Mining & Trade News

By Tione Luwanga

In August 2024 Globe Metals and Mining (Africa) Limited became the first mining company in Malawi to comply and implement the Community Development Agreement (CDA) with the qualified communities that surround the Kanika Niobium Project since the new Mines and Minerals Act 2023 came into being.

Section 169 subsection 1 of the Act stipulates that “a holder of a large-scale mining licence shall assist in the development of qualified communities affected by its operations to promote sustainable development, enhance the general welfare of the quality of life of the inhabitants and shall recognise and respect the rights, customs and traditions of the local communities that are consistent with the constitution.”

Subsection 3 adds that no holder of large-scale mining licence shall proceed to do commercial production before the ratification of the CDA by the qualified affected community.

Chief Mining Engineer in the Ministry of Mining, George Maneya said the historic ceremony demonstrates that the Ministry of Mining is ticking. 

He said: “This is historic. This is in line with the current laws in the Mining Act. The CDA signing will now bring confidence to the community that this project will benefit them. It will also work as a reference point when one party has issues over the project.”

Maneya added that after the signing, the documents will have to go back to the Ministry for final approval.

In his speech, Paramount Chief Inkosi ya Makhosi M’mbelwa V said what was delaying the compensations was the CDA and now that it has been signed, the process should not take ages.

“The CDA is one of the factors that the investors were looking for and now that we have signed, I was reminding the Globe Metals Officials that they should expedite the process because the affected community has been deprived of much needed development because they know that their land has been designated for the mining project,” said M’mbelwa

Globe Metals and Mining Chairperson, Macleod Nyirongo, said the assessment is the company’s priority.

“The signing is a flagship which is saying the community has agreed and so Globe will go to the next step and the next step is to have an assessment. What do people have? Those people who are directly affected by the project. What is the value of the assets that they have? What are they going to be compensated for, so that they can continue with their lives?” narrated Nyirongo.

Nyirongo said following the assessment, the company will develop an engagement plan involving people around Kanyika mine area.  

“We need to prepare an engagement plan to ensure that people understand Globe’s actions are planned and predictable,” said Nyirongo.

Central to the CDA is the management of the 0.45% of gross revenue which will be remitted back to the community as part of Corporate Social Responsibility (CSR), according to the law.

To comply with this, Globe Metals has put a landmark of 0.45 percent to which Senior Chief Mabilabo said is not bad.

“Pasono pano tawapulikiska wa mgodi kuti ka wakwamba waka kwene tili kukamba nawo wa kuti pala vinthu vayamba Kwenda makola mbwenu wazakakwezgeko ndalama iyi panji kufika pa 1 percent, apo mbwe vinthu vikwenda makola. (Currently we have agreed with the 0.45 percent because the company is just starting but we have spoken to them already to consider increasing the amount if the company starts making tangible profits),” he said.

He added that a Board of Trustees, including Trustees from the Northern and Central Regions as well as the Kanyika District, has been established and mandated to handle the resources according to the needs of the community.

Affected District Councils were represented by respective District Commissioners; Rodney Simwaka of Mzimba District council and James Kanyangalazi of Kasungu who signed as witnesses.  

Speaking prior to the event, Simwaka said the two councils’ responsibility will be to monitor the seamless implementation of the CDA.

Government has already given Globe Metals the go-ahead to start the mining operations through the provision of the mining licence in 2021 and approving the Mining Development Agreement (MDA) in March 2023.

The signing ceremony was supposed to take place on June 10, 2024 but was postponed due to the tragic death of the country’s former vice president Dr Saulos Klaus Chilima.

Once in operation the Kanyika Niobium Project, with its large deposit of niobium, tantalum and zircon will be the first such mine in Africa as well as the fourth largest Niobium mine in the world, and has an estimated lifespan of about 25 years.

Niobium is used for high-tech technologies like aerospace, metal, atomic energy and electronics industries. It is also used in the medical field, optical, lighting and chemical industries. 

Globe Metals plans to build the refinery plant in Lilongwe.

ASX-listed DY6 Metals reports outstanding progress in Malawi mineral exploration projects

By Marcel Chimwala

ASX-listed DY6 Metals has reported outstanding progress in its exploration for various minerals including Rare Earth Elements (REEs), Niobium (Nb), Platinum Group Elements (PGEs) and lithium in Malawi.

DY6 is conducting exploration works in a number of its licence areas in Malawi including Tundulu in Phalombe where it is prospecting for REEs.

Tundulu REE project update

The Company’s Chairman Daniel Smith says in a Press Statement that DY6 has collected 63 metallurgical samples from 37 sample locations along the high-grade historic trench (TUTR10) in the newly granted Tundulu tenement.

The sampling is intended to be representative of the mineralised Bastnaesite and Apatite carbonatite rock types exposed within the trench. Historical results from TUTR10 returned average grades of 7.1% P2O5 and 1.8% Total Rare Earth Ore (TREO) across 83m.

Smith reports that each of the samples will be analysed separately with a portable X-ray Fluorescence (XRF) onsite at DY6’s drill core warehouse prior to dispatch to SGS Laboratories in Perth and South Africa.

He says five bioavailability samples were also taken across various trenches, targeting phosphate rich rocks with P2O5 greater than 15%.

