Mining & Trade News

ABSTRACT

MET-CHEM Canada Inc., on behalf of MIDCOR, carried out a feasibility study on the techno-economic  evaluation of the feasibility of setting up an integrated alumina/aluminium plant based on Mulanje mountain bauxite. The study was undertaken in 1993 through funds from African Development Bank.

The results of the 1993 feasibility study show that a combination of probable and indicated reserves of bauxite amounts to 25.6 million tonnes using a cut off grade of 30% Al2O3. An annual extraction of 580 thousand tonnes of bauxite will produce  200 thousand tonnes of alumina which in turn will produce 100 thousand tonnes of aluminium through the use of Bayer process in Alcan P-180 cells.

The capital cost estimate for the project is estimated at US$ 820 million with an Internal Rate of Return (IRR) 7.4% for alumina and 6.2% for aluminium. The corresponding payback periods are 15 and 17 years respectively.

1.0     INTRODUCTION

Mulanje mountain bauxite is situated about 70 kilometres east of Blantyre city. On its foot is situated Mulanje Boma (district headquarters). A Tarmac road connects Mulanje Boma to Blantyre and a rail line from Blantyre to Beira passes through Luchenza township about 30 kilometres west of the massif. A 66 Kv electric line is available from Nkula Hydroelectric Power Station. Telecommunication system is very good.

The low lying areas around Mulanje massif experience warm to hot and humid weather with an annual mean temperatures of about 220 C. Annual mean maximum temperatures reach as high as 350 C in November in the Phalombe plain. The coldest month is July when temperatures reach as low as 10.8 0 C at Mulanje Boma.

2.0     DEPOSIT DESCRIPTION

Mulanje bauxite is a residual product which resulted from the weathering of syeno-granitic rocks that form Mulanje massif. Six extensive bauxitic areas have been identified, but the best deposits are found on Lichenya and Linje plateaux.

The bauxite is mainly a trihydrate gibbsite which lies over kaolinite and has free quartz and geothite as the main contaminants. Some of the quartz is semi precious.

A feasibility study conducted by LONRHO showed that the two deposits on Lichenya and Linje (Figure 1)amount to 28.8 million tonnes within an average depth of 4.5 metres.

Table 1 shows the average analysis of the bauxite:

Table 1: Mulanje bauxite analysis

The bauxite deposit exists in form of lenses which are located on the plateaux at an elevation between 1800 and 2000 metres.  The bauxite will be mined through the use of a front end loader and a backhoe hydraulic shovel will load it into articulated trucks.

The bauxite will then be hauled to a loading bay where it will be transported by a ropeway to an alumina plant about 600 metres below.

The proposed mining output has been set at 580 000 tonnes of bauxite (on dry basis) to produce 200 000 of alumina tonnes per year to meet an annual production of 100 000 tonnes of aluminium.

The bauxite will be processed to produce alumina and aluminium. Run of mine bauxite will be beneficiated to reduce the quartz content as well as reduce the quartz size to an undersized product below a 65 mesh size. Bayer process will be used to transform the bauxite into alumina.    The next stage will be alumina smelting producing 100 000 tonnes of aluminium sows per annum based on the Alcan P-180 cell.  The aluminium smelting will depend on the availability power inthe region of 15.3 kWh per kg of aluminium produced.  The present power supply in Malawi cannot meet this demand.

The main waste from the bauxite processing will be the tailings from beneficiation plant and the red mud from the Bayer process.  The red mud will be washed in high capacity wash thickeners to remove chemicals derived from the Bayer process.  The red mud and the tailings will then be pumped to a mud disposal area.

3.0     LABOUR AND INFRASTRUCTURE

The proposed labour for Mulanje bauxite is divided into mine and ropeway, alumina plant and alumina smelter as shown in the Table 2 below:

Table 2: Proposed labour for Mulanje bauxite

The above table includes 26 expatriates in the alumina plant and 29 in the smelter. They are expected to be in Malawi for a  period of up to 4 years.

The plants and residential areas will be supplied with water from a dam in the Likabula river.

There is enough electricity to supply the alumina plant, but for the smelter more electricity will have to be sourced elsewhere. Suggestions have been made to import electricity through inter connector grid through Southern Africa Power Pool.

4.0     PROJECT SCHEDULE

Mining companies finance their projects in several different ways. Projects can sometimes be funded by equity sharing or from cash reserves of a mining company debt. The most common type is joint venture which mostly shares the project risk. However, it must be noted that inorder to open a mine, billions of dollars are sourced and this depends on ore grade, tonnage, process plant design, geographical location in terms of accessibility etc.

       1.  Feasibility studies for mining projects as an Investment Decision

The law in some countries requires governments’ approval of mine feasibility studies like in the case of Malawi. Since it is the first line of reference, the government has a responsibility to the public to ensure that environmental health, safety (EHS) and social-cultural risks are properly managed and contained in a manner that serves the public interest. In other cases, government limits approval based on Business Plans and Environmental and Social Impact Assessments (ESIA). A Bankable feasibility study can also be a risk management measure. To demonstrate whether a project is technically feasible and financially sound and viable, some of the questions that can be borne in mind by the minng company on investment risk could include identifying the risks and how will they be managed, is the profit acceptable to the investor in terms of the Internal Rate of Return (IRR)? What will be the payback period? Can this project be done and is it sustainable? All these questions come because mining is a ‘notoriously cyclical industry’ which may deter banks from providing funds.

