The Poor Man Pays

Kayelekera Earns Malawi K23bn – The poor man pays

Dumbani Mzale reported in the Daily Nation of 19 May that the Kayelekera Uranium Mine, near Malawi’s border with Tanzania, had earned Malawi K23bn (about US$149 million). This was according to a press release issued by the owners and developers, Paladin Energy Limited. Paragraph after paragraph of Mzale’s article uncritically quotes the companies line about how much it contributes to the Malawi economy.

It turns out that total sales from the mine are $148,888,500 with increases likely as the volume of output increases. This is not the same as Malawi earning $149 million as the headline implied. According to a company spokesman quoted in the article,” Clearly, this has generated valuable foreign currency for Malawi as well as resulting in significant royalty payments to the Government of Malawi…”

From the Malawi end the reporter quotes the Minster of Energy and Mines, the Minister Grain Malunga who, “…lauded the contribution Kayelekera is making to the Malawi economy. He said apart from substantial forex being generated; the mine is also creating employment in the country. There are also a lot of tax being paid to the government from the mine. Government is also getting royalties. The company has employed over 1,000 workers. In addition, the people surrounding the mine are providing foodstuff to the workers and are earning income in return, said Malunga.”

Nobody in the Malawi media wants to hear the bad news. It is not spoken. It is not tolerated. Early on, as the mine was being planned, concern about and opposition based on environmental issues was raised by civil society organisations and even some chiefs. It was widely under-reported and sternly put down by the powers-that-be in the country, who are blindly wedded to the free market, private enterprise, World Bank model. The mine is bringing money into the country. In their view, investment - any investment - will benefit them and according to the dribble down effect, it is therefore good for the whole country. On that basis, they would not brook any opposition to the mine. Businessmen, politicians and even journalists labelled the dissenters as ignorant and purely obstructionist for opposition’s sake.

Even dear old Malawian friends of mine who have shared so much politically over the years looked askance at me with a patronising tilt of the head when I denounced the mine and its consequences for Malawi. They didn’t argue with Doug, their old friend in his greying years, but he must clearly be missing the point of how important this mine is to Malawi. There he is on another one of his radical rants.

The issue of uranium is old stuff in Canada. The testimony of survivors or Uranium City in Saskatchewan and Elliot Lake in Ontario and a militant and informed citizenry have literally pushed the uranium mining industry off the map in Canada. Nonetheless, commodity prices have risen over the last few years driving the price of uranium to record highs, so the industry started ramping up a come-back strategy.

All the government doctors in Sept-Isle threatened to resign en masse if a licence to prospect uranium close to the city was granted. The scenario resembled Malawi in many ways except for the power of democracy. The Quebec government, which incidentally shares with its Malawi counterpart many of the same basic economic principles, initially condemned the doctors for blackmailing the population and fear-mongering. It tried to isolate the dissenters, trivialise the concerns and maximise the benefits. The business dominated media sided with the government and industry.

That is where the power of democracy and an informed citizenry came in. Considerable mobilisation went on in the Sept-Isle community, where there is a history of labour militancy. The tragic stories of former uranium towns were recounted. The science behind the dangers and risks associated with this toxic product were once again presented for all to see. The lack of real economic benefit and the tragic scars left on the environment were pointed out once again. The community fell in solidly behind the opposition and the credibility of government and industry was once again left in tatters for defending the indefensible and promoting development that is anti-people and anti-environment. People won out over profit.

That is what is missing in the debate in Malawi. It is not a question of respecting the cultural values and sensitivities of Malawi. These are class issues not cultural ones. Real democracy is a long way from being deeply rooted in this country. The wealth owners never suffer when mines pollute, workers are poisoned and the local environment despoiled. There is some profit for a few some people. In a country of 14 or more million people, the small business elite may be reaping considerable benefit for themselves, but the overall negatives, all well documented, are not to stand between a business elite determined to enrich itself and the long term consequences for the people and their land.

Even the workers are not happy with their circumstance. A sort of apartheid exists between the Malawi employees and the foreign workers brought in to run the place which has led to considerable resentment. Again government comes down forcibly on the side of business and against the workers and their legitimate rights and demands.

International organisations of great repute have shown in considerable detail how African countries including Malawi are exploited at considerable human and environmental cost by the quick talking and slick presentations of the multinational mining industry. Uranium is one of the worst for long term pollution, falsifying the benefits and leaving a mess behind for others to clean up. Royalties are underpaid and tax returns are grossly overstated and underpaid. In fact, with the World Bank encouragement, governments give the companies huge tax exemptions, agree to take greatly lowered royalties and accept the cooked up figures the companies provide to pay less at the Malawi end and offer bigger profits to their shareholders at the other.

In the end, as the famous song from South Africa says, the poor man pays. He pays as cheap labour, his environment is despoiled and his women are reduced to prostitution. The rich man is happy.

Malawi has the double dilemma historically because it was always told that it had no mineral wealth. Now that it possesses mineral wealth, it is hard to accept that it is poison. During colonial times, Malawi was a labour reserve for the mines of South Africa, and Southern and Northern Rhodesia. My brothers-in-law, Frazer and Madalitso both went with WENELA (Witwatersrand Native Labour Organisation) for those famous nine month contracts in the mines. Frazer went down seven times over the 70s and 80s before the operation was closed down by the militancy of the South African miners who wanted to shut out this source of cheap labour. Malawians see those mines and the riches they produced for those countries and are not happy being told that they shouldn’t benefit in a similar fashion.

A front page article just last month in either the Nation or the Times denounced the fact that government had lost out on billions in taxes on the diesel fuel that Kayelekera imports for the generators it needs to process its ore. Kayelekera Uranium Mine was granted a tax exemption on all the fuel it needs to import. Meanwhile fuel prices almost cripple the ability of ordinary people to get around the country for whatever purpose. Again the poor man pays.

This is not to be one sided and critical of Malawi and its tiny elite which has its own battles to hold its own against many factors working to Malawi`s detriment. In Canada, despite years of civil society militancy, publicity and denunciation, the mining industry and its collaborators in government remain blissfully immune and impervious to pressure for change. With their lobby they have rendered the struggle to make the industry accountable and impose corporate responsibility just about ineffectual. Even the name of their recent conference and exhibition tells the story of their ability to go where they want and do as they wish: “Mines Without Borders.” The battle over the private members bill to make mining companies accountable revealed the industry’s power and arrogance and its ability to mobilise to impose its will.

In an article I received by email from Canada covering the mining industry conference, someone pointed out that “… With 75% of the world's mining companies registered on the Toronto Stock Exchange, Canada is a global leader in the mining industry. Without effective government regulation, Canadian investment - public and private - will continue to fuel violent conflict and environmental destruction around the world.”

Palladin is owned in Australia, but the issues are the same and here in Malawi, and the rest of Africa, the poor man pays.