Paladin: No threat in Malawi

Paladin Energy (PDN-T) had to set the record straight.

An online media report from Malawi said a group of recently fired employees forced their way onto Paladin’s Kayelekera mine, posing a threat to Paladin’s personnel and property.

On Feb. 11, however, Paladin issued its own statement. According to the company, a group of 32 former employees entered the site Feb. 7, although their chief complaint was with commercial banks in Malawi, who were withholding severance payments because of outstanding loans owed to the banks by ex-employees.

Paladin says its management team at Kayelekera met with the group, and after hearing their complaints, gave the disgruntled former employees letters for the banks “requesting sympathetic consideration of their situation.”

The group was then peacefully escorted from the site. Paladin says the ex-employees were at no time a threat to its personnel or property.

Given the sensitivity of uranium mines, the company also stressed that the group never tried to gain access to any secure areas, but that those areas were locked down as a precaution.

Police reinforcements were called in but the company says they weren’t needed and that there was no impact on the mining operation, as production continued as scheduled.

In late January, Paladin cut 110 national employees at the mine as part of company-wide cost saving measures. The company says the affected employees received all due entitlements and that termination packages exceeded minimum requirements.

The cuts came despite production at the mine spiking 21% last quarter. The increased production, however, didn’t make up for the negative effect of continued low prices for uranium, which Paladin blames for the mine operating at a loss.

Uranium prices have been trending lower since last July, when they fell below the US$50 per lb. mark, but have recently traded for US$43.35 per lb.

Paladin shares were off by as much as 8% last week after news of the incident. But since clarifying matters from its point of view, its stock has recovered 6% to $1.17 per share.