 and is making towards its full potential of shipping out 1,500 metric tons per year, which translates to around 125 metric tons a month. Mchenga Coal Mine is the only coal mining company in Malawi, which ordinarily is supposed to manage a production target of 6000 tonnes a month.
The coal company supplies to the country’s big companies such as Southern Bottlers, Carlsberg Malawi, Chibuku Products, Ethanol and Unilever East Africa, it also exports to Mbeya in Tanzania.
Kayelekera is however, the first major investment in Malawi to be supported by a package of international bank lending according to Finance Minster Mr. Ken Kandodo Banda.
This has enabled it to complete on time and close to its original budget should make it easier for other projects in the country to secure support from international capital markets.
The Minister said Kayelekera is designed to process 1.5 million tons of ore, and produce 3.3 million pounds of uranium oxide per year.
“It is expected that the maximum production level will be attained during 2010. The uranium oxide is exported overseas where it is then subjected to an enrichment process so that it can be used in the generation of nuclear power,” said Kandodo in parliament last year.
He said the project has also helped boost employment for Malawians.
During the construction phase, the project saw as many as 2 000 people being employed and out of this work force, more than 75% were Malawian.
Now that the mine has commissioned production, around 225 people are employed directly by Paladin, with more than 70% being Malawian. As of the end of September, there were over 650 other employees on the site employed by various sub-contractors.
The fiscal regime under which the Kayelekera Mining Project is operating is one that has four main components, namely – royalty, company tax, Government equity in the project, and specified benefits to the local community to be provided by Paladin.
Well, while the minister was full of appreciation with what he saw at Kayelekera Uranium Mine his failure to understand the plight workers at Mchenga Coal Mine are experiencing forced the minister to start looking for what could be the cause of the situation.
According to the minister, the main culprit is the Malawi Congress of Trade Union (MCTU), which he said, is failing workers in the country.
“The ministry of labour is now in the forefront fighting for workers’ rights while MCTU is only benefiting from union membership fees without doing something for it,” he said.
Mr. Mussa said he was very disappointed with MCTU.
“Instead of visiting various work places and civic educating their union members MCTU seems like they are not aware that this is their role,” he charged.
“Our ministry has started working as if it is a unionists grouping,” said Mussa “Please MCTU officials get out of your offices and visit workers.”
MCTU Secretary General Mr. Robert Mkwezalamba said since they are just an umbrella body with 22 affiliated unions Construction, civil Engineering and allied workers Union CCAU is the one that has mines as one area of operations.
Secretary General for the CCAU Mr. John Obongo Mwafulirwa said what the minster had said is not correct.
“As a union we went to Mchenga Coal Mine in January last year where we found lots problems at the place as a workplace,” he said.
Mr. Mwafulirwa said the housing system at the place is inhuman, while over K6million of money deducted from workers for SACCO purposes was never remitted and was instead misappropriated by the company’s former management team.
He said besides the sticking SACCO issue, there are also issues to deal workers pensions.
“Government created some of these problems when it owned the company before it underwent privatisation,” said Mwafulirwa.
He said all the issues related to Mchenga Coal Mine are in the hands of ministry labour and all the Union can do is to force the ministry to help the workers...
Nonetheless, the minister said government would be meeting directors of the mine to discuss about the conditions and the need to improve them.
Meanwhile the naked contrasts between the two mines ironically challenge each other begging for more than just ministerial words.