Mining & Trade News

Beverage manufacturer Castel Malawi has launched a new beer brand dubbed “Doppel Munich”.

Speaking to Mining and Trade Review at the launching ceremony  held at Amaryllis Hotel in Blantyre, Castel MD Hervé Milhade said the launch of the new brand is part Castel’s positive strides to ensure maximum satisfaction to its customers.

Milhade said: “As you are aware, in Castel’s history we always yearn for consumer’s satisfaction through wide range of products and the launching of this brings solely echoes all the forces we have embarked on to serve our customers better.”

He also explained that they have launched the new brand during the time the country is suffering from the aftermaths of the novel coronavirus (Covid-19) pandemic which has left many people seeking new varieties of beverages.

“This beer is very strong, tasty and unique in a special way from ingredients to packaging to satisfy consumer’s tastes,” he said.

A customer, who was available during the launch, Stela Kulemeka hailed the company for introducing the Doppel Munich beer sayng it has come at a right time to offer an opportunity to customers to choose from range of beverages available.

Tourism Group, Blantyre Hotels, says it is advancing with preparations to construct a five star hotel in Lilongwe to be called Lilongwe Ryalls Hotel.

The Group says in a financial statement for the year ended September 2020 that it will own the Lilongwe Ryalls Hotel through its subsidiary Oasis Hospitality Limited.

The hotel is to be on a piece of land which is part of the land owned by the Lilongwe Golf Club.

“During the year, the freehold land was acquired from Lilongwe Golf Club at a consideration of K2.1 billion,” reads the statement.

Blantyre Hotels registered a loss a loss of K454 million after tax in the financial year as compared to previous year’s profit of K467million representing a decrease of 197%.

The hotel group says in the statement the coronavirus (Covid-19) pandemic posed a challenge to the operating environment and its impact might be for a longer period than anticipated.

The total revenue for the group amounted to K2,077 billion which was 49% for the year 2019 of K4,066 billion.

“The drop in revenue was due to the impact of the Covid -19 pandemic which had an adverse effect in the hospitality industry worldwide. Ryalls Hotel, occupancy levels were at 30% compared to 61% achieved for the same period last year,’’ says the Group.

It, however, says business has remained resilient as the Group has continued to focus on the safety of its guests and associates to improve the guest experience and service delivery.’’

 ‘’The board is confident that business will return to normal once the Covid -19 is contained through effective administration of vaccines which has commenced,’’ it says.

MINING & SOCIAL ISSUES with Ignatius Kamwanje
The Author is a Consulting Geoscientist with experience
in Mineral Exploration, Mining Geology, ESIA, Ground
Water Resources and Occupational Safety, Health and
Environment.

In 2015, United Nations (UN) member states adopted the 2030 Agenda for Sustainable Development which includes a set of Sustainable Development Goals (SDGs) for 2015-2030 after relinquishing the Millennium Development Goals (MDGs). The SDG agenda provides a successor framework for the Millennium Development Goals (MDGs) that covered the period from 2000-2015. The SDGs represent the world’s comprehensive plan of action for social inclusion, environmental sustainability and economic development. Mining companies will be called on to extract responsibly, waste, use safer processes, incorporate new sustainable technologies, promote the improved wellbeing of local communities, curb emissions, and improve environmental stewardship. Mining companies committed to the SDGs will benefit from improved relationships with governments and communities, as well as better access to financial resources. Those that fail to engage meaningfully with the SDGs will put their operations at risk in the short and long term.

Meeting the SDGs by 2030 will require unprecedented cooperation and collaboration among governments, non-governmental organizations, Civil Society Organisations, development partners, the private sector and communities. Achieving the SDGs will therefore require all sectors and stakeholders to incorporate the SDGs into their own practices and operations.

Mining companies will be called on to extract responsibly, waste, use safer processes, incorporate new sustainable technologies, promote the improved wellbeing of local communities, curb emissions, and improve environmental stewardship. Mining companies committed to the SDGs will benefit from improved relationships with governments and communities, as well as better access to financial resources. Those that fail to engage meaningfully with the SDGs will put their operations at risk in the short and long term.

The mining industry has the potential to positively contribute to the SDGs. Mining can foster economic development by providing opportunities for decent employment, business development, increased fiscal revenues, and infrastructure linkages. Many of the minerals produced by mining are also essential building blocks to technologies, infrastructure, energy and agriculture.  However, mining has contributed to many of the challenges that the SDGs are trying to address – environmental degradation, displacement of populations, worsening economic and social inequality, armed conflicts, gender-based violence, tax evasion and corruption, increased risk for many health problems, and the violation of human rights. In recent times, the industry has made significant advances in mitigating and managing such impacts and risks, by improving how companies manage their environmental and social impacts, protect the health of their workers, achieve energy efficiencies, report on financial flows, and respect and support human rights. Importantly, mining companies’ positive contributions to the SDGs include both improvements towards the SDGs and the corresponding targets as well as preventing or mitigating negative impacts.

