Monday, July 22, 2024 Facebook | Twitter | Linkedin

Mining & Trade News

Malawi Online News
Energy
Malawi courts Commonwealth hand in oil sector
March 01, 2019 / Marcel Chimwala

Malawi has engaged the Commonwealth Secretariat to provide technical assistance in developing the upstream petroleum sector following encouraging results that have emerged in oil and gas exploration across the country.

Multinational firms are conducting exploration for oil and gas in Malawi focusing on the country’s stretch of the African Rift system, which is an area with proven potential for oil and gas discoveries.

Government demarcated the stretch into six prospecting blocks and awarded Block 1 located in Chitipa and part of Karonga to South African firm EFORA Energy formally SacOilHOldings, Block 2 and 3 in Karonga, Rumphi, Nkhatabay and NKhotakota to Hamra Oil, Block 4 and 5 located further South covering Dedza, Ntcheu, Mangochi, Machinga, Mulanje, Phalombe and Blantyre to RakGas MB45 and Block 6 located in the Lower Shire Valley area to Pacific Oil and Gas.

Results from exploration work by Hamra Oil and RakGas have indicated great potential for oil discovery in Malawi.

“As a nation, we are very excited with the incoming results from oil exploration work being conducted by these tenement holders.  The likelihood of finding commercial petroleum discoveries in these potential sites is high with average values in the range of 16.8% – 20%, exceeding the typical international oil industry threshold of 10%,” says Head of Oil and Gas Desk at the Department of Mines in the Ministry of Natural Resources, Energy and Mining, Cassius Chibambo.

Chiwambo says the government has, therefore, resolved to re-engage the Commonwealth Secretariat to provide technical assistance in the development of a regulatory framework that will ensure that there is a win-win situation between Malawi as a country and the investors when oil is discovered.

He says a delegation of the Commonwealth Secretariat already visited Malawi for a scoping mission which was conducted from January 28 to February 1, 2019 as a first step in responding to Malawi Government’s request to provide technical assistance for the Oil and Gas upstream sub-sector.

The Malawi Government, specifically, requested for technical support in the following areas: Review of            Petroleum (Exploration and Production) Act of 1983;finalisation of the development of Petroleum Policy; developing a model petroleum sharing agreement (PSA); re-negotiation of the PSA that it signed with RAKGAS; development of a community engagement strategy; and capacity building.

Delegates from the Commonwealth Secretariat led by Victor Kitange, an Economic Advisor and AlacheFisho, a Legal Advisor held meetings with officials from the Oil and Gas team led by Chiwambo who briefed them on the status of the activities in Malawi.

They also met the Minister of Natural Resources, Energy and Mining AggreyMasi and other officials from his Ministry, and also officials from Department of Mines; Geological Survey Department; Ministry of Finance, Economic Planning and Development; Ministry of  Justice and Constitutional Affairs; Environmental Affairs Department; National Oil Company of Malawi (NOCMA); Ministry of Foreign Affairs and International Cooperation; and Ministry of Trade and Industry.

“In all the meetings conducted, participants were requested for their inputs in order to make the scoping mission comprehensive enough for successful implementation of the technical assistance,” says Chiwambo.

Some of the issues raised during the scoping mission include the need to have robust environmental management framework as most of the citizens have fears over Oil and Gas exploration and production activities.

It was also observed that there is lack of relevant work experience since the petroleum sector is just new in the country, as such there is need for trainings to enable civil servants and other stakeholders manage the petroleum sector.

“On the issue of reviewing legal framework, it was stressed that the essence is to ensure best practices in the sector so that the country is fully benefiting from the petroleum operations,” he says.

Some of the issues that are being reviewed in the Act include; licensing procedures, PSAs, and environmental management.

Chiwambo says that after the Petroleum Policy is developed, drafting sessions for the Petroleum Act will be intensified and the Ministry of Justice will need some support from Commonwealth.

He explains that though the Petroleum Policy is in the final development stages, the Petroleum Act will address issues stipulated in the policy as such the policy has to be finalized before drafting the new Act.

Previously, the Economic and Legal Section of the Commonwealth Secretariat provided technical assistance for the development of the Draft Petroleum Policy, which started with a situational analysis of the country’s Oil and Gas Sector.

Secretary for the Ministry for Natural Resources, Energy and Mining PatrickMatanda is quoted in the Draft Policy as saying that through this expert analysis, the problems and gaps in the upstream petroleum sector were identified, which assisted in the drafting of the policy.

“The draft policy was formulated through reviewing of policies from other countries particularly those sharing similar geological setting as Malawi, extensive consultations with various stakeholders including other government institutions, local authorities, private oil companies, civil society organisations and the academia,” says Matanda.

Among other grey areas identified in the Draft Petroleum Policy is the failure by the government to recruit the Commissioner for Petroleum Exploration and Production.

The Policy reads: “The current Petroleum (Exploration and Production) Act provides for the Minister for Natural Resources, Energy and Mining toappoint a Commissioner for Petroleum Exploration and Production within the Ministry to administer the Act. The post has never been filled and the functions of this office have been performed by the Commissioner for Mines and Minerals and the Department of Mines.”

“Thus, the oversight, development and delivery of an upstream petroleum policy in Malawi fall within the remit of these offices. But when it comes to the broader energy policy, the Commissioner for Mines and Minerals and the Department of Mines would work with the Department of Energy.”