“Bioavailability is used for analysis on phosphorous rock sources to determine the solubility of phosphate in soils. This analysis is useful in determining whether a particular phosphate rock type is suitable for direct fertiliser applications where the phosphate would be applied directly to the soil for uptake,” Smith says.

Tundulu is formed of several hills in a ring around a central vent called Nathace Hill where the majority of the historic surface sampling and drilling was undertaken. The predominant geology at Nathace Hill is REE apatite hosting carbonatites and feldspathic breccia and comprises a large inner agglomerate vent. Mineral rich carbonatite also occurs at Tundulu Hill east of Nathace and Makhanga Hill west of Nathace and is previously unexplored and prospective for REEs and niobium mineralisation.

REE mineralisation remains open towards southern and western directions of Nathace Hill and potentially extends beyond the boundaries of the previously established mineralised area over Tundulu Hill. Initial indications of mineralisation appear to be high in valuable MREEs and low measurable radioactive uranium (U) and thorium (Th). This compares favourably to Lynas Rare Earths’ Mount Weld Central Lanthanide Deposit in Western Australia where Th and U concentrations in the ore are approximately 660 ppm and 25 ppm respectively.

Meanwhile, DY6 has engaged Perth-based consulting metallurgists Met Chem Consulting for initial metallurgical evaluation to review historical testwork work programs and assess the findings from the 2017 metallurgical report, completed by the previous operators of the licence. Met Chem Consulting has 20 years' experience and has overseen beneficiation testwork and pilot programs for many ASX-listed companies and overseas rare earths projects.

“The testwork by DY6 will initially focus on validating the beneficiation results achieved by the previous laboratory. Conducting test work at this early stage enables the Company to ascertain the preliminary viability of producing two product streams; a REE commercially saleable concentrate and a mixed phosphate concentrate containing rare earths,” says Smith.

Machinga Rare Earth and Niobium Project

DY6 is also prospecting for REEs and Niobium in its Machinga tenement. Smith reports in the Company’s quarterly report for the quarter ended June 30, 2024 that during the quarter, the Company reported the receipt of assay results for its second comprehensive reconnaissance rock chip and soil sampling program completed at Machinga Main Licence Area Anomaly.

Significant rock chip samples include:

• 2.26% TREO, 0.19% Nb2O5 (MEX061)

• 1.60% TREO, 0.60% Nb2O5 (MEX098)

• 3.22% TREO, 0.75% Nb2O5 (MEX141)

• 1.00% TREO, 0.11% Nb2O5 (MEX270)

• 1.16% TREO, 0.41% Nb2O5 (MEX510)

Smith says: “The results indicate multiple parallel zones consistent with the drilling results. The area of drilling and to the southeast tend to show patchy results due to extensive soil cover derived from up slope to the west, but clearly anomalism is not being dispersed.”

“The two western anomalies where sample density is higher show a much more continuous character of greater TREO results, highlighting the scale potential of REE mineralisation in this area of the licence. This zone was only partially tested by the first phase of drilling as no drilling was completed west of the main road.”

“The extension of this trend is highly significant as this is within the Forestry Reserve, where DY6 has a forestry permit, and not within farming activities, allowing for future exploration activities west of the highway.”

Ngala Hill PGE Project

DY6 is also conducting exploration at Ngala Hill Platinum Group Elements (PGE) prospect in southern Malawi. Smith explains in the report that during the quarter, DY6 was in the process of commencing a reconnaissance program at the highly prospective PGE project.

“The Company has since commenced engagement with local community members at the project site with the purpose to facilitate awareness of the exploration program planned,” he says.

DY6 will commence a reconnaissance mapping and rock chip sampling program to validate and potentially expand the significant area of interest at Ngala Hill.

Salambidwe and Mzimba

DY6 is also proceeding with exploration for REEs at Salambidwe in Chikwawa and prospecting for lithium in the Mzimba central licence area which has just been formally granted by the Mines Department. DY6’s other remaining lithium exploration licence applications awaiting grant are Mzimba West, Mzimba South and Karonga North.

By Tawonga Nyirenda Mayuni

Investors from Morocco have expressed interest to produce fertilizer in the country using the Tundulu rock phosphate in Phalombe.

Public Relations Officer for the Ministry of Mining Tibonge Kampondeni told Mining and Trade Review that the Ministry in conjunction with the Ministry of Agriculture and the OCP group of Morocco have plans to conduct further investigations of the rock phosphate deposits of Malawi starting with Tundulu Rock Phosphate.

“The Ministry in conjunction with the Ministry of Agriculture and the OCP Africa group has plans of conducting investigations of the rock phosphate deposits in Malawi starting with the Tundulu rock phosphate with an aim of establishing a manufacturing plant for the OCP’s Nitrogen Phosphorus, Sulfur and Boron (NPSB) fertilizer in Malawi as soon as possible,” she said

Kampondeni explained that currently the Ministry of Agriculture and the OCP group intends to start crop trials using the NPSB fertilizer which is currently manufactured outside Malawi so that it can be introduced into Malawi.

Commenting on why Malawi keeps importing fertilizer when the country has deposits that can be exploited to manufacture fertilizer, Kampondeni said that the government relies on the private sector to invest and the Ministry is ready to work with them.