While the mining industry is diverse, the scope and nature of typical mining activities highlight some common opportunities to leverage and contribute to the SDGs. Opportunities for mining companies to positively contribute are found across all of the goals and individual companies will need to do the analysis to understand how their business can make an impact. A company’s specific actions and opportunities will depend on the local social, political and economic context, the mineral resource base, the phase of mining activities (mineral exploration, development, production, mine closure).

Three key areas, where sustainable development can be applied in mining assert the cooperation and integration of technical and economic activities that were agreed as necessary to ensure economic growth, ecological protection of natural resources and environment, and social development including safety at workplaces and community development.

(A). Mapping Mining to Sustainable Development Goals (SDGs)

1. Social Inclusion

Mining can significantly impact local communities, bring economic opportunities, but also brings challenges relating to livelihoods and human rights:

(a) SDG1 (End Poverty), SDG5 (Gender Equality) and SDG10 (Reduced Inequalities):

 Mining generates significant revenues through taxes, royalties for governments to invest in social-economic development, in addition to opportunities for jobs and business locally. Mining companies can take an inclusive approach by working with communities to understand the mines’ actual and potential positive and negative impacts. Companies can also support participatory local decision-making processes regarding the mining operations, the equitable allocation of benefits and the resolution of grievances, and identify and expand opportunities to strengthen the voice and influence of marginalized groups, including women, to ensure that inequalities are reduced, rather than reinforced, by the economic opportunities a mine may bring.

(b)  SDG16 (Peace, Justice and Strong Institutions)

 Mining can contribute to peaceful societies and the rule of law by preventing and remedying company community conflict, respect for  human rights and the rights of indigenous peoples, avoiding illicit transfers of funds to public officials or other persons, ensuring transparent reporting of revenue flows, and supporting the representative decision making of citizens and communities in extractives.

2. Environmental Sustainability

Mining activities normally cause impacts on land, water, flora and fauna, climate and people that depend on these resources:  

(i) SDG6 (Clean Water and Sanitation) and SDG15 (Life on Land)

 Mine development requires access to land and water, presenting significant adverse impacts on lands and natural resources that can be mitigated or avoided.

(ii) SDG7 (Energy Access and Sustainability) and SDG13 (Climate Action)

 Mining activities, are energy and emissions intensive, presenting opportunities for greater efficiency as well as expanding access to energy

3. Economic Development

Mining can have a local, regional and national impact on economic development and growth that can be leveraged to build new infrastructure, new technologies and workforce opportunities

(a) SDG8 (Decent Work and Economic Growth)

Mining can generate new economic opportunities for citizens and members of local communities, including jobs, training, and business development relating to mining operations, associated service providers, or new local economies linked to the mine.

(b)  SDG9 (Infrastructure, Innovation and Industrialization) and SDG12 (Responsible Consumption and Production)

Mining can help drive economic development and diversification through direct and indirect economic benefits and by spurring the construction of new infrastructure for transport, communications, water and energy. Mining also provides materials critical for renewable technologies and the opportunity for companies to collaborate across the supply chain to minimize waste, and to reuse and recycle.

Achieving sustainable development is challenging and the mining industry must ramp up its engagement, partnership and dialogue with other industry sectors, government, civil society and local communities. To realize the full potential for contributing to the achievement of the goals, mining companies must continue to work to integrate changes into their core business and, along with the mining industry as a whole, bolster collaboration, partnership and meaningful dialogue with government, civil society, communities and other stakeholders.

(B). Aligning mining issues to Sustainable Development Goals( SDGs)

(i) Mining and Poverty eradication (SDG1)

• Disclose details of payment to host governments(PWYP) through royalties and taxes
• Supporting non mining Social Livelihoods like food security and water supply to communities
• Championing inclusive employment by engaging locals.
• Provide training and  mining expertise to locals for a successful succession plan

(ii) Mining and zero Hunger (SDG2)

• Explore synergies through agriculture and innovations and transparent management of water resources
• Keep land/ farms free of pollution
• Partnering with agriculture to support food security and prevent malnutrition

(iii) Mining, good health and well-being (SDG3)

• Championing Occupational Safety and Health  in the mining workplace
• Prevent occupational  diseases like TB, Cirrhosis and prevalence of STIs etc through counselling and other programs
• Prevent toxic pollution in air and surrounding environment