The Draft Policy also points out the need to clarify the role of the National Oil Company of Malawi (NOCMA) which was established under an Act of Parliament and empowered to promote upstream and downstream petroleum activities.

“There would be need to clarify the exact functions and powers of NOCMA to ensure that they are not in conflict with those of the Geological Survey Department regarding oversight of petroleum exploration,” it reads.

The new law is expected to give NOCMA the mandate to manage government’s interest in oil production investments with preliminary proposals indicating that the parastatal will have at least 20% shareholding in the investments.

In a meeting with the Commonwealth delegation, CEO for NOCMA, Gift Dullah, recommended that relevant personnel from his organization, GSD and Departments of Mines acquire necessary training by, among other things, visiting countries that are doing well in the oil and gas field like Norway and Nigeria.

He said it is important that Malawi works on capacity building in the subsector to ensure the investment decisions are done properly in the field so that adequate returns are accrued for the nation.

Dullah also stressed the need for local content by ensuring that the oil ventures are buying local resources and where possible employing capable local people.

He said NOCMA is, currently, working with Malawi University of Science and Technology to introduce relevant courses in the field of petroleum.

Comsec is also expected to initiate communication with other countries to help in terms of training.

The Draft Policy has a section on local content which it highlights as a path to development through petroleum activities in addition to a sound fiscal regime that ensures sufficient revenue collection.

“Oil and gas companies, when purchasing goods and services for their operations, should be required to give first preference, at comparable quality, delivery schedule and price, to goods produced locally and services provided by Malawian citizens, or businesses, subject to technical acceptability of the relevant goods and services in the country,” reads the Policy.

It also calls for the participation of Malawians and Malawian companies in oil exploration, exploitation and related sectors.

The Policy provides opportunities for local companies to buy stakes in oil ventures and NOCMA to buy additional shares in the oil investments.

The Draft Policy also recognizes the need for the oil companies to carry out corporate social responsibility (CSR) programmes and sign community development agreements (CDA)with the communities in their respective project areas.

The Policy statement reads: “Government shall include CSR and CDA requirements in all contracts and in the petroleum legislation, encourage CDAs between the oil companies and affected communities, consider CSR history of companies when awarding contracts and encourage the participation of civil society organisations in oil exploitation issues.”

It says government shall also train or hire monitors to oversee the fulfillment of CSR and CDA obligations, impose stiff penalties for non-compliance, and engage international experts in the development of minimum requirements for CSR and educate local communities on the companies’ responsibilities.

In the drafting session, the Ministry will need capacity in the following areas; legislation drafting or second eye, vetting of the drafted legislation, and contract negotiation.

Column
The Geology of Gemstone Occurence in Malawi
March 01, 2019 / Grain W. P. Malunga

Abstract

Gemstones have always been at the centre of poverty alleviation in rural areas of Mzimba, Rumphi, Chitipa, Ntcheu, Neno, Mangochi, Zomba, Mulanje, Chikwawa and Nsanje.  Most of the information we have on these stones came from small prospectors who made most of the discoveries.  These stones have been found in mica pegmatites, metamorphic rocks, ultramafic rocks and Karoo volcanic rocks.

1.0 GEMSTONES IN MALAWI

Malawi has a wide variety of gemstones including ruby, sapphire, aquamarine, emerald, various garnets, amethyst, rose quartz, rock crystal, tourmaline, chalcedony (agate), spinels, cordierite and jade.  These stones are found in a variety of host rocks including pegmatites, volcanic and basic rocks.  Most gemstones are associated with a particular group or family and may only differ in colour due to inclusion of elements such as iron (Fe), chrome (Cr), lithium (Li) and manganese (Mn).

Pure quartz (SiO2), is colourless, whereas amethyst, a purple variety of quartz, has its purple colour caused by traces of the element iron.  Iron is usually responsible for dark red or brown colours, manganese and cobalt for pink, and chromium for deep green.  

2.0 PEGMATITES

Pegmatites are very coarse crystalline rocks composed of quartz, alkali feldspar and muscovite.

Generally the core of a pegmatite is composed of quartz, with feldspar and muscovite on the outside.  These rocks form the greatest variety of gemstones.

In Malawi, the most important pegmatite belts containing gemstones are found in Chitipa, Mzimba- Kasungu (very wide pegmatite swarm) Ntcheu-Mwanza (e.g. Senzani area), Nsanje (Lulwe – Makoko area). These pegmatites intruded directly into the Basement Complex gneisses. Pegmatites in Malawi Basement Complex contain aquamarine, almandine garnet, rose quartz, tourmaline, amethyst, and sunstone.

In the Zomba –Malosa Massif and Mulanje Massif, the vein pegmatites are associated with intrusive quartz syenite. Common stones in these rocks are smoky quartz, mosaic of orthoclose and microcline feldspar; and aegerine. The pegmatites also have potential for discovery of gem tourmaline, topaz and zircon. In the nepheline gneisses of Thambani (Mwanza), pegmatites contain industrial corundum and zircon.

In other countries pegmatites are known to be also a source of other gemstones including topaz, gem tourmaline, zircon, spessartite garnet, lepidolite, epidote, spodumene and apatite, chysoberyl, fluorite, lazulite, sphene, spinel and a few more others. Therefore we must be on the lookout for these other minerals when mining the more usual gemstones. 

3.0 ULTRAMAFIC ROCKS

Ultramafic rocks are crystalline igneous rocks consisting of dark (mafic) minerals including olivine, pyroxene, amphibole and serpentine.  In Malawi theserocks includeserpentinizedperiodotite, metapyroxenites and tremolite/Actinolite – talc bodies.

