Mining & Trade News

ASX-listed Lotus Resources, which is advancing preparations to resume uranium mining at Kayelekera Mine in Karonga, has announced that it has signed two key agreements with the Electricity Supply Corporation of Malawi (Escom) to facilitate the Kayelekera Project being connected to the power grid and the supply of electricity from the grid to the Kayelekera Project.

Lotus has also signed a binding “Contract for the Sale and Purchase of Natural Uranium Concentrates” with North American power utility PSEG Nuclear LLC reflecting the previously announced term sheets.

Lotus Managing Director Greg Bittar comments: “This is another terrific milestone towards the optimisation of the Kayelekera Project. Together, these agreements cover the design and construction of a new transmission line and substation infrastructure connecting the Kayelekera site to an upgraded substation in Karonga and the provision of electricity to the mine.”

“Whilst these agreements were being finalised, Lotus, working with its consultants, electrical engineering group ECG Engineering and ResourcesWA (a specialist energy and mining group), completed a tender for the scope of works for the grid connection and substation works with fixed price proposals now received.”

Lotus signs key agreements to enable grid connection

The Power Implementation Agreement (PIA) and Power Supply Agreement (PSA) (collectively, the Agreements), provide for Lotus to finance, design and construct a new transmission line and substation infrastructure at Kayelekera.

Bittar states that on completion of construction and commissioning, Lotus will transfer ownership of the entirety of the line and substation infrastructure at Kayelekera to Escom.

The transmission line and substation infrastructure will connect Kayelekera to Escom’s Karonga substation and the Malawi power grid, enabling the supply and purchase of electricity to the mine through the PSA.

He reports that “the PSA is for a 10 year term, however, the Company may terminate earlier by giving at least 30 days prior notice with no penalty.”

Electricity tariffs are based on the tariffs set by the Malawi Energy Regulatory Authority (MERA) for local consumers.

Tender process completed, construction contracts being finalized  

 Lotus appointed ECG Engineering Pty Ltd (ECG) to manage the supply of power to the Kayelekera Project and ECG conducted a formal tender process involving:

• the extension of the existing Karonga Substation 66kV bus, installing a new 66kV line feeder bay and associated secondary systems;

• construction of approximately 45km of 66kV transmission line; and

• construction of a new Kayelekera Substation and associated systems, (together, the Powerline Project). Bittar explains that following tenders, the estimated cost for the Powerline Project is in line with the US$20.6 million estimated in the Accelerated Restart Plan 2.

He says: “This estimated cost excludes any potential battery energy storage system (BESS), which the Company estimates will cost circa US$4million. The Company is still reviewing the feasibility of the BESS as part of its power supply arrangements.”

“Whilst the Company continues to explore financing, including off balance sheet alternatives, for the power grid connection and potential battery system, the majority of the capital expenditure for the Powerline Project is expected to be spent once production has commenced at Kayelekera.”

The Environmental Social Management Plan (ESMP) for the transmission line and substations was approved by the Malawi Environmental Protection Authority (MEPA) in December 2024.

Bittar reports that Lotus will now work with ECG and ResourcesWA to finalise the design, construction and supply contracts and commence work to enable the connection to the power grid as soon as possible in 2026.

Binding offtake contract with PSEG Nuclear LLC

He says further to the ASX announcements dated 3 September 2024 and 29 January 2025 regarding the signing of non-binding and conditional term sheets for the offtake of 1.6M lbs in total for the 2026 – 2029 period, the Company has now reflected the term sheets in a binding and non-conditional “Contract for the Sale and Purchase of Natural Uranium Concentrates”.

PSEG Nuclear LLC is a subsidiary of Public Service Enterprise Group (PSEG), a publicly traded diversified energy company based in Newark, New Jersey. PSEG Nuclear LLC operates three nuclear generating units in southern New Jersey: Salem Generating Station Units 1 and 2, and the Hope Creek Generating Station. These facilities are located at the Artificial Island site on the Delaware River.

Lotus, which purchased the Kayelekera tenement from another Aussie firm Paladin Energy, renewed the mining licence for a further 15 years in 2021. The Company also signed a mining development agreement with the Malawi Government and a community development agreement with the local community as required by Malawi’s Mines and Minerals Act.

Leave a Comment

Comments