Kampondeni mentioned that the data that the country has is sufficient enough to kick-start the production of fertilizer locally.

She said: “We have various agro-mineral deposits like phosphate, gypsum, vermiculite, limestone, nepheline syenites and feldspars in many parts of the country.”

“Some of these have been studied in detail, for example the Tundulu phosphate deposits in Phalome and the Mlindi Ultra-phosphate in Neno.”

Kampondeni also said the government of Malawi is currently intensifying exploration to identify additional deposits of agro-minerals and estimate the quantity of the resources.

However, Kampondeni said that funding challenges are negatively affecting exploration activities such that the Ministry is working on mobilizing funding from development partners and research funding schemes.

“For example, the Ministry and the University of Kyoto in Japan have submitted a project concept entitled ‘Integrated use of agro-minerals, dry excreta and drone technologies in soil remineralization for crop production and climate smart agriculture in Malawi’ to the Japanese government under the Science and Technology Research Partnership for Sustainable Development (SATREPS) funding scheme,” she said.

Meanwhile, the Malawi government has put in place some incentives for attracting investors in agro minerals for local fertilizer production.

Kampomdeni explained that the incentives for large scale investors include; 100% capital allowance, duty free importation of equipment, Zero input VAT, accelerated depreciation because if the value capital remains high it reduces the income, loss carry-over for 10 years, and provision of concessions on consumables that are directly inputting into the production like chemicals and reagents.

OCP Africa is a subsidiary of OCP group, a leading producer of phosphoric acid and fertilizer. The group has been in the industry for over 100 years. The headquarters of OCP Africa is in Casablanca, Morocco.

By Marcel Chimwala

ASX-listed Sovereign Metals has announced that the excavation of a test pit, using dry mining methods, has been completed successfully. The excavation is part of the ongoing Pilot Mining and Land Rehabilitation Program at the Company’s Kasiya Rutile-Graphite Project in Lilongwe, Malawi.

Sovereign Metals MD Frank Eagar explains that the completion of this phase of the Pilot Program confirms that Kasiya can be efficiently mined using standard mobile excavators and trucks, further demonstrating operational alternatives as part of the ongoing Pre-Feasibility Optimisation Study.

The test pit has been excavated as planned with all work on schedule to a depth of 20 metres, handling approximately 170,000 bench cubic metres. Steady-state operations envisage 24 million tonnes of material being mined annually. The excavatedmaterial is being stockpiled on site and as part of the next phase of testwork will be separated into various size fractions through the use of cyclones. Once separated into different size fractions, the material will be backfilled into the test pit for materials deposition testwork.

For the test pit, the excavation was completed with a dry mining fleet consisting of four excavators, 20 trucks and a support fleet including two bulldozers and a motor grader.

Eagar says: “Completion of the test pit at this scale marks a significant achievement. The mining, hydrology and geotechnical data collected throughout is invaluable in our understanding of the orebody and the simplicity of a potential dry-mining operation at Kasiya. We now look forward to the next steps of the pilot phase including the hydraulic mining trial, cyclone separation of ore, backfilling of test pits and soil rehabilitation.”

Eagar explains that the saprolite-hosted mineralisation at Kasiya is largely homogenous and has relatively consistent physical properties throughout the 1.8 billion tonnes Mineral Resource Estimate.

“Data collected from the pilot phase confirmed that no drilling, blasting, crushing, grinding or milling will be required prior to stockpiling material for processing into rutile and graphite products; an indication of potentially lower mining costs and a lower carbon footprint comparable to hard rock deposits,” he says.

Eagar reports that hydraulic mining trials will begin in coming weeks. A temporary water storage pond has been constructed and sealed using natural clay from excavated material, minimising the use of conventional plastic lining. The pond is being filled by eight boreholes delivering water to site and is nearing its capacity of six million litres. Water from the storage pond will initially be used for the hydraulic mining stage.

He says the main pit will be backfilled with dry material, while material from hydraulic mining will be used to fill rehabilitation pits as part of the rehabilitation phase of the trial.

Background to the Pilot Phase

The Pilot Phase is a critical part of Kasiya’s optimisation study and ongoing feasibility work; empirical data generated from the Pilot Phase will determine optimal project excavation, material handling, processing, backfilling and rehabilitation approaches. The Pilot Phase is being undertaken on a 9.9-hectare site and includes the following activities:

1. Test Pit: A test pit of 120m by 110m excavated to a depth of 20m, allowing optimisation of hydraulic and dry mining excavation methods.

2. Stockpiles: The excavated material will be temporarily stored in 4 stockpiles, namely all dry mining material, wet slimes (in a pond) and two sizes of sand fractions from the hydraulic mining.

3. Backfilling and Grading: The material will be placed back into the pit, and all areas will be graded.

4. Rehabilitation Demonstration: Sovereign will construct eight small rehabilitation demonstration pits covering a combined area of 100m by 130m. These will be used for water storage, excavated material storage, and demonstration of multiple land rehabilitation approaches.

5. Temporary Laydown Areas: Four areas will be used as temporary laydown areas, offices, and associated infrastructure.

6. Communication: The Pilot Phase will be an educational opportunity for Project stakeholders. Sovereign will undertake a series of stakeholder visits and consultations for this purpose.