Ultramafic rocks are mostly found in the Shire Highlands (e.gMpemba Hill), serpentenizedperidotites are common in the Kirk Range (e.g. Chimwadzulu Hill and Likudzi).  Metapyroxenites are common in Rumphi (Engucwini), Nkhotakota and other parts of the central region while amphibolites of igneous origin are in the Chitipa area.  These rocks can be a source of ruby and sapphire as shown by Chimwadzulu hill. Ultramafic rocks have for years been a source of gem quality ruby and sapphire.

Chimwadzulu rubies are associated with amphibole, mica and feldspar in a metasomatisedperidotite. 

The sapphires are mostly orange, pale green, blue and yellow. Cabochon quality ruby has also been found in the Likudzi area.  Heating and irradiation have been seen to enhance their colour.

In other countries ultramafic rocks have been known to also host jade (nephrite), jadeite, rhodolite and pyrope garnets, green garnet, epidote, diamonds (in kimberlites), diopside, and other gem pyroxenes and olivine. 

4.0 KARROO BASALTS (VOLCANICS)

Most Karroo extrusive rocks (basalts) are exposed in the Shire Valley to the south of Ngabu, west of Sorjin and West of Bangula extending to the Mozambique border. The   volcanics cover an area of about 1000 square kilometers. These basalts are host to gem quality chalcedony including blue agate, chrysoprase (green), variegated agate, and carnelian (pink-red).

The chalcedony was formed from aqueous solutions by infilling of the cavities (amygdales) which formed in the upper parts of the basalt lava pile. 

5.0 METAMORPHIC CALCAREOUS ROCKS

This group of rocks refers to metamorphosed limestone (marble and calc-silicate).  These rocks are widespread over the southern and central parts of Malawi. Green garnet and gem spinel have been found in the Bwanje Valley and Makoko marbles.  Calc-silicates and marble of the Makoko area host malachite.

However in other parts of the world these rocks can also be a source of lazulite, gem spinels, epidote, sphene, scapolite, and glossularite and andradite garnets.

6.0 NON-CALCAREOUS METAMORPHIC ROCKS

This category refers to gneisses and schists which are widespread in the Basement Complex of Malawi.  In certain areas these rocks are a source of mainly almandine and spessartite garnets, and cordierite.

In other parts of the world they also host aquamarine, emeralds, gem andalusite and staurolite, topaz and some of the gemstones found in pegmatites. 

7.0 CONCLUSION

The gemstone industry in Malawi has potential to support the economy if it is properly explored and regulated.  The artisanal miners need to be supported through a properly baked policy, technical and financial support mechanism. These three pillars can bring sustainable development in the gemstone sector.

Mining
New mines law does not provide adequate benefits to MW – NRJN
March 01, 2019 / Gloria Mbwana

The Natural Resources Justice Network (NRJN) says the new Mines and Minerals Act, which has a provision for the Malawi government to decide to have at least 10% shareholding in large scale mining ventures, is far from meeting the expectations of Malawians as the rightful beneficiaries of mining projects.

Chairperson of NRJN KossamMunthali told Mining & Trade Review in an interview that it is unfortunate that parliament passed the Mines and Minerals Bill with such a provision for free government equity when the civil society made it clear that this is on the lower side.

Munthali said: “We already made it clear to government that this is a non-starter and have been wondering what are the basis like and from which model are we trying to borrow.”

“We feel the government is failing to be sincere to Malawians by dangling almost all the proceeds of mining projects to companies at the expense of the nation including impoverished communities in mining areas. In crafting this law, we would have used models of countries in the region which are reaping substantial benefits from the mining sector such as Botswana.”

In Botswana, the Mines and Minerals Act gives government an option to own 15% shares in new mines but the Act calls for negotiations with regard to shares in diamond mining companies.

Consequently, the government has a 50% stake in Debswana with a private company, De Beers, holding the rest, and the Botswana government fully owns other diamond investments including the Okavango Diamond Company and Morupule Colliery.

Munthali explains that though Community Development Agreements (CDA) have been included in the law as advocated by the civil society groups, the law is far from maximizing community benefits from mining projects citing that despite civil society groups advocating for 3 to 4% of mine revenue to be channeled to community projects, the law is only talking of about 0.45% of the annual growth sales revenue.

“Government should not forget that mining is not agriculture because you do not grow uranium like trees. You mine for now or you extract for now, and then it is gone for good.”

He also urges the government to amend the law on community development agreements to take on board medium scale mines which are many in the country as compared to large scale mines.

Munthali also laments the omission of the issue of “free, prior and informed consent” in the Act saying the absence of such a provision is denying the community the right to access information about mining projects taking place in their areas.

“Government enacted the Access to Information law and joined the Extractive Industry Transparency Initiative (EITI) to ensure that information on   mining issues is available to the country’s citizens including communities affected by mining activities. It would have, therefore, been another progressive step on the issue of transparency and accountability on mining activities to include the issue of ‘free, prior and informed consent’ in the new law,” he says.

He explains that in absence of such a provision, mining companies will not be obliged to sensitise communities on the projects taking place in their respective areas.

Malawi government holds 15% shareholding in Kayelekera Mine in Karonga, the country’s largest mining investment, with the rest of the shares owned by Australia’s Paladin Africa.

