Paladin sets things straight

Paladin Energy (PDN-T) felt it necessary to set the record straight.

Last week, an online media report from Malawi said a group of recently fired employees forced their way on to their former place of employment — Paladin’s Kayelekera Mine. The report alleged that the disgruntled former employees posed 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 last Thursday, although their chief complaint was with commercial banks in Malawi, who were withholding severance payments because of outstanding loans owed to the banks by some 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, and, Paladin says, at no time were the ex-employees 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 did go into lock-down mode as a precaution.

Police reinforcements were called in but didn’t end up being needed, according to the company, and 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 termination packages exceeded minimum requirements.

The cuts came despite production at the mine being up roughly 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 July of last year, when they fell below the US$50 per lb. mark. U3O8 has recently been trading for US$43.35 per lb.

Paladin shares were off as much as 8% last week when news of the incident was first released. But after clarifying matters from its point of view its stock recovered 6% to $1.17 per share.