Eagar explains: “Sovereign’s objective is to restore land after mining to conditions that achieve the same or better agricultural yields than existing land uses and crop yields. The Pilot Phase will demonstrate to local communities the successful rehabilitation of land for agricultural use post-mining; land rehabilitation will form an integral component of the ongoing optimisation study.”

“Results of this Pilot Program will also allow Sovereign to determine optimal excavation and backfill approaches, providing critical information for the upcoming Definitive Feasibility Study.”

By Marcel Chimwala

ASX-listed Lotus Resources has announced that it has signed a Mine Development Agreement (MDA) with the Government of Malawi (GoM), for its Kayelekera uranium mine, a major milestone in its redevelopment.

Lotus CEO Keith Bowes says the Agreement ensures that the mine will operate under a stable fiscal regime and provides the necessary confidence to investors.

Bowes explains that the MDA guarantees a Stability Period of 10 years during which the Project will not be subject to any detrimental changes to the fiscal regime.

He says the MDA’s key tax terms are aligned with the Kayelekera Restart Definitive Feasibility Study (DFS) assumptions, including royalty rate of 5% and corporate tax rate of 30%.

“There is also relief provided on Resource Rental Tax and Withholding Tax, specifically as it applies to dividends to non-residents,” he says.

The MDA also provides exemptions for import and export duties, plus excise and Value Added Tax (VAT) on capital goods and specified consumables directly related to mine production.

Bowes adds that the MDA includes internationally recognised principles relating to legal protection on security of tenure, dispute resolution and expropriation.

“MDA demonstrates the commitment by the GoM to develop the local mining industry, a key pillar of Malawi 2063, their new economic vision,” he says.

Bowes also points out that Rio Tinto’s increased shareholding in Sovereign Metals, which holds another key mining project in Malawi, indicates the increased attractiveness of Malawi as a mining destination.

He 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.”

MDA key terms

The MDA specifies key fiscal terms, legal protections and non-fiscal government support under which Lotus will develop and operate Kayelekera. Lotus has benchmarked comparable fiscal regimes elsewhere in informing its MDA discussions with the GoM.

The MDA is aligned with current Malawi legislation. Key terms agreed include:

• A stability period of 10 years from date of execution during which the Project will not be subject to any detrimental changes to the fiscal regime

• Royalty rate of 5% and the corporate tax rate of 30%

• Tax losses from acquisition are included, with protection from disputes on tax refunds through the principle of tax set-off. The agreement also includes ability to restructure historical loans and tax losses on a tax neutral basis

• Malawi’s currently legislated Resources Rent Tax (RRT), which is not fit for purpose, does not apply. Instead, the GoM proposes to consider an alternate supernormal profits tax (that may consist of a sliding scale linked to uranium price) to replace the current RRT. The Company will receive a waiver until such time as this is effective.

• Exemptions for import and export duties, excise and VAT on capital goods and on specified consumable items directly related to mine production

• Withholding Tax relief (currently 10% for a mining company) on dividends to Lotus for the majority of the mine life

• The maintenance of foreign currency bank accounts inside and outside Malawi that are supportive of project financier requirements

• A Community Development Agreement with a minimum value of 0.45% of project revenue set aside for community projects

• Specific legal protection is afforded to the Company, including Security of tenure, Dispute Resolution and Arbitration and non-discrimination

Engagement with Government of Malawi

Lotus’s negotiations with the GoM were based on the concept of a fair and equitable split of economic benefits for investors that meets the project financing needs, delivers an economically viable project and provides the necessary benefits to the local communities, the Malawian people and the GoM.

Consideration has been given to not only fiscal items such as taxes and royalties but also economic benefits including jobs, business development, local procurement and supporting local businesses and communities.

Next steps

Bowes states that the company’s current priorities include to complete offtake negotiations for the first phase of contracting with offtake agreements likely to have a pre-payment component to support project financing, complete the front-end engineering design program and finalise project financing.

He explains that Lotus’s debt advisor, Orimco, has identified potential financiers to assist in the project financing while Independent Technical, Environmental and Legal reviews are planned prior to receiving credit approved proposals.

Lotus is also expected to complete negotiations and sign a Power Supply and Power Implementation Agreement with Malawi’s electricity utility Electricity Supply Corporation of Malawi (ESCOM).

By Marcel Chimwala

Lancaster Exploration, a 100% owned subsidiary of TSX.V and AIM listed Mkango Resources, has signed a Mining Development Agreement (MDA) for the Songwe Hill Rare Earths Project in Phalombe with the Malawi Government.

The signing ceremony was held at the Office of the President and Cabinet in Lilongwe, Malawi during the evening of Friday July 26th, 2024.