Despite collecting royalties and taxes from the mine, the Malawi government has not been successful in earning dividends from its shares as Kayelekera, now on care and maintenance, has remained a loss making entity due to low uranium prices on the world market.

Business
Foreign cement floods Malawi
February 01, 2019 / Wahard Betha

There is a growing influx of foreign brands of cement on the Malawi market, whose uncontrolled       importation has created shockwaves among local manufacturers of the product owing to stiff market competition posed by the foreign products.

Mining & Trade Review has established growing market competition between the imported cement and local cement brands mainly in the major cities of Lilongwe and Blantyre.

The foreign brands available in the shops include Ultra-Semi, PPC, Shuwa Cast and Sinoma, a product of China National Materials Company Limited Group – a Chinese multinational that has penetrated Africa by   establishing branches in a number of countries including neighbouring Tanzania and Zambia.

Malawi also continues to import Dangote Cement, produced by Nigeria’s giant Dangote Group through its subsidiaries in neighbouring countries.

Local manufacturers have described the market competition posed by the influx of the foreign brands as unfair since the imported   cement is manufactured in countries whose economic conditions are not similar to those in landlocked Malawi where cost of production is higher.

“The growing quantities of cheap imported cement on the Malawi market are a threat to the survival of local producers like Shayona, which employs a good number of Malawians and substantially contribute to government revenue through various taxes. We call on the Malawi government to regulate the industry in a way that will guarantee survival of local producers,” says Shayona Cement Corporation Operations Manager, PrajeeshPadmanabhan in a write-up he presented at the 2018 Annual General Meeting for the Malawi Chamber of Mines and Energy.

He says it is unfortunate that, though the country can sustain itself through utilization of local limestone               resources for production of cement, every year Malawi is importing clicker and cement worth billions of Kwacha.

Records from the National Statistical Office indicate that in 2017 alone, imports of cement and clinker amounted to MK28.76-billion.

Padmanabhan says: “Such a trend is not viable for Malawi which needs the foreign exchange used for          these cement imports for crucial requirements such as procurement of drugs for its hospitals.”

“It also has to be noted that the local cement industry is still in an infant stage and requires support from the government by controlling these imports. We are capable enough to supply the country’s requirements without the imports.”

Managing Director for Shayona Cement, Jitendra Patel, told Mining & Trade Review in a previous interview that it is imperative for the government to control cement imports and support local investments such as the expansion of the Shayona factory in Kasungu if the country is to achieve socio-economic development.

He said that besides providing employment to Malawians, the cement companies support the government in a number of ways including the provision of social amenities as part of corporate social responsibility (CSR) programmes.

“The government has to appreciate our role as a partner in development and protect our investments. It has to understand that by encouraging cement imports, it is exporting jobs to those cement producing countries and    this is retrogressive at this time when all the countries are fighting to retain jobs,” said Patel.

Cement Products Limited (CPL) Chairman, Aslam Gaffar, also expresses concern over the growth in cement imports saying it is high time the government appreciated massive investments by the local producers and protect them from the harsh business environment posed by imported cement.

He says cement producers are keen to continue engaging the government through the Ministry of Trade, Industry and Tourism on the issue.

“We were expected to discuss this issue with the Ministry but the meeting was aborted at the 11th hour due to the recent cabinet reshuffle. We are looking forward to their support as we are sure they are equally anxious on the amount of forex being wasted,” he says.

However, spokesperson for the Ministry of Industry and Trade, MayesoMsokera, says the government giveslicences to traders to import some cement to supplement the deficit from local production.

He explains that applications for import licenses for cement are scrutinized and granted upon making an appropriate demand and supply analysis.

Msokera says, “As Government, we have the mandate to balance the needs of both the producers and the consumers with regard to availability of this essential commodity as well as its price and the current cement importation does not amount to an influx.”

He explains that it is the government’s duty to stabilize supply and prices of cement so that they do not destroy the construction industry, which also employs many people and is an integral part of Malawi’s infrastructure and industrial development as it provides a growth impetus to other sectors of the economy through backward and forward linkages.

“We have had situations where cement prices rose to around MK12000 in 2017. Therefore, it is, essential that, cement availability and affordability is safeguarded for the healthy growth of the Malawi economy,” he says.

He, however, acknowledges the fact that some cement is being smuggled into the country and says, as Government, they are considering additional measures of curbing the problem.

“The Ministry is discussing with other Government agencies such as the Malawi Revenue Authority and the private sector stakeholder institutions so that issues of smuggling are addressed holistically. As a Ministry, we would like to appeal to the private sector to hold hands and collaborate with Government in order to root out this malpractice bedeviling our manufacturing sector,” says Msokera.

He also encourages local industries to improve their distribution network to ensure that cement is available in all corners of the country saying there are cases whereby companies undertaking large- scale construction projects in bordering districts prefer to import cement from neighboring countries as it makes economic sense due to transportation problems in sourcing the locally made product.

Msokera says Government is advocating for growth and development of local industries through the Buy Malawi Strategy, which encourages consumers to purchase locally produced products which are equally of good quality.

Coordinator for the Chamber of Mines and Energy Grain Malunga commented in an earlier interview  that in countries like Malawi where cost of production for cement is high due to environmental factors, there is need to guard against unfair competition such as “dumping” of foreign cement products.

“Profit margin for cement sales are less and there is need to have access to cheap power, high quality limestone and proximity to good markets and other raw materials which are not always readily available in Malawi,” he said.