      2. The role of International Financing Corporation (IFC) in Mining

Some multinational mining companies  involve International Financing Corporation (IFC) , a World Bank Group which has demonstrated massive experience in providing finance and sustainable business solutions in the mining sector and contributes positively to mitigating environmental and social risk, providing advice on community engagement, and implementing shared-use infrastructure and mining projects across the development stage, including construction, production, and expansion, with a focus on impact investing for sustainable economic growth. Their advisory work facilitates such initiatives as supply chain linkages and stakeholder development in line with global best practices.The long-term competitive financing instruments meets project needs, including shared equities, corporate and project-level debt, and third-party source capital investments, ofcourse with some strings attached.

An example where IFC has demonstrated outstanding results is the IFC Report with Commonwealth Development on “Mining Royalties Data in Colombia”-Data at Work for the Voice of the people. It  presented a set of recommendations for governments, industry and civil society aimed at improving data disclosure and use practices of mining royalty data to provide citizens with complete, relevant and actionable information(December,2020).

In another development IFC announced in 2011 that it planned to invest about USD300 million in African mining operations over the following 3 years as from exploration stage to early equity mining stage with an intention to participate in project and corporate financing partnerships, supporting mid-tier mining companies.

    3.  Types of Project Funding and Financing

      (a)  Debt Avoidance

When companies operate at a profit, the board of directors makes decisions on how to use profits after tax. To finance capital projects during the operating life of a mine (LOM), a mining company may generate funds. These funds may be applied to all purposes: funding replacement capital and funding project capital for improvement projects, expansion and even extension of the Life of Mine. .

Financing new mines out of accumulated cash has the advantage of avoiding debt and interest liabilities and of keeping equity undiluted, i.e. no additional shares need to be issued as such a mining company has cash reserves.. However, mining companies discover certain mechanisms that can have an advantage of sharing risk alternatively. Therefore, it may seem very important to provide funding to new commissioned mines so that   other mechanisms can be employed to source the remaining cash requirements. Practically, most mining companies cost of construction does not wholly require resources from the company and must be funded in its entirety by any other means.

     (b)   Joint ventures (JV)

This is viewed as a useful risk-sharing mechanism. It may be a Joint Venture between two or more partners holding mining companies or with other companies, financial institutions or governments. Usually, in addition to funding, each participant provides other resources to the venture, in the form of specialized expertise and/or physical assets.  An example can be a mining company with a deposit, Resource model done, holding a mining Licence (holding primary assets) with feasibility studies done and perhaps a Bankable feasibility study. This primary asset holder usually proposes the structure of the JV, often retaining a controlling interest of 51% or more and another that will have secondary assets and can be a company that will in partnership holding less than 50%.

The structure of a Joint Venture is embodied in a contract legally provided for which may vary considerably. The agreement normally specifies how many executive and non-executive directors each party may appoint Other partners may be required to contribute funds at the initial stage and possibly at later stages of the contract, whilst other partners may have a carried interest, meaning an entitlement to future benefits of the project such as, expertise, grant of mineral rights by a government, dividends etc.

   (c) Debt funding

Banks and other types of financial institutions are willing to consider lending for new projects in Mining, and are, actively seeking investment opportunities .Mining being a relatively-high risk sector, it has two important consequences for borrowers: in that interest rates may be higher than for other sectors of the economy and also that Lenders or Lending Instiutions are likely to exercise caution considering the risks. It is for this reason that Due Diligence is a must meet requirement and is exercised  with caution meaning  financial institutions will take all reasonable measures to assess the risks and ensure that a project is both technically and financially viable before committing  to funds which they really hold in trust for other parties. Thus a feasibility study is of paramount importance at this stage…A financial institution may also engage consultants but typically a mining company will commission an independent review by appropriate experts who will sign off on a feasibility study, business plan or other document supporting a project proposal.

The professional integrity and reputation of the consultants provides all interested parties with assurance that their report is totally impartial, independent regardless of who is paying them, and gives a professional factual assessment of the project proposal.

Financial institutions also exercise care in ensuring that their funds are not applied to projects which may in any way be accused of human rights violations, abuse of the environment or other aspects of life which are likely to attract negative media and Non-Governmental Organizations (NGO) comment. Of interest to note is the Equator Principles of which some countries are signatories which is, an international convention providing a minimum standard for due diligence in risk-based decision-making regarding loans in all formats, covering social and environmental protection, including climate change and in some countries, such as Australia, there are requirements for guarantees of protection of the rights of indigenous communities. Lenders will therefore review the history of a company making loan application, its assets and proven level of competence and will make a decision, and possibly fix interest rates, taking account of those factors.

   (d)  Equity

In order to raise funds without resorting to debt finance, or in combination with it, companies have the option of offering equity, i.e. an opportunity for other parties to participate by investing in shares. A new company just embarking on a mining venture, could be a Junior, might be offering shares or making IPO (Initial Public Offering) .The stock exchange may chose it for listing at the stock market may be in the mine’s host country, the country where the company is headquartered, or another venue, and a listing may be sought on more than one stock exchange. An existing company requiring to raise funds beyond its internal capacity may also offer a special issue of shares, with priority being given to existing shareholders.

The parties investing in shares may be individuals or different organizations, including governments. Other companies or organisations might decide to invest venture capital, i.e. funds invested in a situation where the risk is known to be relatively high and there is anticipation of good rewards and shares may be preference shares which have priority when dividends are declared, and in the disbursement of funds from disposal of company assets.