Hon. Minister Monica Chang’anamuno MP, Minister of Mining for Malawi stated

“The signing of the MDA marks a momentous and significant occasion in the history of Malawi's mining sector. It is with great pride and optimism that we sign the MDA between the Government of Malawi and Lancaster Exploration Limited (Mkango) paving the way to start mining Rare Earths at Songwe Hill in Phalombe.  The MDA signed by the Government of Malawi is a product of almost two years of hard work. I would like to thank the team at Mkango for their positive partnership spirit during the negotiation period. This Agreement is not just a contractual obligation; it symbolizes a renewed partnership, a commitment to sustainable development, and a shared vision for a prosperous future for both parties. The journey to this has been marked by diligent negotiations, mutual respect, and a deep understanding of the potential that lies beneath our feet. The conclusion and signing of this MDA is a testament to what can be achieved when we work together with a common purpose. It will ensure that the benefits of our mineral wealth are shared equitably and that our environmental and social responsibilities are upheld. The MDA we have signed today is a win-win agreement and is based on the belief that Government, the mining investor and Malawians share some fundamental interests of benefitting from these future mining activities. On behalf of the Malawi Government I would like to take this opportunity to assure the investors that the Government will adhere to its obligations reflected in this MDA.  I would like to reiterate Government’s commitment in ensuring that it provides requisite infrastructure to support the mining activities at Songwe Hill and the country in general. The future mining operations at Songwe Hill in Phalombe will have far-reaching impacts on our economy. As we are all aware mining represents the hopes and dreams of the Malawian people for economic growth, wealth and job creation in line with Vision 2063 and the Agriculture, Tourism and Mining (ATM) Strategy championed by His Excellency the President Dr Lazarus McCarthy Chakwera.  To the management team at Lancaster Exploration Limited (Mkango) I would like to thank you for your unwavering commitment to Malawi. Together, we are not just signing an agreement; we are embarking on a journey towards a brighter, more prosperous future for Malawi. Let this be a shining example of what can be achieved through partnership, perseverance, and a shared vision for a better tomorrow.”

Alexander Lemon, President of Mkango stated: “We are very pleased to announce this major milestone for the Company and the nation of Malawi. I am delighted that the MDA has been agreed and signed with the Government of Malawi. The Project when developed, is expected to be a game changer and transformational for  Malawi and Mkango welcomes the very strong support it is receiving from the Government of Malawi and all stakeholders. When developed, my hope is that Songwe Hill will catalyse a new industrial revolution in Malawi, creating employment opportunities ,producing high value-added exports, as well as further unlocking Malawi’s mineral potential and new infrastructure developments.”

Songwe is one of the very few rare earths projects globally to have completed a definitive feasibility study and hold a signed and approved Environmental, Social, Health Impact Assessment (“ESHIA”), which was completed in compliance with IFC Performance Standards and The Global Industry Standard for Tailings Management (2020) (“GISTM”) adopted for design and management of the tailings storage facility. The key rare earths being targeted at Songwe are neodymium, praseodymium, dysprosium and terbium which are all critical for the green transition and are essential to permanent magnets for electric vehicles, wind turbines and many electronic devices.

Key components of the MDA include:

➢ 5% royalty of gross revenue

➢ 30% corporate tax rate

➢ 10% non-diluting equity Interest in the Project to Malawi Government

➢ Exemption from customs and excise duties – Lancaster will be exempted from Export Duty, Import Duty,

Import Excise and Import VAT on imports and exports of capital goods as provided in the applicable law

➢ 10 years stability period

➢ 10 years Tax loss carry forward

➢ Community Development Expenditure is an allowable tax deduction

The key rare earths being targeted at Songwe are neodymium, praseodymium, dysprosium and terbium which are all critical for the green transition and are essential to permanent magnets for electric vehicles, wind turbines and many electronic devices. Rare earth elements are critical enablers of clean energy and electro-mobility. They are used in a wide range of applications that have transformed modern society, and due to their unique physical and chemical properties, are exceptionally challenging to duplicate or replace.

UK and Canadian listed Mkango has been conducting detailed geological exploration and feasibility study work since 2010 at Songwe Hill in Phalombe and invested over US$35million to date

 The Company works closely with the local communities and prioritizes employing both skilled and non-skilled workers from the community, and carries out a number of corporate social responsibility projects in different areas including education, health, agriculture and infrastructure development.

By Tawonga Nyirenda Mayuni

Malawi coal miners are struggling to meet the local demand from the consuming industries despite the country hosting millions of tonnes of the resource. 

The development has seen major coal consuming industries such as cement manufacturing struggling to import coal from Mozambique amid the current foreign exchange shortages.

Chairman for Cement Products Aslam Gaffar said his plant has run out of coal and the mines in Malawi, located in the Northern Region are failing to supply.

“We may have to stop our cement plant indefinitely as we try to get coal,” said Gaffar, whose company has a clinker plant and cement mill in Njereza, Mangochi with a limestone mine in nearby Maera Village.

Shayona Cement Company, which runs a clinker plant and grinding mill in Kasungu, is also reportedly struggling to import coal from Mozambique for its operations with the local market in deficit.

Speaking to Mining and Trade Review. Acting Mine Manager for Mchenga Coal Mine in Rumphi Assan Tembo said that they are having problems with their production as the company is falling short on equipment that accelerates production.

Tembo said: “We need to use the conveyer belt and other equipment to increase production, but at the moment we are using wheelbarrows which is slowing down production, so expect to bring in the equipment and production will double by the end of July.”  

Tembo said that the company is aiming at increasing production by not only mobilizing additional equipment but also opening other ore sites.

Commenting on the issue in a separate interview, MD for Chombe Coal Mine Bruno Klose said despite the market deficit, his company is producing at normal volumes.

