ASX-listed Lotus Resources has signed a mine development agreement (MDA) with the Malawi government for the Kayelekera uranium mine.

The company describes this as a major milestone in the mine’s redevelopment.

This agreement ensures the mine will operate under a stable fiscal regime and provides the necessary confidence to investors, the company avers.

The MDA guarantees a stability period of ten years during which the project will not be subject to any detrimental changes to the fiscal regime.

Key tax terms are aligned with the restart definitive feasibility study assumptions, including a royalty rate of 5% and a corporate tax rate of 30%.

Relief is provided on resource rental tax and withholding tax, specifically as it applies to dividends to non-residents.

There are exemptions for import and export duties, excise and value-added tax on capital goods and specified consumables directly related to mine production.

The MDA includes internationally recognised principles relating to legal protection on security of tenure, dispute resolution and expropriation.

The MDA demonstrates the commitment by the government to develop the local mining industry, a key pillar of Malawi 2063, its new economic vision, Lotus says.

“We are extremely pleased to have finalised our MDA with the Malawian government. I would like to thank all parties involved in these negotiations, especially the Presidential Delivery Unit who were instrumental in finalising the agreement. The relevant ministries including mining, finance and justice have all been very supportive in our negotiations as we have gone through multiple iterations of the MDA.

“It has been a timely conclusion to these negotiations as we have seen increased demand for the Kayelekera product from a number of utilities which coincides with the current perceived shortages and strong prices in the market. With the completion of the MDA, we can now move ahead quickly with concluding some of our offtake discussions,” says Lotus MD Keith Bowes.