He, therefore, advised the government to deal with the issue of cement carefully observing that the industry is very sensitive to legal and regulatory instability.

Both Shayona and CPL have invested in multibillion-kwacha construction of clinker producing plants at their factory areas in Kasungu and Mangochi respectively.

Shayona, which has a workforce of over 1200 mostly locals, has a comprehensive CSR programme which has seen the company constructing school blocks at a primary school close to the Kasungu factory, making drug donations to government hospitals and clinics, and planting trees annually in the factory locality to assist in environmental conservation.

Though its factory is relatively new, CPL also boosts of a CSR programme that has involved donating cooking oil making machines to members of the community in the factory area, constructing school blocks and procuring a transformer to electrify the area that hosts the factory.

Mining
Exploration Drilling in Mineral exploration (Geology) and Mining
February 01, 2019 / Ignatius Kamwanje

An Exploration Drilling is a process of mineral exploration in the mining industry through extraction of rock quantity to probe the contents of known ore deposits and potential sites by withdrawing a small diameter core or chip of rock from the orebody so that geologists can analyse the core/chip by chemical assaying and conduct petrologic, structural and mineralogical studies of the rock. Mineral exploration companies are often broken down into two categories namely; greenfield and brownfield.

Greenfield Exploration refers to unexplored areas, where mineral deposits are not already known to exist which can also be subdivided into grassroot and advanced projects while Brownfield Exploration, also known as near-mine exploration, refers to areas where mineral deposits were previously discovered. Exploration companies search globally for mineral deposits that can be economically mined and processed and mineral exploration is made up of a variety of different activities and techniques of which drilling is one of them, that are used to find a potential discovery which eventually may one day become an operating mine.

The goal of Mineral Exploration Techniques

Many different types of exploration techniques are used in conjunction in order to get enough information to accurately define a mineral deposit. Once enough high-quality geological data has been gathered from exploration activities, a project can be analyzed for economic feasibility.

Management will use this data to make a decision on whether to continue exploration, establish or update a mineral resource estimate, proceed with mine feasibility studies in order to reach production, or pursue other strategic initiatives with the property. The data obtained and used must pass through QAQC (Quality Assurance Quality Control) and thereafter highly validated to give well reliable and informed output for successful mining. Going from a previously unexplored piece of land (“greenfield exploration”) to a well-defined mineral deposit can take years and years of work and huge sums of money can be pumped in though in the first instance the chances of success are very slim such that an exploration company can attempt to withdraw. An example of our own KanyikaNiobium Project and Mkango Resources Songwe Hill Rare Earth Project are living testimonies of how long they carried out their exploration activities. However, the Kayelekera Uranium Project did not take that much years to commence mining since there was already exploration data that existed from the 1980s and was done previously by CEGB (Central Electricity Generating Board) of UK before Balmain Resources took over and was granted an EPL in 1997/98 and later entered into agreement with Paladin Resources to have 90% interest and the remaining 10% equity stake in the project was granted in 2005.

There are many techniques that may be utilized during mineral exploration programs, depending on the mineral deposit type and stage of exploration that is being pursued – as well as the location and budget of the program of which among them is Drilling.

Drilling Techniques

Drilling is the most expensive method of exploration and typically occurs in the later stages of exploration after other methods have already identified a potential deposit     (anomaly). As drilling is an expensive undertaking, detailed study of the area must be made before starting the project. Core logging forms an important aspect of an exploration geologist job and an important stage in the follow up work to an exploration target. There are many different types of drilling methods and all have their place in the universe. Drilling programs are used to collect rock samples at greater depths than surface methods allow. Among others, this page will highlight some of the drilling methods used.

(a) Diamond Drilling (DD)

This method produces a continuous core of rock (in theory) and allows a solid piece of rock core to be collected in such a way that an interval of core allows for much more data to be accurately interpreted.  It consists basically of a hammer unit which is driven by compressed air. This hammer unit imparts a series of short, rapid, blows to the drill steel or rods and at the same time slowly rotates them and sometimes known as down-the-hole hammer and as the name implies, the hammer unit is lowered down the hole at the end of the rods and the diamond drill bit on the end of the hammer unit consists of a large number of chisel ends. Drilled samples are then assayed, and the results will help build a model of the entire deposit. This type of drilling can eventually lead to the entire resource being defined within the boundaries of a chosen cut-off grade but based on the recovery percentage of the core.

(b) Reverse Circulation (RC)

 Reverse circulation drilling produces rock chips which can be sampled under the assumption that they come to the surface in the order in which they were produced and this method returns rock samples in the form of chips that allows sampling but at greater depths. Air is blown down the outside of the drill steel (between it and the wall of rock) and the air and rock chips are carried to the surface on the inside of the drill steel. As the air exits the drill with great blows of dust the rock chips are captured and put in bags for subsequent assaying. In this instance a very large truck is loaded with a tower, drill head, compressor and motor is used. The drill bit is usually of a tri-cone construction (3 cone shaped bits) and a bunch of air blown into the hole to capture the rock chips. This type of drilling is usually a fraction of the cost of diamond drilling but there is controversy surrounding the validity of the samples that are obtained and the method limits the amount of information that can be derived from the sample. Unfortunately, there is no way of knowing what the recovery of chips is and usually it is must be over 100% because the wall of the drill hole caves back a bit and extra rock chips are created and prone to contamination.

