Paladin Africa Limited (PAL) on Friday retrenched 138 workers at Kayelekera Uranium Mine, a statement released by the company said.

The statement, signed by general manager Greg Walker, said the move responds to continued plummeting of uranium prices from $50 (about K17 000) per lb in June 2012 to $42.25 (about K14 000)currently.

“Following a review of manning levels at its operation, PAL is now reducing its Malawi national workforce by 18 percent from 613 people employed to 503. Expatriate positions are also being reduced by 24 percent from 118 to 90.

“The company has undertaken various measures to reduce costs at Kayelekera other than workforce reduction, but it has reached the stage where this measure is no longer avoidable,” reads part of the statement.

It further indicates that Paladin has advised the Ministry of Labour and Kayelekera Local Staff Association of the development.

Ministry of Labour was not immediately available for comment, but executive director for Institute for Policy Interaction (IPI) Rafiq Hajat, who is one of the country’s critical voices on mining, said he was dismayed at the news, but was quick to add the country needs to review its contract with Paladin.

“We need to carefully review the contents of the agreement and subsequent negotiations we had in 2008 so that the deal is in interest of both Paladin and Malawians.

“Otherwise, whether the global uranium prices really plunges or it’s just a ploy to instil fear in us, we won’t get the truth unless the review happens,” said Hajat.

Secretary general for Malawi Congress Trade Union (MCTU), Pontius Kalichero, said the union’s principal concern is the procedure of the retrenchment.

“We want to believe that those retrenched will be paid a fair package according to the Employment Act so that they are fairly sent home,” he said.

PAL said the retrenchment has been done in accordance with Malawi’s Labour Law and international labour regulations to mitigate the effects of the decision on the employees.

“Among others, the employees will be paid up to the end of this month [January]; one month’s salary in lieu of notice – for the month of February which will include the value of benefits [such as meals and accommodation] as applicable to the employees concerned; severance benefit calculated at two weeks’ salary for each completed year of service which will include the value of benefits as defined by Malawi Law; the value of any leave credits that they have at the time of retrenchment and an ex gratia amount of an extra one month’s pay on completion of an exit medical examination,” reads the statement.

Paladin has also cut employment at its Langer Heinrich Mine in Namibia by 20 percent and made similar reductions in its Australian head office.