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 has abundant natural resources as one of the extractives and yet gains little tax revenue from the extraction of its resources, leading to lost opportunities to invest in public services such as education and health which are essential in tackling poverty. Multinationals/Privately owned companies are always caught up dodging in paying their fair share of taxes to host governments. In Malawi, there might be a considerable calculated amount that is avoided by mining companies only that it is not exposed. Prominent companies that were/have been in the playing field are exploration companies who do not owe much to the government because they are not yet into mining, the Kayelekera Uranium Mine(KUM) now under Lotus Resources, Cement and Coal companies just to mention at the moment. There have been complex reporting by OXFAM on details of tax avoidance including mispricing/dodging, production sharing agreements of oil/gas blocks. The report also describes other ways in which Malawi loses out on tax revenue, including illegal tax evasion by companies. One aspect of tax avoidance is the lack of access by government officials to information on company operations, production and pricing.

Combating tax dodging strategies will require adequate government capacity and expertise which currently does not exist in Malawi. With such developments, so many billions of kwachas are lost where if it was realized by the government, money could be spent on essential public services such as health and education. There is a heavy public outcry from civil society over lost tax revenues in Malawi and the nation hasn’t seen any action by the government to address how mining companies in particular avoid tax. There is need to reform the tax system although there can be resistance from mining corporations. An example is Zambia where when there was an attempt to introduce reforms in tax systems in mining, multinational companies threatened to cut thousands of jobs and billions of dollars of investment. The IMF also expressed concern over the impact of the measures and the impact of lower global commodity prices on government revenues. This pressure had an effect and the government rolled back on the proposed new measures.

Malawi is earning very little from mining and one of the contributing factors is the proliferation of illegal gold mining. During the SONA (State of Nation Address) by the State President Dr Lazarus Chakwera made during the official opening of the budget meeting of the National Assembly in 2020, it was alleged that about 85 million US dollars is lost by smuggling/exporting gold that finds its way to points of sale to the Middle East annually and this drew mixed reactions from stakeholders in the mining sector. In other countries, a string of NGO, media and academic reports in recent years have highlighted how mining companies, while producing a large amount of minerals, have been paying few taxes to the government.

1. Corporate tax avoidance

There are various reasons why mining companies pay lower taxes than they should, but one major reason is corporate tax avoidance. In most African countries the mining industry is identified as the biggest culprit in tax avoidance. The reason is that most of the mines for one reason or another always claim that they are making losses. Most of it is due to transfer pricing or tax avoidance. It is therefore very important for countries to develop laws that will criminalize false reporting. Mining companies avoid paying tax by means of two methods. One is through transfer pricing – the widespread practice whereby parts of the same company trade with each other at artificial prices determined by themselves, to minimize taxes. The other is that some parent companies lend money to subsidiaries at interest rates higher than market rates, in order to inflate costs and reduce taxable income. This in essence makes companies to be presented with a variety of ways to avoid paying tax, including over-reporting of costs and under-reporting of production.

2. Tax evasion

The big global mining companies are robbing the opportunities for the countries to advance. In addition to legal methods of tax avoidance, countries lose more revenues from illegal tax evasion. US-based organization Global Financial Integrity, which has pioneered recent research into illicit financial flows, estimates that some billions of US dollars from other countries must have left from the proceeds of crime, corruption and tax evasion. If this money were taxed at the prevailing corporate tax rate, it would increase the countries revenues. Some illicit outflows is attributed to trade misinvoicing, a process that deliberately misreports the value of a commercial transaction on an invoice submitted to customs. This form of trade based money laundering is the largest component of illicit financial outflows measured by Global Financial Integrity and is sometimes facilitated by global tax havens.

3. Tax incentives

Tax incentives given by the government to companies, especially in the mining sector, are another cause of lost revenues. Government offers a bunch of tax incentives to domestic and foreign companies. For example in other African countries companies investing over a certain amount pay no taxes on profits for the first five years, along with no import duties on raw materials, capital goods, machinery including dump trucks and specialized motor vehicles. Mining companies are entitled to 100% capital reductions on mining equipment and preproduction capital expenditure, the ability to carry forward losses and offset them against tax, and a rebate on import duties for certain mining equipment. In addition, all companies investing over certain million US dollars are entitled to negotiation with the government for additional incentives, thus all mining companies are given special tax deals. This is a major reason why many mining companies consistently declare tax losses. Malawi signed one of the funniest deals for a 10 year tax holiday with Paladin Africa Ltd, a company that held the Kayelekera Uranium Mine and yet production was run for less than 10 years until it was placed under “Care and Maintenance’

4. Key tax avoidance strategies

Companies seeking to avoid paying tax can use a number of different strategies. The key is for the government authorities to stop them doing so. Officials face problems with four key tax avoidance strategies.

(a) Transfer pricing abuse

In light of the fact that the global mining industry is dominated by multinational companies trading between different operating units in different countries, companies can reduce their overall tax payments by selling goods and services from an operating unit in a low tax jurisdiction to one in a higher tax jurisdiction at a relatively high price, transferring income away from the high tax jurisdiction.

 (b) Under-reporting production values

Mining companies report to the tax authority that their production is less than the market value. In such situations, they can under-report the volume of production or the grade of the mineral. A problem for the government is to check the quality and content of all production line which requires an understanding of the geology of the area being mined and the processing technology employed which requires close cooperation between the mine and the tax authority in providing sustainable checks and balances. This process becomes complicated by the often complex value chain involved in large-scale  mining like copper, where some refining and/or smelting is often carried out by separate or associated companies and elements of the potential tax base can be transferred.