(c) Auger Drilling

This method uses an auger as a drilling device. It usually includes a rotating screw   helical blade called a “flighting” to act as a conveyor so as to remove the drilled-out material. The rotation of the blade causes the material to move out of the hole being drilled. Auger drills are used for semi-consolidated soils and produce a core (hollow core) or loose samples (solid core)

(d) Churn drilling

A drill whose cutting action is achieved by raising and dropping a chisel bit. Under this operation, drilling is performed by a heavy string of tools tipped with a blunt-edge chisel bit suspended from a flexible cable, to which a reciprocating motion is imparted by its suspension from an oscillating beam thereby causing the bit to be raised and dropped. It is used to sample gravels by pounding a steel pipe into the ground and then pulling out the material trapped inside the pipe. In churn (cable tool drilling)- heavy chisel like steel is repeatedly jerked up and down by a cable wire.

(e) Sonic Drilling

Cutting or shaping materials with an abrasive slurry driven by a reciprocating tool attached to an audio-frequency electromechanical transducer and vibrating at sonic frequency. This method uses sound waves to consolidate wet deposits like tailings ponds and capture the soils in a tube.

So far, the most common methods which are used in modern day exploration drilling are diamond and reverse circulation drilling methods. The other types of drilling are for fairly specialized cases and because a solid sample is obtained directly can be quite accurate. Of course, it often happens that the sample won’t come out of the pipe sometimes wholly as anticipated by the geologist. The mining industry lives and dies on the accuracy of the samples taken. And the most important samples are taken by drilling so it is important to understand the drilling process ensuring that good questions can be asked. As with anything in life, it is best to find out a bit about the company doing the drilling to       decide as to the validity of the sampling results.  Now that there is a lot of data collected and some interesting mineralization has been discovered, it is time to try and represent the data accurately in space. So the concept of a geological model is produced.

Energy
Expansion project to double capacity of Wovwe hydro plant
January 30, 2019 / Wahard Betha

Government says the US$12-million Wovwe Power Station expansion project will more than double production from the station’s installed capacity of 4.5 MW to 10MW.

Public Relations Officer for the Department of Energy in the Ministry of Natural Resources, Energy and Mining, Saidi Banda, told Mining &Trade Review that such a development will help minimize the gap between demand and supply of power in the country.

Electricity Supply Corporation of Malawi (Escom)   supplies power sourced from Wovwe to Karonga, Chitipa, Rumphi and some parts of Mzuzu.

Electricity Generation Company (EGENCO), which operates the power station, engaged German firm, Fichtner in May 2018 to conduct a feasibility study for the expansion project with funding from the German Government, which is expected to last 18-months.

“The project will improve plant reliability as well as   extend its life to ensure that the people in the designed areas have sufficient and reliable energy for their needs,” says Banda.

Wovwe offers a diversified source of power for Malawi as the rest of EGENCO’s power stations are located on the Shire River.

Banda explains that after completing the feasibility study, Government and EGENCO will identify an Engineering Procurement and Construction (EPC) contractor for the expansion project.

Wovwe is designed to either connect to the national power grid or operate on off grid to only supply power to northern region districts.

The power station is located in Karonga District on Wovwe River, upstream of Wovwe Rice Scheme.

Besides the ongoing Wovwe Power Project, EGENCO is in the middle of soliciting funds for other       impending power projects including 138MW Kholombidzo hydro-power project on Shire River to cost US$11.5-million and 180MW Songwe Hydropower Scheme to be constructed on Songwe River based on a cooperation agreement between Malawi and Tanzania.

Malawi is experiencing power supply shortages due to environmental problems including decreasing water levels of the Shire River which has seen EGENCO reducing its production from the installed capacity of 351MW to about 200MW against a pick demand of 500MW.

EGENCO’s other power stations include Nkula, which was the first major hydro power station in Malawi and   comprises of Nkula A with three machines, each rated 8MW, and Nkula B with five machines each rated 20MW.

There is also the 92.7MW Tedzani Hydro Power Station located on the Shire River, 7km downstream of Nkula Hydro Power stations and comprises of three Power Stations: Tedzani I, Tedzani II and Tedzani III.

The other power station is Kapichira which has an installed capacity of 129.6MW.

Energy
Malawi Oil Prospects
January 30, 2019 / Chiku Jere

Results from the on-going exploration for hydrocarbons that multinational firms are carrying out across Malawi have revealed encouraging preliminary prospects for the discovery of commercially viable petroleum and gas reserves.

Making a presentation titled “STATUS OF OIL AND GAS IN MALAWI AND OPPORTUNITIES” at the 2018 Alternative Mining Indaba that was held in Mangochi last month, AmiduMakwinja, an officer from the Mines Department’s Oil and Gas desk said that based on exploration results collected so far,    preliminary prospects for petroleum in the country are good and promising.

Makwinja explained that the outcome of geophysical and geological mapping exercises conducted by exploration companies in target areas such as Chitala and Mpatsanjoka in Salima, Dulombale and Golomoti in Dedza, Lake Malombe in Mangochi, Dwangwa in Nkhotakota and Vua in Karonga is positive.

“The likelihood of finding commercial petroleum discoveries in these potential sites is high with average values in the range of 16.8% – 20%, exceeding the typical international oil industry threshold of 10%,” he said.

The results have emanated from Phase I exploration work which has involved desk studies, airborne surveys, seismic surveys and data interpretation, geomapping for blocks on ground, and Environmental and Social Impact Assessment (ESIA).