(iv) Mining and quality education (SDG4)

• Upgrading local skills thru provision of training, apprenticeship and graduate programmes. etc
• Provide opportunities for collaboration with universities to design mining programmes in their curricula
• Train for sustainable livelihood opportunities beyond mine closure

(v) Mining and Gender equality (SDG5)

• Provide opportunities for women in mining
• Practice gender inclusion across the project life cycle
• Establish gender sensitive grievance mechanisms and health related issues

(vi) Mining, clean water and sanitation (SDG6)

• Water conservation and recycling of wastewater
• Water/air quality monitoring
• Water management through alignment with government policies.
• Support local participation in capacity building of water management practices.

(vii) Mining and affordable clean energy (SDG7)

• Improve energy efficiency
• Incorporate renewable energies
• Explore co financing programmes in energy

(viii) Mining decent work and economic growth (SDG8)

• Provide steady income through employment.
• Enhance trade and create small companies to supply products to the mine
• Create mining towns/urbanization.

(ix). Mining Industry, innovation and infrastructure (SDG9)

• Transfer technologies and introduce new innovations
• Develop infrastructure like water systems, buildings road upgrades
• Support surrounding and local industries in supply chain.

(x) Mining and reduced inequalities (SDG10)

• Establish inequality related risks and establish baseline welfare statistic before mining commences
• Champion inclusivity by employing, training and employing even the vulnerable, marginalized people
• Encourage participation of communities in revenue collection, budgeting etc.

(xi) Mining and sustainable cities, communities (SDG11)

• Discourage chemical, physical and water pollution from urban mining activities through unnecessary waste disposal occurring close to cities
• Establish rehabilitation of mined areas through re-afforestation and create urban green cities.
• Provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport with special attention to the needs of those in vulnerable situations, women, children, people with disabilities and the elderly.

 (xii)Mining and responsible consumption, production (SDG12),

(xiii)Mining and climate action (SDG13),

(xiv)Mining and life below water (SDG14),

(xv)Mining and life on land(SDG15)

(xvi)Mining, peace, justice strong institutions (SDG16),

(xvii)Mining and partnerships for goals (SDG17)

Malawi’s Ministry of Foreign Affairs has advised Malawians who make online vehicle importation transactions with Japanese dealers to ascertain credibility of the firms before making any financial commitments.

In a Press Statement, the Ministry expresses concern over the increase in the number of complaints Malawi Embassy in Japan receives in relation to failed or mishandled processes of importation of used vehicles.

The failed transactions have apparently been leading to importers being duped or being sent wrong vehicles.

The Ministry, therefore, advises Malawians intending to import vehicles from Japan to ensure that they get right information about dealers they are transacting with, to avoid being duped by unscrupulous merchants.

The statement says investigations Malawi Embassy in Japan has conducted have revealed that some firms Malawians deal with in the importation of vehicles from Japan are either non- existent or unregistered with Association of Dealers of Used Vehicles in Japan.

It says most of the unscrupulous dealers involved in the malpractice cannot be accessed through any means of communication, and usually provide false information to their unsuspecting victims.

 “It has further been observed that in majority of the cases, such unscrupulous dealers deliberately offer very low and attractive prices for their vehicles to attract unsuspecting buyers,” reads the statement in part.

Most of the car dealers Malawians transact with through on line media, the statement reads, feign to be Japanese but are from South West Asia.

The ministry has therefore advised vehicle importers to use reputable dealers rather that those who are unrecognized and unregistered.

 “In view of this, the Ministry wishes to advise that, while online trade provides a great opportunity for less costly business transaction, every caution has to be exercised when using the digital platform.”

Malawi Minister of Tourism and Culture Michael Usi says strategic packaging and marketing of local tourism products and services is necessary to revamp the tourism industry which has been seriously affected by the novel coronavirus (covid-19) pandemic.

During an interactive session with industry players on the base of Malawi’s highest mountain, Mulanje Mountain, famed for its tall-standing Sapitwa peak, cider trees, “spirit” infested forests and its garden-of-Eden beauty, the Minister challenged tourism business captains to be innovative, remain optimistic and to leverage on the pandemic as well as to plan ahead when the pandemic is gone.

“Let us start strategizing on how best to sell Malawi and its natural and cultural heritage. How can we package Mulanje Mountain, Lake Malawi, Nyika and Zomba mountains as well as antiquities, music and dance even our hospitality services?” he challenged the operators

He urged the tourism players to be focused and explore innovative ideas that will revitalize their businesses once the Covid-19 restrictions that have crippled the industry are lifted.