(c) Interest payments on debt

 Involves deductions from profits when determining taxable income. This creates an incentive for a company to lend funds to a subsidiary at a high interest rate in order to reduce the subsidiary’s taxable profits.

(d) Purchase of derivative contracts

Mining companies that face volatile prices of their product, can guarantee a specific price for their output in the future. This acts as an insurance against a fall in the price of the commodity. It becomes a legitimate business activity but can also be used to shift income out of high tax jurisdictions. In this case, firms can deliberately trade in order to lose money in a subsidiary facing a high tax rate and to gain in another subsidiary facing a lower tax rate.

To combat these policies, it requires adequate government capacity, which in most cases does not exist. The trickiest part is that no one, except the mining companies themselves, knows what the costs of production really are and that it is not possible to determine how much return the mining companies make. Furthermore, excessive lack of resources and efforts by mining companies to hide data and manage perceptions leaves most states with virtually no information on the operations or production of the mining companies. Greater capacity and expertise is needed not only to monitor the mines’ production and accounts but also to propose different tax designs during the course of negotiations with companies. Ofcourse in other countries there may be support from donors/lenders to increase tax capacity in a form of cooperative programmes. It is on record that this also happened between the IMF, the Norwegian government and the Zambia Revenue Authority at one time.

LAND AND ITS PEOPLE

Malawi is situated in south-eastern Africa and shares its boundary with Mozambique, Zambia and Tanzania.

The country occupies an area of 118,484 square kilometres and has a population of nearly 18 million.  About 20% of the population lives in urban areas.

The main official languages are English and Chichewa.  The warmth and hospitality of the Malawi people earned the country a name “The warm heart of Africa”.

His Excellency the president, Dr. Arthur Peter Mutharika, acknowledges the need to diversify the economy of this country through the development of the mineral sector. The investor is encouraged to venture into this sector which already consists of a disciplined mining labour force that has wide experience from South Africa, Zimbabwe, Zambia and Tanzania.

ECONOMY

Malawi has an open economy and the government’s role is to facilitate and regulate private investment to increase current mining contribution to GDP from 3% to 20%.

Malawi government’s pursuance of stable macro-economic policies by exercising fiscal and monetary discipline has encouraged the stabilisation of the Kwacha currency and the decrease in inflation rate from of 21.8 percent in 2016 to a current figure of about 9%.  The Kwacha is now one of the most stable currencies in Sub-Sahara Africa. Mining will contribute substantially this year from post Kayelekera Growth Domestic Product of 1% to about 4% due to increased activities in exploration and mining.

Malawi’s prudent economic management supported by more transparency in tracking revenue and expenditure has led to reduction in bank interest rates from 25% in 2018 to a current 15%.

EXPLORATION AND MINING OPPORTUNITIES

Exploration work continues to intensity since the 2013 – 2014 national airborne geophysical survey identified potential exploration targets for gold, platinum group metals (PGMs), nickel-copper-chrome, rare earths, bauxite, vermiculite, kimberlites, sulphide-gold-graphite, base metals and coal-uranium-petroleum.

Geological maps, magnetic contour maps, radiometric maps, electromagnetic maps, airborne geophysical interpretation maps are available at Geological Survey in Zomba.  These offer excellent support to exploration activities.

Minerals which require feasibility studies include Linthipekaolinitic clay, Mchinji and Lake Chiuta glass sands, Tengani and Lake Shore heavy mineral (titanium) sands,Kangankhunde rare earths (monazite), Chimutu graphite andMalingunde graphite, Tundulu rock phosphate.

Bankable Feasibility Studies are being done for Mabulabo niobium deposit (Mzimba), Songwe Rare Earths (Phalombe) and Malingundesaprolite graphite (Lilongwe).

Mining activities include coal in Rumphi and Karonga, Limestone for cement production in Kasungu and Mangochi; and semi-precious stones in Ntcheu, Mzimba, Rumphi, Chitipa, Mangochi and Chikwawa (corundum, aquamarine, amethyst and agate).

Kayelekera Uranium Mine is under Care and Maintenance since June 2014. Construction of nuclear energy plants in China, India, United Kingdom and United States of America are giving hope to increased demand for uranium and improvement of prices.  This gives hope to reopening of Kayelekera mine in the near future.

ATTRACTIONS

Government no longer neglects exploration and it has increased exploration expenditures.

Malawi has a new Mine and Minerals Act (2018) replacing the 1981 Act. A mining taxation Act was enacted in 2016 and offers a stable regime for 10 years to support the new Mines and Minerals Act.

The legal framework now adequately defines the investor’s rights and obligations to encourage community benefit sharing within a radius of 20 km.

Security of tenure is guaranteed to give maximum security to the investor e.g. protection against loss of mining rights. The Mining Cadaster system has been put in place to firm up accountability and transparency in grant of mineral rights. Malawi is member of Multilateral Investment Guarantee Agency (MIGA) and subscribes to International Centre for Settlement of Disputes.

Access to foreign exchange and repatriation of capital and profits are guaranteed after satisfying tax obligations.

Government continues to provide basic geological, legislative, economic and fiscal data.

