Mining & Trade News

The impending sale of the Kayelekera Uranium Mine in Karonga has triggered panic among the workers of the mine who are not certain of their future when the new owners take over the mothballed mine.

The Ministry of Natural Resources, Energy and Mining has given consent to Australia’s Paladin Energy to sell its 85% majority shareholding in Kayelekera to Lotus Resources Limited Pty Limited, a subsidiary of Hylea Metals Limited (ASX: HCO).

In an exclusive interview with Mining and Trade Review during a recent visit to the mine, Kayelekera employees said they want Paladin to retrench and pay them their terminal benefits before they sign fresh contracts with the new owner of the mine.

“We were told that our contracts will be intact regardless of the ownership changes but we are in panic because we do not know what the new Company will offer. Many of us have been working here for over 10 years and it will be fair for Paladin to give us our dues before they leave,” said one of the employees who pleaded for anonymity.

He explained that the employees wrote a letter to Paladin management, which was signed by about 50% of the members of the workforce, but the Company is dilly-dallying to give them feedback.

The Kayelekera employees, therefore, urged “the Government to come to their rescue on the issue as they have proven powerless to demand their labour rights from Paladin.”

But Paladin General Operations Manager Mike Hoey parried down the demands from the workers saying since Lotus Resources are purchasing Paladin Africa as a going concern, all existing entitlements will be transferred to the new owner.

Hoey said: “We will follow the country’s labour law that mandates the transferring of the employees to the new owner when you are selling an entity. Both Paladin and Lotus will continue to comply with all relevant Acts and Legislation of the Republic of Malawi.”

Meanwhile, Paladin has quashed allegations by some members of the community that it is polluting the nearby Sere River.

Speaking during a media tour to the site organized by Ministry of Natural Resources, Energy and Mining, Kayelekera Senior Environmental and Compliance Officer John Msachi explained that the Company follows all the procedures as spelt out in the country’s regulations and internationally set standards in handling uranium.

Msachi said: “We do not just dispose uranium into the environment.  We even take that water that we think is contaminated with uranium back into the processing plant for extraction of uranium deposits. Before disposing the water used for processing of uranium into the river, we make sure that the value of uranium is not beyond the standard which is 0.30.”

He also explained that the company undertakes regular environmental monitoring activities and produces regular reports that are submitted to the Government through Environmental Affairs Department.

The reports include: Annual environmental; Quarterly data reports; quarterly license compliance reports and; monthly data reporting – from joint Paladin/Government of Malawi monitoring programs.

Paladin has three water treatment ponds at Kayelekera and also planted grass and trees at the site.

“We use native grass and trees from the area and also monitor the rehabilitated areas for sustainable and self development post mine closure and water post closure for about five years as the area consolidates,” he said.

Spokesperson for the Ministry, Sangwani Phiri commended Paladin for proper management of the environment at Kayelekera.

 “As we have seen after touring the area, no any poor disposal is being made here,” he said.

In the Kayelekera buyout deal, the Malawi Government will retain its 15% stake in the uranium mine.

Lotus MD Simon Andrew said in the statement that following consent granted by the Ministry of Natural Resources, Energy and Mining, completion of the sale remains subject to customary terms and conditions, including Reserve Bank of Malawi (RBM) approval, which is expected to follow.

Kayelekera hosts a high-grade uranium resource with an existing open pit mine but Paladin suspended mining at Kayelekera in 2014 following a slump in global uranium prices.

The mine has since remained on care and maintenance as directors anticipated a pickup in global uranium prices.

The stake in KUM, according to Paladin will be sold for US$5 million (about K3.7 billion), comprising $200 000 (about K148 million) in cash and $4.8 million (about K3.5 billion) in Hylea shares which will be issued to Paladin.

There is uncertainty over the reopening of Ilomba granite sodalite mine in Mbilima, Chitipa as the people of the area through a civil society group dubbed the Concerned Citizens of Chitipa (CCC) have put their foot down that the mine will not reopen until the investor honors Corporate Social Responsibility (CSR) obligations.

Production at Ilomba was suspended in November 2019 following protests by the Concerned Citizens who were demanding that government closes the mine for failing to honor corporate social responsibility obligations.

The protests turned violent as the protesters burnt shelters of mine workers and even seized a vehicle which was supposed to carry the product for export.

In response, Ilomba Granite Mine Company sued leaders of the Concerned Citizens in December 2019, and applied for an interlocutory injunction restraining the people of Mbilima from interfering with the operations of the company through protests or whatsoever.

But during a court hearing at Mzuzu High court on January 6, Ilomba withdrew the case “in the interests of peace, and to avoid further conflicts and ease tension.”