“Indeed tourism sector is among the key sectors that have seen the worst of covid-19 impact and as government relevant cushioning strategies such as soft loans for both small and medium enterprises and soon these loans shall soon be dispersed.”

Chairperson of Tourism Association of Mt. Mulanje, Nancy Chinyanya Longwe, hailed the minister for giving them hope amidst pandemic saying a good number of tourism players have closed their operations due to unfavourable business environment.

Standard Bank Group has forecast that higher agricultural production expected this year due to favourable rainfall patterns will result in good economic performance for Malawi despite the prevalence of the coronavirus (Covid-19) which continues to weigh on the country’s economy.

In a summary of audited financial results for the year ended December 31, 2020, the Bank says business activities slowed down in the year 2020 due to economic challenges caused by Covid-19 pandemic.

It says the downward business trend resulted in drought in foreign currency, the challenge the organization believes will persist this year due to the the pandemic.

“The negative economic effects of Covid-19 pandemic will likely continue in 2021 and currency pressures are expected to continue, largely driven by weak foreign currency inflows which can partly be attributed to the ongoing pandemic,” reads the statement in part.    

The statement also says, besides Covid-19 effects on the organization’ activities, volatile political environment during the first half of the year also impacted its operations.

In 2020, the statement says, inflation rate was notably low, the development that has been attributed to lower food inflation rate in the year whose gross inflation rate was 8.6 percent from 9.4 percent in 2019. In the same year, food inflation and non-food inflation averaged 13 percent and 4.7 percent from 14.3 percent and 5.3 percent in 2019.

The statement says during the same period, the local currency weakened against the Unites States Dollar, which was partly due to reduced supply of foreign exchange on local foreign exchange markets.

“2020 was a challenging year due to the impact of the coronavirus on the macro-economy and the group’s operations. However, despite the challenging operating environment, the group posted a strong set of results,” reads the statement.

The statement further says, after paying its taxes, the group registered a profit of K23.7 billion, which was 50 percent above the profit the bank made in 2019.

During the year, the Bank experienced six percent growth in net interest income, which was a result of growth in loans and advances to customers that grew by 11 percent, despite reduced appetite in the lending space due to the pandemic.

The Ministry of Finance has described an increase in imports of items for the novel coronavirus (Covid-19) management as well as strategic commodities under the Affordable Inputs Program (AIP) as the main catalysts for worsening of the country’s trade balance.

In the 2020-21 Mid-Year Budget Review in Parliament last Friday, Minister of Finance Felix Mlusu said the country has registered heavy imports of the products following the rise of covid-19 cases and increase in demand for AIP products as Malawi clocked the agricultural growing season, a situation which has widened trade deficit.

“Madam Speaker, the country’s trade balance continues to worsen.”

“As at end December 2020, trade deficit widened to US$566.7 million from US$352.8 million recorded during the same period in 2019,” Mlusu said.

Mlusu also said at the end December 2020, Gross Official Reserves stood at US$574.3 million, representing 2.8 months of imports, down from US$846.6 million, 4.1 months of imports recorded in December 2019.

He said the situation has forced the Malawi Kwacha exchange rate against major trading currencies during the year 2020 to face some depreciation pressure.

Mlusu said from June 2020 to December 2020, the Malawi Kwacha depreciated by about 5% against the United States dollar.

He also said the Malawi economy in the year 2020 grew marginally by 0.9%, a downward revision from the estimated growth rate of 1.9% detailed during the 2020/21 budget formulation.

Mlusu said: “This economy, Madam Speaker, continues to suffer from the adverse effects of the coronavirus pandemic which compelled Government to impose containment measures, including partial lockdown and restrictions on mobility.”

“Internationally, Malawi’s economic activities have been hampered by border closures in neighboring countries as well as containment measures in major trading partners such as South Africa, Europe and China.”

The Minister also cited that the Finance Ministry has forecasted preliminary Gross Domestic Product (GDP) growth rate for the year 2021 at 3.5%.

Mlusu said the estimate follows normal to above normal rains that the country has received so far, although localized dry spells are being experienced in some districts mostly in the southern and eastern regions of Malawi.

According to Mlusu, growth in 2021 will also be significantly bolstered by the expected increase in agriculture output due to the impact of AIP.

He said: “Madam Speaker, enhanced growth prospects in 2021 are also buttressed by the on-going Government infrastructure development projects in the road, energy and agriculture sectors, most of which are growth enablers.”

“Furthermore, Madam Speaker, just as in many other countries, the Covid-19 vaccine is also expected to spur business and economic confidence.”