Minimum ministerial discretion is practiced thanks to a capable Minerals Licencing Committee under the Comissioner of Mines and Minerals. Malawi continues to improve its road and telecommunication networks INSTITUTIONAL SET UPTHE MINISTRY OF ENERGY AND MINING:- This is responsible for broad policy direction on mining and legislation. It coordinates with other ministries on minerals, energy and mining issues. DEPARTMENT OF MINES:- It issues licences and administers exploration and mining licences.  It compiles production statistics and inspects exploration, mining and environmental work compliances. GEOLOGICAL SURVEY DEPARTMENT:- This undertakes reconnaissance geological mapping and mineral exploration.  It publishes geological bulletins, maps, and technical reports.  It is also responsible for compilation and maintenance of geological data base. MALAWI INVESTMENT ANDA TRADE CENTRE:- Other support institutions include Malawi Investment and Trade Centre (MITC) which helps register companies and negotiates investment incentives for the companies thereby streamlining the investment process.

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.

There are two to three types of wastes that are generated by mining activities. These are Waste Rock that is stored, secured in waste dumps and can be used as fill material, road construction and other infrastructure, Processed Rock commonly known as Tailings (containing chemicals) that is stored in construction facilities and where possible, these chemical solutions together with pulverised rock are    recycled in order to be used before being pumped into the storage facilities and also Mine Water which will not be discussed in this article.

1.            Mine Tailings

Mine tailings are finely grounded residual materials that remain after removing an ore of economic value from a process plant. Tailings is usually a by-product of mineral recovery processing and is mostly in form of liquid slurry made up of very fine particles from crushed, grounded, and processed with water and possess no any financial gain at the point of disposal. Tailings are processed from the mill and are diverted to storage built structures that are commonly referred to as Tailings Storage Facilities (TSF).

These storage facilities are in form of dams, embankments and other types of surface impoundments. It must also be noted that the material that goes to tailings facility might also contain significant amount of metal due to very poor recovery and that at some stage some mining companies may wish to reprocess to recover it, although this is not a common practice in most mine ore processing.

2.            Tailings Management

Tailings are usually stored using the most effective way inorder to meet specific regulations and standards. It must be noted that tailings structures are built in a differing fashion to suit a particular environment and specific mineral processing method. The ground conditions and   the environment are the most crucial parameters that control the storage of tailings hence geotechnical analysis at feasibility study is of very fundamental importance.In cases where    tailings do not contain substances that are harmful or toxic, water is sometimes diverted inorder to retain the physical stability of the facility by way of covering with soil, reshaping and planting vegetation cover and subsequently put into land use in the long term.

Tailings management is the primary responsibility of a mining company both during and after mining operations. Subject to advanced statutes, tailings management needs to be very cost effective throughout the mine life even beyond post closure period. Management of tailings include enhancement of mine workers on safety and health and also the nearby surrounding communities, developing new approaches for environmental protection, devising new ways of assisting the communities etc.

3.            Tailings Dam Failures

Tailings dam failures are caused by numerous factors among others the most occurred from past experience include:

(a) Unusual rainfall

? Too much rainfall leading to oversaturation thereby yielding rainwater that can overflow carrying with it the tailings away from the dam onto the downslopes.

(b) Foundations and Structure

?This can be caused by design errors, structural inadequacies and failed decantation. Also foundations with insufficient investigations that fail to guide enough support to the weight of the dams.

(c) Seismic liquefaction due to earth tremors/earthquakes

? Structure is destroyed by continuous shaking of the ground motion and since dams are designed to withstand such vibrations, there is instability created if the movement is larger than anticipated.

(d) Subsidence of the mine

? Sometimes the dam is built above an underground mine; the underground mine may collapse and the mine workings can absorb water and overflow when the subsidence is filled to capacity.

(e) Seepage and Erosion

? Due to rainfall, there may be erosion of the face of the dam that may be difficult to maintain or repair. Besides, erosion of dam/embankment materials due to seepage or underground drainage to areas that were designated as dry, may cause dam failure.

In all these causes of dam failures, the potential impacts is on biodiversity and associated ecosystems. These, in the long run cost companies massive financial compensations and also reconstructions projects to stabilize the dam structures.

4.            Examples of Tailings Dam failures for the past 5 years

Worldwide, there have been numerous catastrophic dam failures over the years. The most recently noted is the deadly dam burst due to mudslide at the Corrego do Feijao mine in Brazil operated by iron ore mining giant, Vale and happened in January, 2019. It is alleged that 13 Vale employees and a German Auditor TUV SUD are involved in a tussles where Brazilian Authorities are accusing them of fraud by presenting fake documentation backing the dams’ stability where about 250 people were nearly killed and mine waste tailings (about11.7 cubic metres) spilt all over to close by mining towns and the countryside below. It is also alleged that homicide and environmental damage case could not be ruled out. In another development, Vale has set aside $107 million for compensation and also projects to spend $471 million on dam stabilization projects by 2023.

On the same note, there have been tailings dam failures in Brazil like the Samarco iron ore dam failure mined by a giant BHP Billiton that killed 19 people, displacing 700 people and the Doce river valley was highly devastated and contaminated in 2015. This was considered the worst environmental disaster. Following this catastrophe, a lawsuit was served at Liverpool high court by a law firm SPG and over 200,000 Brazilians claimed damages of about $5 billion which was the largest in United Kingdom’s history.

