No economic sense for Malawi’s nuclear power plant - Paladin

by Gregory Gondwe    October 08, 2008

Despite Malawi’s venture into uranium mining, the company carrying out the project says it does not make any economic sense for the country to ‘even think of establishing its nuclear power plant’.
Malawi suffers intermittent power supply that comes from several hydro run turbines which Paladin Limited has avoided to tap into while carrying out its mining operations at Kayelekera uranium deposit, 40km west of the town of Karonga on the shore of Lake Malawi.
“Malawi having its nuclear power station is an issue to be discussed on the basis of the cost of installation versus the number of users or the people who will draw the power,” said Neville Huxham Paladin Limited Country manager for Malawi.
“It will not make economic sense to build a big power plant when you cannot sell the electricity,” insisted Huxham. “The economics of putting such a plant need to be examined on the basis of the demand for users.”  
The company’s Executive Operations Manager Jim Morgan said Malawi only manages to produce 224 megawatts while a smaller nuclear power plant produces about 1000 megawatts.
“Malawi has to establish what it can do with the remaining 700 megawatts because for the country to be able to develop a power plant there is need to source US$80bn from financial institutions,” he explained.  
He said although power supply is a problem in Malawi there is no way this project would be feasible.
The sole electricity provider the Electricity Supply Commission of Malawi SCOM has supply reliability of less than 80 %.

Morgan said for Paladin to depend on power from Escom then the company would be declared bankrupt due to constant power outage.
“We need a power utility supply that is 99 % dependable once we rely on Escom we can run bankrupt because we will be moving in reverse gear due to intermittent power supply,” he said.
Production of the yellow cake at the mine will start the next year soon after the rainy season, which ends between the months of April and May.
The company was last Tuesday commemorating 2 million man-working hours without any injury, which it described as a significant achievement.
The company has injected US$200 million capital cost into the project which is expected to generate between $150 million and $180 million a year, depending on the price of uranium.

The project has created up to 1500 jobs during the construction phase and is expected to take up more than 200 permanent jobs in the operations phase, besides the employment of contractors.

The venture could become a top export earner for the Malawian government, which owns 15 percent of Paladin Africa Limited.

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