The companies are now geared to move to Phase II which requires importation of drilling equipment to start preliminary drilling of exploration wells for determination of availability of hydrocarbons.

Assumptions are that the Oil and Gas reserves could be in the same range as those discovered in Ethiopia, Uganda and Kenya since Malawi lies in the East African Rift Valley System.

Makwinja said if Malawi makes Oil and Gas discoveries in the same order of magnitude as comparator countries, potential oil revenue estimates can be many times more than the current export earnings.

The country is using a comparative analysis of economies which have recently discovered oil reserves within the African Great Rift Valley to analyze its hydrocarbon potential.

The revenues are estimated assuming a long term oil price of US$ 60 per barrel as World Bank anticipates that   all three major benchmark oil prices, Brent, West Texas Intermediate (WTI), and Dubai, will continue to increase after 2020 to reach $70 per barrel by 2030.

Currently, Malawi’s macro-economic environment over-depends on the rain-fed agricultural sector which has proven to be unreliable due to fluctuating weather pattern.

This has led government to embark on hunting for potential alternate and complementary economy drivers, by going on over-drive promoting other sectors such as the Extractives Industry.

Within the Extractives Industry, government aims to develop the Oil and Gas subsector into one of country’s complementary economic spinners if commercially viable discoveries are made hence the demarcating of oil    prospecting area into Six (6) Blocks and subsequent issuing of Exclusive Prospecting Licenses (EPL) to four multinational firms.

Block 1 was awarded to Efora Energy (formerly SacOil Holdings Limited), Block 2 and 3 to Hamra Oil, Block 4 and 5 to RAKGAS MB45, and Block 6 to Pacific Oil and Gas.

However, Efora and Pacific Oil and Gas have since relinquished their licences.

Environmental and Social Impact Assessment for Hamra Oil’s Blocks 2 and 3 were completed and approved by Malawi’s Environmental Experts in the Department for Environmental Affairs paving way for Phase 2 exploration which requires drilling of exploration wells.

Makwinja said it is imperative that on-going petroleum activities are supported on a sustainable basis to achieve successful oil and gas discoveries which he said if well managed, its economic impact is likely to accelerate economic growth and development thereby reducing poverty.

Presently, all Oil and Gas exploration operations are based onshore and government has pledged that modern environmental management practices and methods will be implemented to minimize and mitigate against any disturbances to the environment.

Until Malawi builds its own regulatory and financial    capacity, government says the first phase for petroleum operations will focus on onshore including along the lakeshore.

Meanwhile, the Department of Mines is reportedly at an advanced stage in the process of formulating a Petroleum Policy that will among other things address issues of good governance for upstream petroleum subsector, promote balanced fiscal regime, good revenue management, and environmental sustainability as well as maximise local content.

“Currently, the draft policy is still undergoing intra and inter-ministerial polishing to ensure consistency with other policies before approval and adoption,” Makwinja said, adding that with the help of international experts like Commonwealth Secretariat, the review aims to meet international standards.

The Petroleum (Exploration and Production) Act of 1983 is also under review to reflect the current global petroleum issues.

Review meetings were conducted with several stakeholders and instructions from the meetings were submitted to the Ministry of Justice and Constitutional Affairs which is preparing the initial Petroleum Bill of the revised law.

Among other pertinent issues, the new law will put in place measures that will enable community members to take part in choosing kinds of projects befitting their areas as part of community development agreements.

The government has also partnered with the Exploration Companies in facilitating establishment of Oil and Gas courses at Malawi University of Science and Technology (MUST) and University of Malawi’s Polytechnic to enhance high human capacity and expertise in the petroleum subsector.

Malawi has already started benefiting from upstream petroleum activities having so far received significant developmental contribution both industrial and social since exploration companies were awarded the exploration licenses.

The benefits include supply of clean and safe water, interventions during disasters such as floods and supply of medicine and associated medical equipment.

The firms have also funded provision of sanitation and hygiene facilities such as toilets, construction of school blocks and provision of school material as well as promotion of sporting activities, which includes the establishment of Surestream Academy in Blantyre by UK prospector Surestream Petroleum.

Makwinja said government will continue putting more efforts to the current exploration activities until results are obtained on the status of petroleum resource potential in the country so that the country and its citizenry benefit from the imminent exploitation of the prized endowment.

“If Malawi can restrict exportation of Crude Oil and ensure refining of the same in the country, more jobs will be created, and it will make petroleum products readily available at a cheaper price,” he said.

Mining
Malawi needs loan fund to support small scale mining operations
May 06, 0224 / Marcel Chimwala

As reported in our article on Page 12, the Malawi Government says it is working on establishing a loan fund to finance operations of artisanal and small-scale miners (ASMs).

Director of Mines in the Ministry of Mining Samuel Sakhuta is quoted in the article as saying that his Ministry is working with the Ministry of Finance to come up with a revolving fund for procuring equipment for ASMs.

We strongly support this initiative by the Malawi Government and would like to urge the authorities to expediate its implementation.

As MD for Maleta Gems and Jewels which is a key player in the ASM subsector Percy Maleta is quoted in the article, the revolving fund is the major way to alleviate the financial challenges faced by small scale miners in Malawi. 

We have reported in plenty of articles in previous editions of some ASMs involved in mining of industrial minerals such as limestone, quarry and gypsum who have potential to develop their businesses but they are failing to do so because they are forced to use primitive equipment due to lack of funding to buy mechanized equipment.