In Canada, the Mount Polley gold and copper Mine run by Imperial Metals Corp collapsed in (2014) where toxic water from the mine tailings spilt over the Lake Polley. About 24 million cubic metres of tailings waste and sludge was deposited into nearby creeks causing an environmental concern and charges related to Fisheries Act were to be laid down under the Federal Law. These are but only a few examples of dam tailings failures and if these are not properly managed, they bring huge financial costs and implications to the mining company and great care should be exercised when operating these structures though some of the causes are natural in nature.

5.            Waste Rock

Waste rock is unwanted rock material that has been removed/excavated from the pit after mining and does not have a metal content of economic value. Waste rock is also a high volume of material that also may originate from chemical processing of metalliferous and non-metalliferous minerals by either opencast, adit and underground mining .The waste rock may however contain metal that is too way far below the cut off value. Usually the volume of mine waste is larger than the metallic ore and this mostly depends on the stripping ratio (ratio of waste to ore).  For example, a stripping ratio of 4:1 means that 4 tonnes of waste rock needs to be mined inorder to mine 1 tonne of ore. Generally, in open pit mines, the stripping ratio is on a higher side than in an underground mine for the obvious reasons and the waste rock is often stored close to the mine to minimize transports. The waste rock is deposited in stockpiles.

The amount of waste rock that needs to be removed from the pit depends on the rock geometry, location of the ore body along with the mining method used, the composition and stability of the rocks as well.

6.            Environmental impacts of waste rock

Mined waste covers a considerable area as such, issues of groundwater contamination are very common. In most mines, mining waste rock is also used as an earth road/work fill material and this can be a long term potential water contaminant.

However, when the rocks contain certain minerals in enough quantity combined with poor management of the waste, it can become a large risk to the environment and health of local communities. In some cases, the mine uses certain chemicals such as cyanide in the processing stage. These chemicals often account for a small volume of the total waste, but can pose a large risk due to their high toxicity.

In areas where coal mining takes place, the rock waste contains sulphurous compounds that are susceptible to Acid Rock Drainage formations. This causes both ground and surface water contaminations. Sulphide minerals are easily weathered when in contact with oxygen. When sulphide minerals break down, they can produce acid water. The acid water further speeds up the weathering of the minerals, called chemical weathering. The result is an acid water with high metal content. This is now referred to as acid rock drainage (ARD) or acid mine drainage (AMD).In terms of groundwater, the acid leachate affects water quality due to high concentrations of some elements in the saturated zones

7.            Managing Waste Rock

?            Included in the Environmental Management Plan.

?            Environmental audit and inspections are vital

?            Following relevant legislative guidelines on environment

?            Consider future landform uses e.g. during rehabilitation and post closure period.

?            Development of infrastructure e.g mine roads, landfills, buildings.

?            Erosion maintenance

Another Management is to adopt a risk-based management approach. The risk management process is based on Risk Assessments. The risk assessment identifies risk pathways (unwanted event and the associated environmental receptor/factor), which may cause material impact to key environmental factors. It also identifies the level of uncertainty associated with a risk pathway, which can be low, moderate or high depending on the degree of uncertainty.

Value addition is the enhancement added to minerals by a company/miners before selling to customers. It is a secured scenario whereby one obtains the highest rewards from a mining or related mining entity and it may be from mining practice to the finished product, in short enhancing the quality and quantity of the chain of production. There are numerous aspects related to value addition when it comes to mining. The higher value added products mostly fetch high prices and these prices tend to be more stable and value addition is also pursued further.

Processing of raw materials is the solution to African economies. Africa is especially vulnerable to global economic shocks because primary products account for more than 50% of the value of exports. It is therefore apparent that Malawi needs to be able to process its minerals into high value products for exportation and local consumption and this will translate into economic growth.

Mineral wealth should be a source for equitable growth and poverty reduction. Malawi has wealth in minerals and most of these are not yet fully exploited and utilised. A case in point is China which has experienced rapid transformation economically. All this phenomenal growth hinges on the availability of cheap raw materials from Africa. In value addition of minerals, suppliers of mining inputs and markets are also important to the enhancement of high quality and increased quantity mineral production. In anticipation of greater returns miners must also be aware that opportunities of accessing the incentives more than once is possible and may be achieved, by carrying out value addition activities where applicable, as valuable by products can be reclaimed, and further processed for export, meaning more foreign currency inflows to the nation and more money to the miner respectively to say the least.

Economic growth is a result of value addition that creates wealth for nations. Nations utilise the gifts of nature which are the raw materials to manufacturing. Africa has abundancy of these natural resources but lacks appropriate economic development due to lack of scientific knowledge. In the worst case, raw materials are extracted from Africa and exported in their raw state at very low prices. Value addition or processing is done outside the countries of origin and the finished goods or processed materials imported as finished products that attract more money. The importation at high prices opens the gap between poverty and wealthy nations. This unavailability of such technologies is quickly capitalized by rich nations who already have the technology but do not have adequate raw materials in their nations. Such a scenario creates exploitation of natural resources from African nations such as Malawi.

In Malawi the most minerals that have the potential to add value are;

1. Dimension Stones

Dimension Stone is produced from quarrying operations that typically involve isolating a mass of stone by cutting it free from the parent mass on all sides but one. The isolated mass is then lifted or separated from the parent mass by breaking it free or by undercutting it with a wire or chain saw. The cut stones are usually of larger block size. Quarry operations thus involve cutting the stone, breaking the stone, and removing the stone from the quarry.

• Uses of dimension stones

In Malawi, rough block production represents a very small percentage if at all it is being done. Dimension stone blocks are used mostly in construction and to make monuments, tombstones. On the other hand dressed stone is used to make other decorations such as carvings, statues flower vases but this is very rare in Malawi.