“It is however, important to remember that economic growth in 2021 and beyond is dependent on how fast the second wave of the pandemic dissipates.”

Meanwhile, State President Lazarus Chakwera has assured local Small and Medium Enterprises (SMEs) that his government will operationalize a new Public Procurement and Disposal of Assets  Act that will prioritize local SMEs in awarding of government contracts.

Chakwera said his administration is enforcing the new Act to confine the procurement of several goods and services to local SMEs.

He said: “This effectively brings to an end the procurement policy of past administrations that allowed the concentration of public contracts in the hands of large and foreign businesses for the supply of goods and services that can ably be supplied by local SMEs.”

“Additionally, these policies will inject the much-needed liquidity into the economy by putting money in the pockets of Malawians, enabling them to care for their families, which will in turn stimulate economic activity.”

“To prepare for potential liquidity shortages during the coming weeks of the state of national disaster, my administration has activated the Emergency Liquidity Assistance (ELA) framework to support banks in the event of worsening liquidity conditions.”

Chakwera also said under his leadership, the Government has extended the Reserve Bank’s moratorium arrangement on loan facilities for another six months to June 2021.

He said the moratorium has been designed to give businesses that are operating on funds borrowed from banks some breathing space to stop bleeding from the blows of the pandemic.

The mid-year budget review revised the earlier budget projection from MK2.19 trillion to MK2.33 trillion.

The Tobacco Commission (TC) has advised tobacco growers in the country to give adequate care to their crop to reduce post- harvest losses saying most local farmers do not adequately benefit from their yields as about half of it is lost before it is sold.

TC CEO Joseph Chidanti Malunga says in a Press Statement that tobacco farmers should ensure appropriate harvesting time and set up good storage facilities to avoid post-harvest losses.

He also advises tobacco growers to avoid engaging minors in their activities, the conduct he described as illegal.  

“During these operations growers should not use children under the age of 18 years, for this conduct is against the rights of children. Growers who will be noticed using child labour, will have their licenses revoked and their tobacco will not be receipted at the auction floors,” warns Malunga in the statement.

TC also advises tobacco growers to sell their leaf at the Auction Floors other than to vendors in order to benefit from better market prices.

The Ministry of Agriculture has repeatedly complained over the increase in the number of illegal tobacco vendors who buy the leaf from farmers at lower prices to sell to the Auction Floors.

The Commission stresses in the statement to the general public and tobacco growers that tobacco vending is an offence under Tobacco Industry Act, and anyone caught in the act will be convicted by the court of law.

“The Commission reminds the general public and tobacco growers that tobacco vending is an offence under the Tobacco Industry Act and any person involved in the practice will be convicted by the court of law,” states Malunga..

Government through the Agricultural Development and Marketing Cooperation (ADMARC) has provided Auction Holdings Limited (AHL) with financial resources to ensure smooth running of operations at all the four AHL deports.

“In this regard, tobacco growers are being assured that all AHL Tobacco Auction Floors of Limbe, Lilongwe, Chinkhoma in Kasungu and Mzuzu will operate normally without threat that the industry remittances would be affected as AHL Group facilities are duly secured by AHL Group and Government,” says Malunga.

Malunga recently told Mining and Trade Review that the Commission will ensure that tobacco farmers are offered better prices for their leaf this season.

The Tobacco Commission (TC) says it expects an improvement in tobacco prices during this year’s selling season.

CEO Chidanti Malunga said in an interview that TC in coordination with the Ministry of Agriculture is doing everything possible to ensure that farmers benefit from their works by, among other things, ensuring that they are offered attractive prices.

He said one way of making sure that farmers are supported is by setting minimum buying prices every year for buyers to adhere to.

Malunga, however, expressed worry over the reduction in number of tobacco farmers who registered to grow the crop this season. Reports indicated that the number of growers this season has gone down by 5% when compared to the number of farmers who registered last season.

He, therefore, said TC has developed strategies designed to increase the number of tobacco farmers during the next growing seasons.

Tobacco Association of Malawi (TAMA) Spokesperson Sam Kalimba commented that the number of farmers interested to grow tobacco was declining because of low market prices for the leaf and World Health Organisation championed anti-smoking lobby.

Kalimba, however, said despite challenges the industry is facing, there is still hope for the local leaf which he said still enjoys huge demand. But he urged farmers to produce the leaf in line with trade demand and following all good agricultural practices.

“There is still huge demand for local tobacco and what is required is growing the leaf using good agricultural practices, including recommended labour practices,” said Kalimba adding that agricultural extension advisors are also critical in ensuring quality production by participating farmers.