Klose said that it is not strange for companies in Malawi to import coal from Mozambique as they have always done that despite Malawi having a lot of coal.                                                                                       

By Marcel Chimwala

Mining & Trade Review has clocked 15 years in news publishing. Despite the newspaper playing a major role in creating awareness on mining issues, our analysis indicates that Malawi’s minerals sector is dogged by a host of challenges that are obstructing growth of the potential sector whose contribution to gross domestic product (GDP) remains rooted at a staggering one percent.

The challenges that Mining & Trade Review has reported over the years range from delays by the Government to sign Mine Development Agreements (MDAs) with foreign mining investors; slow pace is issuing mineral licenses; political interference; lack of necessary infrastructure for development of mining projects; lack of access to financing for medium scale and artisanal and small scale miners (ASMs); slow pace in formalising ASMs and market hiccups for local producers including cement manufacturers.

Delays in signing MDAs

In 2009 when the first issue of the then Mining Review which later rebranded to Mining & Trade Review was published, Malawi saw Kayelekera Uranium Mine in Karonga coming into production as the first ever large scale mine in the country. ASX-listed Paladin Energy through its local subsidiary Paladin Africa operated the mine with the Malawi Government as a minority shareholder with 15% shareholding. Unlucky for Malawi, the mine was put on care and maintenance in 2014 to preserve its longevity due to sustained low uranium prices in the wake of the Fukushima Nuclear Disaster in Japan which resulted in the closure of some nuclear plants in so doing negatively impacting on the market demand for the yellow cake.

With production halted at Kayelekera, Malawi is left without a large scale mine in operation despite hosting proven mineral deposits that can support large scale mining operations. Over the last 15 years, the Government has only concluded MDA negotiations for the Kanyika Niobium Mining Project in Mzimba.

The Malawi Government is for some years now continuing negotiations for MDAs with ASX-listed Lotus Resources to resume mining at Kayelekera and Mkango Resources to start rare earth production at Songwe Hill in Phalombe.

Analysts say these delays in finalising MDAs are a major stumbling block to the growth of the minerals sector in Malawi.

But Government says it is not concluding the MDAs with the two companies because they are seeking tax incentives unlike Globe Metals.

Minister of Mining Monica Chang’anamuno said: “The process has taken a bit longer as the Government is ensuring that the agreements favour and benefit Malawians and that they are not raw deals like some agreements before.

 “For your information Government does not want to rush into signing an agreement that would hurt Malawians and the economy of the country.”

“However, as government we are determined to conclude the negotiations as soon as we reach a win-win situation.”

But Coordinator for Chamber of Mines and Energy Grain Malunga backed the companies in seeking tax incentives.

Writing in his Technical File column in Mining & Trade Review, Malunga said:  “It should be emphasized that investment incentives that are granted in projects with marginal profits can go a long way in building history of mining through attracting more mining investment.”

“It is not enough to talk about investment subsidy or governments losing potential revenue through tax incentives without understanding mining project risks.”

“In order to believe that government negotiates in good faith for the benefit of its citizens, there is need to be transparent in all contract dealings.”

Delays in issuing mineral licenses

Players in the sector have also complained about delays by the government in issuing various mineral licenses and permits.

Speaking on behalf of private resource firms during this year’s Malawi Investment Forum in Lilongwe, Chairman of leading mining and mineral consulting group Akatswiri Holdings Hilton Banda urged State President Lazarus Chakwera to ensure that bureaucratic procedures for acquiring licenses and signing agreements are simplified in order to do away with delays of mining projects.

“This is a young sector, and its challenges are enormous, and therefore, we will continue to count on Government’s support to realise the full potential of this most promising sector,” said Banda, hinting that with the current projects’ projection, mining will be contributing 10% to GDP by 2030 if challenges in the sector are addressed.

Political interference

Over the years, Mining & Trade Review has also unearthed acts of political interference in the sector. Chief among the issues is the recent review of the Mines and Minerals Act 2019 to replace it with the 2023 Act.

Our investigations revealed that politicians bulldozed the Bill to formulate this new Act without consulting key stakeholders including the Chamber of Mines and Energy in Malawi (CMEM), Civil Society Organizations (CSOs) and Artisanal and Small Scale Mining (ASM) groups.

Malunga confirmed in an interview that the Ministry of Mining did not engage the Chamber even any member of the group in formulating the Act.

Malunga said: “We were not engaged. My views are well known. Malawi is a country with a Mining Regulatory Authority with no clear mandates for Geological Survey Department and Department of Mines.”

In a separate interview, ASM subsector consultant Chikomeni Manda concurred with Malunga of not being engaged describing the development as undemocratic.

Manda said Malawi is a democratic country which should have been giving all stakeholders and players in the industry an equal opportunity to participate in formalization of any document.

He said: “Lack of consultations deprived the citizens of a chance to contribute important issues which were left out in the Act.”

“It was selfish on the part of Government to sideline the key stakeholders in the industry. What Government did should have never happened in a democratic country like Malawi.” 

Natural Resources Justice Network (NRJN) Programs Coordinator Joy Chabwera said missing of the CSOs during consultations means the Government is not serious with the sector as the organizations ensure that the law benefits all players in the sector.

He said: “CSOs were not consulted at all. It is also unfortunate to learn that mining companies were also not even engaged and these companies are complaining maybe they see some areas in the Act that are not in their favour.”