We have reported previously about ASMs including women in mining who are being forced to sell rough gemstones because they are failing to process the stones into finished products hence are being robbed by the buyers including foreigners who buy the stones for a song.

We have reported about small-scale gold miners causing serious environmental damage in their hotspots across the country because they mine on trial and error basis due to lack of gold detectors.

We feel the solution to all these problems is the loan fund for ASMs, whose trade is attracting multitudes across Malawi including members of the rural population.

As Maleta is quoted in the article, the mining sector is one of the key enablers in Malawi 2063 just like agriculture and tourism.

Therefore, government needs to invest in mining just like it is doing in these other sectors to propel economic growth.

Malawi’s mining sector cannot grow through facilitating foreign direct investment in large scale mining only, small scale miners also needs to be supported so that they are able to graduate into medium scale mechanized miners.

Tenders
Current Tenders in Malawi - NCIC
November 10, 0023 / Wahard Betha

Assignment: Provision of transport and haulage services for the financial year 2024 to 2025   

Client: National Construction Industry Council (NCIC)

Duration period: 12 months

Bidding procedure: National Competitive Bidding

Deadline: 13 November, 2023

Contact:  The Chairperson, Internal Procurement and Disposal Committee, National Construction Industry Council (NCIC) Lilongwe, Private Bag A146, Lilongwe.    

Assignment: Provision of painting, decoration works and signage services for the financial year 2024 to 2025  

Client: National Construction Industry Council (NCIC)

Duration period: 12 months

Bidding procedure: National Competitive Bidding

Deadline: 13 November, 2023

Contact:  The Chairperson, Internal Procurement and Disposal Committee, National Construction Industry Council (NCIC) Lilongwe, Private Bag A146, Lilongwe.   

Assignment: Provision car rental services for the financial year 2024 to 2025  

Client: National Construction Industry Council (NCIC)

Duration period: 12 months

Bidding procedure: National Competitive Bidding

Deadline: 13 November, 2023

Contact:  The Chairperson, Internal Procurement and Disposal Committee, National Construction Industry Council (NCIC) Lilongwe, Private Bag A146, Lilongwe.   

Assignment: Provision of stationery, event decoration services, accommodation and conference services for the financial year 2024 to 2025  

Client: National Construction Industry Council (NCIC)

Duration period: 12 months

Bidding procedure: National Competitive Bidding

Deadline: 13 November, 2023

Contact:  The Chairperson, Internal Procurement and Disposal Committee, National Construction Industry Council (NCIC) Lilongwe, Private Bag A146, Lilongwe. 

Assignment: Supply and delivery of office furniture and fittings, firefighting, fire protection equipment including maintenance services for the financial year 2024 to 2025  

Client: National Construction Industry Council (NCIC)

Duration period: 12 months

Bidding procedure: National Competitive Bidding

Deadline: 13 November, 2023

Contact:  The Chairperson, Internal Procurement and Disposal Committee, National Construction Industry Council (NCIC) Lilongwe, Private Bag A146, Lilongwe. 

Assignment: Supply and delivery of ICT equipment, hardware and building materials, motor vehicle tyres and batteries, outdoor advertising, air travel agency services for the financial year 2024 to 2025  

Client: National Construction Industry Council (NCIC)

Duration period: 12 months

Bidding procedure: National Competitive Bidding

Deadline: 13 November, 2023

Contact:  The Chairperson, Internal Procurement and Disposal Committee, National Construction Industry Council (NCIC) Lilongwe, Private Bag A146, Lilongwe.   

Assignment: Consultancy services for provision of detailed designs, tender documentation and supervision services for the construction of twenty storey capital hill twin towers office blocks

Client: Ministry of Transport and Public Works

Delivery Period: 26 weeks

Bidding procedure: National Competitive Bidding

Deadline: 29 November, 2023

Contact:  The Chairperson, Internal Procurement and Disposal Committee, Ministry of Transport and Public Works, Capital Hill, Private Bag B365, Lilongwe 3, Malawi.

Email: buildingdept@transport.gov.mw cc: dob_ipdc@transport.gov.mw   

Assignment: Provision of consultancy services for preparation of financial statements and audit file management for FY2020/2021, FY2021/2022 and FY2022/ 2023

Client:  National Oil Company Limited of Malawi (NOCMA)

Delivery Period: 3 months

Bidding procedure: National Competitive Bidding

Deadline: 1 December, 2023

Contact: The Chairperson, Internal Procurement and Disposal Committee, National Oil Company Limited of Malawi, NOCMA Board Room, Kang’ombe House, 4th Floor, East Wing, City Center, Lilongwe Malawi.

Assignment: Supply and delivery of motor vehicles

Client:  National Oil Company Limited of Malawi (NOCMA)

Delivery Period: 8 to 12 weeks

Bidding procedure: National Competitive Bidding

Deadline: 1 December, 2023

Contact: The Chairperson, Internal Procurement and Disposal Committee, National Oil Company Limited of Malawi, NOCMA Board Room, Kang’ombe House, 4th Floor, East Wing, City Center, Lilongwe Malawi.

Assignment: Supply and installation of six community based flood early warning systems  

Client: Department of Disaster Management Affairs  

Bidding procedure: National Competitive Bidding

Deadline: 11 December, 2023

Contact: Procurement and Disposal of Assets Unit, Department of Disaster Management Affairs, 2nd Floor Department of Economic Planning Building, Capital Hill Circle, Private Bag 336, Lilongwe 3 Malawi.