Government Must Come Clean: Release the Mining Agreement with Lotus Resources Now! – Rev. Maulidi

The Malawian government’s secretive handling of the Mining Development Agreement (MDA) with Australian mining giant Lotus Resources Limited is nothing short of scandalous. The All Africa Conference of Churches (AACC) Economic Justice & Accountability champion in Malawi, Rev. Baxton Maulidi, is demanding immediate public disclosure of the agreement to prevent history from repeating itself in the form of disastrous, exploitative tax incentives that robbed the nation during Paladin Africa’s tenure.

Rev. Maulidi, who also serves as the Church of Central Africa Presbyterian (CCAP) Blantyre Synod’s Deputy General Secretary, minced no words in his critique of the government’s opacity. He reminded authorities that the Paladin Africa deal of 2009 was riddled with flaws—flaws that were ruthlessly exposed by ActionAid Malawi in 2015, yet seem to have been completely ignored by those currently in power.

A Government That Refuses to Learn?

“It is shocking that the current administration blatantly disregarded ActionAid Malawi’s explicit recommendations to ensure mining agreements are subjected to public and parliamentary scrutiny before being signed. Why was the agreement with Lotus Resources signed in secret? And now that it has been sealed, why is it still being hidden from the public?” Rev. Maulidi challenged.

ActionAid Malawi’s report on Paladin Africa revealed a disturbing pattern of manipulated tax incentives. Paladin secured outrageously low tax rates and exemptions, effectively siphoning millions from Malawi’s coffers. The so-called ‘royalty rate’—a one-off payment for extracting uranium—was slashed from the standard 5% of sales to a measly 1.5% for the first three years, later increased to just 3%. The direct financial loss to Malawi? A staggering US$15.6 million.

A Playbook of Exploitation

But Paladin’s tax dodging didn’t stop there. The company exploited Malawi’s tax treaty with the Netherlands, routing payments through a Dutch subsidiary that had zero employees, allowing them to escape withholding taxes on interest payments and management fees. The result? A scandalous US$27.5 million loss in just six years, bringing the total damage inflicted on Malawi to more than US$43 million.

“The government must not allow Lotus Resources to play the same tricks,” Rev. Maulidi warned. “Another Australian company, another secret deal—are we really expected to believe this is in Malawi’s best interest?”

The opacity surrounding the Lotus Resources agreement becomes even more suspect when one considers the web of transactions leading up to it. Paladin offloaded 65% of its stake in Kayelekera to Lily Resources, which later sold its 20% stake to Lotus Resources. The government still holds a meager 15% stake—raising serious concerns over who truly benefits from this deal.

Malawi Deserves Transparency and Accountability

Rev. Maulidi demands full disclosure of the agreement, echoing ActionAid Malawi’s call for all mining contracts and tax incentives to be made public and subjected to expert analysis, parliamentary oversight, and scrutiny from civil society organizations (CSOs).

ActionAid’s recommendations were clear:

• The government must never again reduce royalty rates for multinational companies as a tax incentive.
• Companies must not be allowed to exploit capital structures to minimize tax obligations.
• Cost-benefit analyses of these agreements must be made public and periodically updated.
• The government must disclose revenue losses from tax incentives annually.

This secrecy and reckless deal-making have not gone unnoticed by economic experts. Don Consultancy Group’s Chief Economist, Chifipa Mhango, lambasted the government for handling negotiations without the necessary expertise. “Negotiating a mining deal requires industry-specific knowledge, strong business acumen, and an understanding of global trends. Yet, we only saw the involvement of the Minister of Finance, Minister of Mining, and Attorney General Thabo Chakaka Nyirenda—where were the independent experts?” Mhango asked.

To make matters worse, the only stakeholders consulted after the deal was signed were traditional leaders in Karonga, led by Paramount Chief Kyungu, who agreed to a Community Development Agreement that did not represent Malawi’s national interest.

The People Demand Answers

The government must act now. The people of Malawi will not accept another exploitative mining deal signed behind closed doors. The Lotus Resources agreement must be released immediately for scrutiny. Transparency is not a privilege—it is a right!

Will the government heed this call, or will it continue down the path of secrecy, corruption, and economic sabotage? The nation is watching.

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