Among other things, the new Act has introduced the Mines and Minerals Regulatory Authority whose governance roles appear similar to those of the Departments of Mines and Geological Survey.

It has also given powers to the Minister of Mining to decide on whether Government should acquire minority shareholding in a large scale mine and the amount of stakes while the old Act spelt clearly that Government can acquire up to 10%.

Mining Sector Consultant Peter Chilumanga commented that the Malawi Government needs to learn from other countries in the region when formulating laws in order to excel in the extractive sector.

Chilumanga said: “Obviously most of the countries have clear cut and transparent laws and policies with regard to fiscal issues.”

“The investment fiscal regimes guidelines are specific and not based on a determination of one person.”

“What is wrong in putting it as was in the old Act and in synchrony with Africa Mining Vision and Southern Africa Development Community (SADC) regimes?”

Shortage of infrastructure

Another issue we have reported as choking the development of mining projects is the shortage or poor condition of public infrastructure in mining areas.

For example, though it has a valid mining licence, Chinese firm MAWEI Mining is failing to start minng heavy mineral sands in Mangochi-Makanjira due to the site’s lack of access to electricity and lack of proper transportation models to ferry the minerals to the seaports to get them to the world market.

The company requires approximately 3MW to kick-start the project and 10MW for the rest of the mine life, and there is also a need to operationalize lake transport services from Makanjira to Chipoka to connect to the railway to Nacala for exporting.

Former PRO for Ministry of Mining Christopher Banda reportedly said in an interview: “MAWEI Mining obtained the mining license in 2017 and when we inquired why they remained dormant they cited rains, insufficient power and transportation constraints as key setbacks.”

“Heavy mineral sands have highest potential to boost revenue generated from local extractive sector as these type of minerals are in a class of ore deposits which are an important source of zirconium, titanium, thorium, tungsten, and rare-earth elements, which are also fairing good on the market.”

Besides Makanjira Heavy Mineral Sands Project, there are a number of mining projects that require electricity from the national grid including Songwe Hill Rare Earths in Phalombe, Kayelekera Uranium in Karonga and Kanyika Niobium in Mzimba.

Speaking at the National Mining Investment Forum in Lilongwe, Director of Energy Services in the Ministry of Energy Joseph Kalowekamo said that all existing and planned mining projects that were assessed by the Ministry of Mining were visited by Ministry of Energy to appreciate their energy requirements.

He said the projects were then included in the power demand forecast that Ministry of Energy has produced covering the period from 2022 to 2042.

“Currently, our installed generation capacity stands at 555MW, of which 402MW is from hydro and 101MW is from solar and then there is 52MW from diesel power generation. The mining sector demand stands at 246 MW,” said Kalowekamo.

Commenting on the issue in the panel discussion at the Forum, Malunga stressed on the pressing need for additional resources highlighting that the country does not have enough energy to drive the mining sector.

“We need more hydropower generation to be fed to the national electricity grid,” said Malunga

The Ministry of Energy is projecting planned investments of approximately US$3.5 billion to meet the estimated energy demand by 2040. These investments include the development of hydro, solar, wind, and gas power plants.

Besides energy hiccups, lack of transport infrastructure is another challenge as many mining sites are located in remote areas which are not covered by the national transport network.

Speaking at the Mining Investment Forum, Minister of Transport and Public Works Jacob Hara spelt out the need for collaboration between mining companies, the Ministry of Mining and the Ministry of Transport to come up with plans that can benefit the two sectors.

Hara said: “We need to address the mentality that the government owe us good roads. Everyone should be responsible for providing the good roads through the road tolls and we can have special arrangements with the mining companies focusing on maintaining the roads that they use frequently.”

“Malawi’s decision to join the Central Corridor Transport Facilitation Agency shows government's determination to address challenges in the mining sector and elevate transportation infrastructure to new heights.”

“With ambitious plans to revitalize rail networks and enhance road connectivity, Malawi is heading to the new era of economic growth and development for the betterment of its citizens and the broader international community.”

Local cement market hiccups

With the Electricity Supply Corporation of Malawi (Escom) struggling to meet energy demand, heavy industries such as cement manufacturers opt for coal to power their machines. However, this alternative is also proving unsustainable for the cement producers as they are failing to import coal from Mozambique due to foreign exchange shortages.

Local coal miners are also failing to meet the demand of the industry as they are struggling to acquire loans to expand their operations with coal blacklisted by a number of financial institutions as environmentally destructive.

“We may have to stop our cement plant indefinitely as we try to get coal,” said Chairman for Cement Products Limited Aslam Gaffar, whose company has a clinker plant and cement mill in Njereza, Mangochi with a limestone mine in nearby Maera Village.

Shayona Cement Corporation, which has its factory and limestone mining operation in Kasungu, is also struggling to import coal and other raw materials due to foreign exchange shortages.

These challenges dogging the cement producers have led to a decrease in cement production hence the government resorts to issuing import licenses for cement to traders to address the shortfall.

But Mining & Trade Review investigations have revealed that importation of cement has not entirely helped in normalising the situation on the market as traders are selling the foreign brands at the same price with local brands of similar strength yet in a normal situation the foreign brands would have fetched higher prices taking into account transport cost and surcharge. Such a situation has resulted in a general rise in the prices of cement.

