Lotus Resources (ASX:LOT) has signed a binding contract for the sale and purchase of natural uranium concentrates from the Kayelekera Uranium Project in Malawi, with North American power utility PSEG Nuclear.
PSEG Nuclear is a subsidiary of Public Services Enterprise Group (NYSE:PEG), which is a diversified energy company. PSEG Nuclear operates three nuclear generating units in southern New Jersey.
The contract involves the offtake of 1.6 million pounds of triuranium octoxide between 2026 and 2029 from Kayelekera.
Lotus, which has a market capitalisation of $389.83 million, says the Kayelekera Project is fully funded and is progressing as planned, with first uranium production scheduled for Q3 2025.
In conjunction, Lotus has also signed two agreements with the Electricity Supply Corporation of Malawi (ESCOM) to facilitate Kayelekera being connected to the power grid and supply electricity from the grid to the project.
The project is expected to be connected to the grid and have electricity supply sometime next year.
Under the power implementation and power supply agreements, Lotus will provide finance, design, and construction for a new transmission line and substation infrastructure at Kayelekera.
Upon completion, Lotus will transfer ownership of the entirety of the line and substation infrastructure at the project to ESCOM.
Lotus has appointed ECG Engineering to project manage the supply of power to Kayelekera and ECG conducted a formal tender process.
The process involved the extension of the existing Karonga Substation 66 kilovolt (kV) bus, installing a new 66kV line feeder bay and associated secondary systems, as well as constructing 45km of a 66kV transmission line and a new Kayelekera Substation and association systems.
Lotus notes the estimated cost for the Powerline Project is in line with the US$20.6 million ($33 million) estimated in the accelerated restart plan.
The company is still reviewing the feasibility of the battery energy storage system, as part of its power supply arrangements.
Managing Director Greg Bittar says this is another milestone towards optimising the Kayelekera Project.
“Together, these arrangements cover the design and construction of a new transmission line and substation infrastructure connecting the Kayelekera site to an upgraded substation in Karonga and the provision of electricity to the mine,” Bittar says.
Between 2009 and 2014, the Kayelekera Project produced 11 million pounds of triuranium octoxide before the asset was shut to preserve its longevity due to a sustained low uranium price.
According to Trading Economics, uranium futures were around US$64 per pound, which is the lowest in 18 months amid a continuous backdrop of sufficient supply against uncertain demand.
As of the time of writing, uranium’s spot price stood at US$64.35 per pound on 1 April 2025.
Write to Aaliyah Rogan at Mining.com.au
Images: Lotus Resources