Dimension stones can also add value by shaping them into desirable use.  Examples in Malawi are the black/ pink granites, sodalites, syenites, amazonite,gabbros that are used to make floor, wall tiles by means of lapidary processes not forgetting limestones for terrazzo making for use in monuments and tombstones.

• Gemstones

Gemstone dealing is a multibillion dollar industry but it is usually underestimated in Malawi. This may be probably due to lack of understanding of the potential of extracting these gems, inability to identify ready markets, lack of machinery and also the skills to deal with it etc. It is a rewarding business that has the potential to create huge job opportunities, non-bulky, foreign currency generation, stimulates other economic sectors; such as tourism and also provide safe investment.

In Malawi, efforts have been made to mine gemstones like sapphire, ruby, amethyst, rose quartz, garnets, aquamarines, beryl, corundum , tourmaline etc. and are shaped into different forms for jewellery, cabochons, sculpture, and ornaments inorder to add value but unfortunately it is done only to a smaller, unrecognised extent.

• Problems faced by the gemstone Industry in Malawi
• Gemstone buyers often offer very low prices
• Lack of systematic approach to description and evaluation of gemstones in order to buy, sell and appraise coloured gemstones appropriately and profitably.
•  Lack of capacity to process the stones into jewellery.
• Lack of capacity to grade, evaluate and negotiate the right price for stones.
•  Lack of a well-coordinated system of buying and marketing gemstones from the miners, hence the sector suffers from smugglers from neighbouring countries and beyond.

• Unavailability of gemologists as the most competent experts in undertaking gem valuation. Malawi has only but one or two.
• There is some hostility in gemstone mining between villagers and operators. Sometimes customary land owners or ordinary villagers do not want to give access to operators even if they possess the necessary permits from the Mines Department.

• Industrial Minerals

These are a variety of minerals such as, gypsum, limestone, graphite, quartz and vermiculite that have a wide range of applications in ceramics, pottery, and brick and tile-making, phosphates, mica and glass manufacture rutile, quartz, feldspar, graphite, kaolinitic clays, dolomitic limestones mica, and silica. These are economically of high quality and can add value to the nation. However, it still remains of very low use in Malawi both industrially as local and for export.

In addition, there are some metallic/industrial minerals that are brought into various shapes for sale thereby also adding value. Of late, the emergence of gold in Malawi is a big potential and a boost to add value to the industry by making jewellery, electroplating, house decorations etc.

• Malawis’ mineral resources are finding it hard to add value in the supply chain due to among others;
• Poor quality of minerals like gemstones, 
• Knowledge, skill gap in exercising expertise e.g faceting, lapidary.
•  Inadequate quantity of minerals
• The role of middlemen and also buyers
•  Undervaluation of the minerals
• Smuggling
• Lack of machinery and equipment for both mining and mineral processing

• What needs to be done to Malawi as a Nation to boost value addition to minerals?

•  Robust government recognition of the sector’s potential
• Export of rough gemstone in large quantity
• Quality control
• Attain knowledge in mining, sorting and grading
• Create investment opportunities in mining
• Local Artisanal miners should have easy access to capital and land for mining
•  Support  lapidary shops/factories for their establishment
• Adequate laboratories for mineral testing are needed
• Train more gemologists, stone cutters.
• Adopt mineral added value policies from other countries

Mineral resources that add value are not only considered as the source of national income, but also as national asset to boost national economic growth. Implementation of sustainable mining can be translated by conducting good mining practices with emphasises to carry out an environmentally sound mine operation and also mineral beneficiation is an effort to improve the sustainable use of mineral resources. Most of the minerals in Malawi remain untouched and this also hinders advancement for value addition. If this scenario remain stagnant, value addition shall not succeed in the current and near future as well.

Medical Geology is defined as the science dealing with the relationship between geological factors and health problems in humans, animals and plants. It is an emerging interdisciplinary scientific field studying the relationship between natural geological factors and their effects on human and animal health.The Commission on Geological Sciences for Environmental Planning defines medical geology as, “The science dealing with the influence of ordinary environmental factors on the geographical distribution of health problems in man and animals. There is a body called The International Medical Geology Association (IMGA) which aims at providing a network and a forum to characterize the properties of geological processes and agents, the dispersal of geological material and their effects on human populations and there are a series of conferences called MEDGEO that are held by IMGA once in every two years.

1.Branches of Medical Geology
Medical geology can be split into two primary branches based on the number and variability of element sources within the environment. The first branch is strictly related to the natural occurrence of elements in the geologic environment (e.g., ingestion of food grown in soils with either element deficiencies or toxicities), whereas the second branch relates to elemental occurrence relative to natural hazards (e.g., earthquakes, volcanic eruptions, flooding and landslides)

2.Geology
The geology of an area has a direct impact on the regional input of elements into the soil, air and water. In turn, these inputs, depending on composition, may result in adverse health effects in humans, animals and/or plants. Health issues related to a region’s geology are visible in both humans and animals on almost every continent. The diverse geographical and geochemical source of human foods in developed nations creates a “homogenized diet” reflecting materials grown on a range of soil types, each with different chemical characteristics and potentially imported from a number of countries. As a result of this complex sourcing mechanism, element deficiencies or toxicities are generally rare in regards to dietary intake. Additionally, element imbalances in the soil are often amended before the growth of crops, thus eliminating any subsequent problems. Thus, trace element deficiencies and/or toxicities that are a result of geological conditions are much easier to identify in animals and people in developing countries since much of the food and water ingested is obtained directly from the surrounding environment.