Chairperson of Natural Resources Justice Network (NRJN), Kossam Munthali, who was one of the defendants said he was delighted that the case was dismissed with no costs attached to it.

However, the Concerned Citizens have stood their ground that the mine be temporarily closed “until some sticky issues are sorted out regarding the Chinese miners.”  

“Our demand still remain that the mine be temporarily closed until some sticky issues are sorted out, the communities need to be told who the Chinese miners are because the license holder is a Malawian of Asian origin Faisal Hassen, furthermore the new Chinese owners did not carry out  any community sensitization,” said Chairperson of the Civil Society Network Sydney Simwaka.

Hassen, however, dismissed the CCC’s assertions saying his Chinese partners met up with the traditional leaders of the area before commissioning mining operations.

Hasssen said on Mining Review readers Whatsapp group: “The truth is that we have done nothing wrong as a Company. When my Chinese partners moved to the site and met up with the chiefs, they were overwhelmed by the welcome they received hence they pledged to assist the community. Among others, they pledged a borehole, the building of a classroom and a clinic. The borehole has already been completed and the other projects are on their way.”

But commenting on Hassen’s remarks, Munthali described them as an insult to the community of Mbilima explaining that constructing a borehole alone is not enough considering the 24 years that the company has been in operation in the area.

Munthali also lashed out at Ilomba Mining Company for being secretive in its dealings.

He said:“What even shocked the community when we met was the size of their mining area which is 3.4 square kilometers, implying all the villages in Mbilima area are within the mining area.”

 This information was not even known to the community, so hiding the information for 24 years is not fair.

 “The people do not even know who the Chinese people are, they were just surprised.”

The Department of Tourism in the Ministry of Industry, Trade and Tourism will use this year’s Takulandilani Malawi International Expo to provide a platform for participants to have firsthand experience of Malawi’s tourism products and share best practices on how to network and package the products.

The expo will also, at the local level, provide various business opportunities for those in the fields of catering, arts and crafts as well as stand branding.

Secretary for Industry, Trade and Tourism, Ken Ndala, has announced in a press statement that this year’s Takulandilani Malawi International Tourism Expo (MITE)—the fourth of its kind—will be held in April at the Bingu International Convention Centre in Lilongwe.

Malawi’s travel and tourism sector contributes 7.7 percent to the country’s gross domestic product (GDP).

At last year’s Expo, government unveiled a master plan to develop the tourism sector which includes putting up necessary infrastructure ‘to create a conducive business climate for existing players in the industry and intensifying promotional activities to attract more tourists and investors.’

The master plan will be implemented over a period of 25 years and will guide planning, zoning and promotion of tourism investment in the country.

As part of the plan, the government has already constructed two access roads in the tourism district of Salima connecting lakeshore resorts to the main road and acquired over 17 hectares of land along the lakeshore for development of public beaches which will act as a model for tourism development along the lake, according to Ndala.

The Ministry has also upgraded the Kamuzu International Airport with assistance from the Japanese Government through the Japanese International Cooperation Agency (JICA).

The government is also implementing the Promotion of Investment and Competitiveness in the Tourism Sector (PICTS) project with financial support from the African Development Bank (AFDB) to the tune of US$10-million.

The project seeks to build and strengthen institutional capacity in tourism statistics development and implementation of Tourism Satellite Accounting for Malawi.

The project also seeks to build capacity of 500 Small and Medium Enterprises (SMEs) in the tourism sector through training and provisions of loans.

The PICTS project will further enhance law enforcement in Kasungu and Lake Malawi National Parks to reduce wildlife poaching and strengthen the Malawi Tourism Council, which is the voice of the tourism private sector so that it serves its members more effectively.

The Japanese Government will finance the long awaited construction of a dual carriage way from Lilongwe Hotel to Lali Lubani Road Junction.

CEO for Lilongwe City Council John Chome says in a statement that the Council in conjunction with the Ministry of Transport and Public Works and the Roads Authority have started the process to remove structures, trees and relocation of services such as water pipes, sewer lines, Electricity Supply Corporation of Malawi (ESCOM) poles, street light poles and telecommunication cables, that are in the path of the road expansion project.

The Government wants to turn the section of the M1 road in the city of Lilongwe into a dual carriage way in order to overcome the problem of traffic congestion in the Capital City.

The plan to construct of the dual carriage way comes after Government completed the construction of the Lilongwe City West By-Pass road, which was constructed with financing from the African Development Bank with a similar aim of reducing congestion in the City.

The Japanese Government also financed the expansion of the Chipembere Highway in Blantyre into a dual carriage way.