Slow pace on formalisation of ASM activities

Artisanal and Small-scale mining (ASM) in Malawi remains informal but Government is taking steps to formalise the activity by facilitating formation of ASM cooperatives, which can be easily reached with training programmes and loans to boost businesses.

Director of Mines in the Ministry of Mining Samuel Sakhuta told Mining & Trade Review in an interview that the Ministry has facilitated the formation of over 18 cooperatives in different parts of the country.

"We are trying our best so that we control this practice of illegal mining and make sure that the best methods and recommended tools are used,” he said

He said the Ministry is continuing its routine programme of training, teaching, advising, monitoring and inspecting the small scale miners on proper mining methods to minimize accidents that have also resulted in deaths in ASM hotspots. 

"It is through these cooperatives that the Ministry is planning structured training. Our officers will continue training small scale miners on proper mining methods as they need to use recommended and appropriate equipment to minimize accidents associated with illegal mining,” he said.

But the ASMs interviewed by Mining & Trade Review said they are not satisfied with the pace of the formalisation process which they described as slow.

MD for Maleta Gems and Jewels Percy Maleta urged the Ministry of Mining to expedite the process, and establish a loan fund for ASMs.

Maleta said that it is painful to the ASMs to see that the mining sector is not being financially supported by government yet other economic sectors are heavily supported technically and financially citing agriculture which is enjoying substantial support through projects like the Agricultural Commercialization (AGCOM) and the National Economic Empowerment Fund (NEEF).

“It pains to read, hear and see that our counterparts in small-scale agriculture are heavily supported technically and financially, talk of extension workers/officers, AGCOM with its billions of kwachas to support the cooperatives and recently NEEF, nothing is being done to small scale miners other than hearing from the government that mining is the main thing and touted to replace agriculture in the coming years. How do we achieve this without investing in the mining sector?” he questioned.

For Mining & Trade Review, it has been a fruitful 15 years of putting to light pertinent issues to help the sector grow. The journey continues!

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By Wahard Betha

The Ministry of Mining has urged Malawians living in diaspora to invest in Malawi’s mineral sector which offers abundant investment opportunities.

Speaking during a virtual meeting which the Ministry organized to engage Malawians living abroad, Minister of Mining Monica Chang’anamuno said the Ministry has developed and continues to develop incentives favorable for investors.

Chang’anamuno encouraged Malawians in diaspora consider forming partnerships in large-scale mining investments besides exploring various opportunities available in Malawi’s mining industry.

She said: “I want to assure you that the Malawi government is committed to creating a conducive environment for investment, with transparent regulations, efficient permitting processes, and support for responsible mining practices.”

“We are actively working to streamline procedures, enhance infrastructure and strengthen governance to facilitate and safeguard investments in our mining sector.”

“This forum, therefore, serves as a platform for dialogue, knowledge sharing, and networking, where we can exchange ideas, forge partnerships, and chart a course towards maximizing the potential of Malawi's mining sector.”

“I would like, therefore, to encourage you to explore the opportunities available in Malawi's mining industry, whether in minerals such as uranium, rare earth elements, or gemstones.”

Chang’anamuno said the government is open to partner with any potential investors interested to invest in any of the country’s minerals.

She said: “We are eager to partner with investors who share our vision of sustainable development and are willing to engage local communities to ensure mutual benefits and long-term success.”

“Together, we can harness the potential of Malawi's mining sector to drive economic growth, create employment opportunities, and contribute to the prosperity of our nation.”

“I look forward to engaging with you further and building fruitful partnerships that will benefit both investors and the people of Malawi.”

The virtual diaspora meeting was held under the theme of ‘Investing in Malawi’s Minerals’ as one way of spearheading the MW2063 Vision which is a blue print for national development and wealth creation.

Chang’anamuno said the virtual meeting is one way of implementing the Agriculture, Tourism and Mining (ATM) Strategy expounded by the State President Dr Lazarus Chakwera.

She said: “We are resolute and committed to unpack this through various interventions until we realize the dream of transforming Malawi.”

“Our country boasts of a wealth of mineral resources, and we recognize the importance of attracting foreign investment to drive sustainable growth and development.”

“Investing in the mining sector in Malawi offers not only the potential for financial returns but also the opportunity to contribute to our nation's economic diversification and job creation.”

The virtual meeting was also graced by Principal Secretary in the Ministry Joseph Mkandawire; Director of Geological Survey Department Stanley Nyama; Chief Inspector of Environment Mphatso Chikoti and Mining Surveyor Hillary Bandawe.

The meeting also included different presentations from the Ministry explaining on issues involving the Mines and Minerals Act as well as investment opportunities in the extractives sector.

Standard Bank Plc (Malawi) Head of Business and Commercial Banking Graham Chipande unpacked issues of financial interventions that the Bank is implementing to support the sector.

Chipande said: “Malawi's mining sector holds immense potential for driving economic prosperity, job creation, and infrastructure development.”

“The private sector plays a crucial role in the development of Malawi's mining industry, contributing significantly to the country's economic growth and development.”

The virtual diaspora meeting follows a successful inaugural 2024 Mining Investment Forum that was held in Lilongwe.