According to Davies T.C.2010, a large body of evidence points to signi?cant health effects resulting from our interactions with the physical environment and we continue to recognize connections between geological materials and processes and human and animal disease. In Africa, these relationships have been observed for many years, but only recently have any real attempts been made to formalize their study. Africa is a continent with a diverse geography, characterized by a range of altitudes, a peculiar hydrological network created in part by the formation of the Great Rift Valley on the eastern ?ank and arid lands typi?ed by the Sahara and the Mega Kalahari. Volcanic activity accompanying rifting and formation of most of the highlands and mountains has released various trace elements, mostly above background levels, into the environment. A unique distribution pattern of these elements has developed in more recent geological times, following pronounced separation due to extreme tropical conditions of weathering, leaching and eluviation. It is therefore possible to delineate large areas of the continent containing element de?ciencies or toxicities, which are closely related to the local geology and/or geographical location. In a region where rural communities are still largely dependent on water and food sources that are locally derived, the above setting provides an attractive opportunity for studying the in?uence of geochemical factors on the distribution of diseases in man and animals.

3.Selected Studies on Medical Geology
There are various studies on medical geology which include, but not limited to environmental geochemistry and human health, water and human health, soil pollution and remediation, atmosphere pollution and human health. Studies associated with analytical methodology, medical geology in toxicology and epidemiology, medical geology, public health and regulatory sciences just to mention but a few. The geology and tectonic characteristics constitute an appropriate environment for the presence of toxic and heavy metals. The rapidly expanding field of medical geology deals with the relationships between natural geological factors and health, both human and animal. It also aims to improve our understanding of the ways in which the geological environment has an impact on the geographical distribution of health problems. There have been books from the work of various cross cutting geoscientists and medical/public health researchers that have addressed health problems caused, by geological materials ( atmospheric dust, lapilli tuffs/volcanic ash,minerals, rocks, and water) and processes earthquakes). Among the environmental health problems discussed in the volume are: human and animal exposure to toxic levels of trace essential and non-essential elements such as mercury, arsenic, trace element deficiencies; exposure to natural dusts and to radioactivity; naturally occurring organic compounds in drinking water; and the effects of volcanic emissions. Examining the positive side of the equation as well as the negative, the book also deals with the many health benefits of geologic materials and processes. It provides examples from different continents as well as a state-of-the-art review of the latest developments in the medical geology. The authors are all recognized geoscientific and medical experts working in the fields of geology, geochemistry, pathology and medicine, veterinary, biology etc.

In trying to highlight an example where medical geology has made an impact, there have been high levels of geogenic cadmium (Cd) found in some soils of Jamaica, particularly in the central part of the island. The potential health impact on residents who consumed foods grown on these soils was determined and food which have shown the greatest affinity for Cadmium uptake are mainly green leafy ones. Besides, the tropical terrains of the Indian subcontinent and the neighboring regions also provide some of the best examples in medical geology where the impact of the geosphere on human health is markedly seen and identified. The impact of the natural environment on human health has been a subject of study in China for thousands of years to date. China’s varied geology and geography and its large population living off the land have resulted in the presence of virtually every known environmental health problems related to medical geology.

There is a close relationship between medical treatment and geology. Worldwide, there are more than 10 million new cancer cases each year, and cancer is the cause of approximately 12% of all deaths. Given this, a large number of epidemiologic studies have been undertaken to identify potential risk factors for cancer, amongst which the association with trace elements has received considerable attention. Trace elements, such as, arsenic, cadmium, selenium, zincand nickel, are found naturally in the environment, and human exposure derives from a variety of sources, including air, drinking water, and food. Trace elements are of particular interest given that the levels of exposure to them are potentially modifiable. In this review, we focus largely on the association between each of the trace elements noted above and risk of cancers of the lung, breast, colorectum, prostate, urinary bladder, and stomach. Most studies have reported no association between selenium and risk of breast, colorectal, and stomach cancer, and between zinc and prostate cancer risk. There is compelling evidence in support of positive associations between arsenic and risk of both lung and bladder cancers, and between cadmium and lung cancer risk.

In another example where medical geology has been applied is the increasing use of pesticides and chemical fertilizers, especially the fertilizers with nitrates compounds, which have been common for the increased production of agricultural crops, has caused the nitrate pollution in the (soil, water, and environment). They have caused a lot of damage to humans and animals. Accumulation of nitrates in different kind of vegetables such as; green pepper, tomatoes, egg plants, watermelon, cucumber, and red pepper have been studied in some geographical areas and analysis of the samples was sent to the soil and water laboratory. The final results from the chemical analysis of samples showed that the mean levels of nitrates from the samples of the fruit crops in the those areas were all lower than the critical levels but from nutritional point of view it is argued that these quantities of dry matter do not constitute a health problem in humans.

In ecotoxicology and Environmental studies carried out in fast developing cities in China, risks related to heavy metal pollution in urban construction dust fall were highlighted. There is high metal pollution levels of road construction, there is a significant correlation of lead and zinc metals in road construction dust. The studies also showed that metals in construction dust fall pose higher ecology risks even at Wuhan.

All of the above studies show that knowledge of geology and geomorphology is essential to understanding, and thus eradicating, or preventing, a range of environmental health problems.