Lotus Resources Signs $20.6 Million Power Deal with ESCOM to Energize Kayelekera Uranium Mine

Lotus Resources Limited has signed a 10-year, US$20.6 million power supply agreement with the Electricity Supply Corporation of Malawi (ESCOM) to upgrade grid infrastructure and connect the Kayelekera uranium mine in Karonga to the national electricity grid.

According to Energy Capital Power, the agreement includes the construction of a 45-kilometre transmission line, a substation, and a US$4 million battery energy storage facility to be integrated into the grid in the future. The mine is expected to become fully operational in the third quarter of 2025.

In addition to the ESCOM deal, the Australian mining company has secured a major contract with North American utility PSEG Nuclear for the sale and purchase of 1.6 million pounds of U3O8 natural uranium concentrate from Kayelekera, covering the years 2026 to 2029.

Lotus is working with engineering firms ECG Engineering and ResourcesWA and has reportedly completed the tender process for the ESCOM grid connection and substation works.

However, despite these promising developments, concerns remain over Malawi’s low 15% stake in the Kayelekera Mine. Speaking in Parliament on Friday, legislator Mark Bottoman questioned whether the country is truly benefiting from its mineral wealth.

In response, Minister of Mining Ken Zikhale Ng’oma admitted that the government has made significant mistakes in past mining development agreements with foreign investors.

Quoted by The Sunday Times, Ng’oma confessed that many deals were signed without proper due diligence and that Malawi has seen “minimal benefits” from its vast mineral resources due to poor decision-making, weak policies, and rushed contracts.

“Malawi is where it is now with the mining sector because of the mistakes we have made,” Ng’oma said. “We’ve made strategic, economic, and contractual mistakes. Our Ministry has suffered from poor funding, weak policy frameworks, and limited geological knowledge. As a result, outsiders have gained more from our minerals than Malawians themselves.”

He added that the legal and regulatory loopholes exploited by foreign companies have led to unfavorable deals, where profits have largely flowed out of the country.

In response to these shortcomings, the government has begun implementing reforms in the sector. In February, the Ministry of Mining suspended the issuance of new licences and placed a temporary ban on mineral exports as part of efforts to review and clean up the industry.

Meanwhile, financial news outlet Finimize described Lotus’s uranium contract with the North American utility as a “landmark deal,” involving the supply of 600,000 pounds of uranium over four years beginning in 2026. The agreement, denominated in US dollars and tied to long-term market prices, is expected to offer financial stability for both parties.

Despite the positive outlook, Lotus Resources’ stock recently dropped by 12%, its lowest point since mid-2021. Analysts suggest this may reflect broader market anxiety over uranium demand or investor sentiment, though the company is reportedly seeking additional contracts to strengthen its market position.

As global interest in clean energy intensifies, nuclear power is regaining traction — and with it, demand for uranium. Lotus’s strategic push into long-term utility contracts signals confidence in the growing role of nuclear energy, potentially reshaping global market trends.

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