The Malawi Energy Regulatory Authority (MERA) has come up with tougher guidelines and conditional requirements for electrical installers.

The conditional requirements include: age; knowledge; adequacy of work; premises, instruments and tools and; permit renewal.

Board Chairperson for MERA Joseph Bvumbwe said during a stakeholders’ consultative workshop on newly developed guidelines for electrical installations inspectors in Lilongwe that the new conditions will act as a guide in the process of appointing electrical installations inspectors and how they will be conducting inspections.

He said the new tougher conditions will ensure that the installers are well prepared before booking for interviews to get legal certificates.

“The guidelines will provide the scope of work of the inspectors through the classification provided in Section 5 of the Electricity (amendment) By-laws of 2018 and also provide procedures for inspection of electrical installations,” Bvumbwe said.

He explained that the guidelines will cover all types of installations including existing and new installations, and modifications and replacement of electrical equipment.

MERA Senior Electricity Specialist Shaibu Mludi said MERA came up with the new conditions following a survey conducted in the country’s major cities, which discovered abnormalities in electrical installations.

He said though all targeted installers were above recommended age (18), about 50 percent were found lacking knowledge about installation, while the average of 73 percent had no protective equipment.

“Most installers do not have an operating workshop, and those installers with overwhelming jobs do stay in a cubicle without suitable tool boxes and instruments to conduct tests,” Mludi said.

He also revealed that some installers were found with forged permits, operating without registering, non- committal to renewal of permits and some selling the registration to non -registered installers.

Mludi said minimum passing rate for the installers during practical performance assessment during inspections is 75 percent and warned that the Authority will de-register installers performing below 75 percent.

“MERA will impose penalties on installers who forge or sell stamps to uncertified electrical installers and that it will also organize installers committee to sensitize members on the dangers of forging and selling stamps to non-licensed installers,” he said. Electrical Contractors Association of Malawi President Michael Gadama admitted the presence of the

The governments of Malawi and Mozambique have initiated a resettlement process to pave way for the construction of the electricity interconnector which will enable Malawi import electricity from the region through the Southern Africa Power Pool (SAPP).

This comes after the two countries have secured funds from the Norwegian Trust Fund, the World Bank, German Development Bank (KFW) and the European Union to finance the project.

Electricity Supply Corporation of Malawi Limited (ESCOM) and Electricidade De Mozambique, E.P. (EDM)   explain in a statement that they are now in the process of recruiting Rap (Resettlement Action Plan)  implementation consultant for the 400 KV Interconnector Project.

The first phase of the interconnection process will involve construction of the transmission line from Matambo substation in Tete, Mozambique to the Phombeya substation in Balaka, Malawi. Later, there will be an extension and upgrade of the Matambo substation on the Mozambican side from 220 KV to 400 KV.

“The Rap (Resettlement Action Plan) Implementation Consultant’s assignment is to ensure timely, appropriate and comprehensive implementation of the RAP in compliance with applicable legislations of both countries,” reads the statement.

It is expected that the consultant will be involved in all matters pertaining to the implementation of the resettlement plan, which will include mitigation of the adverse effects of the project.

“The implementation [of the resettlement plan] shall be done in accordance with the RAP plan developed by another consultant as well as in accordance with Environmental and Social Impact Assessment (ESIA) and the Resettlement Policy Framework (RPF) prepared by another consultant,” Escom and EDF say.

“The RAP implementation consultant will closely work with EDM and ESCOM’s Project implementation Units and Environmental and Social specialists, and cooperate with the respective local authorities in each country responsible for land acquisition, resettlement and compensation.

The two electricity companies have since invited eligible consulting firms to indicate their interest in providing the services.

Malawi’s State President Arthur Peter Mutharika will on Friday, January 10, launch the Agricultural Commercialization Project (AGCOM) at Bingu International Convention Centre (BICC) in Lilongwe.

Principle Secretary for the Ministry of Agriculture, Irrigation and Water Development (MoAIWD) Gray Nyandule-Phiri says in a statement that the project is being implemented under the theme of ‘Agricultural Commercialization: Leveraging Cooperatives and Markets.’

Nyandule-Phiri explains that his Ministry is implementing the project in close collaboration with the Ministry of Industry, Trade and Tourism (MoITT) and other stakeholders using proceeds of a loan from the World Bank’s International Development Association (IDA) amounting to US$ 95-million.

He says: “The objective of AGCOM is to increase commercialization of agricultural value chain products selected under the project including products of farms and agribusinesses, like crop, livestock, and fisheries products sold domestically or exported, with or without processing, depending on market requirements.”

“AGCOM is implementing a high impact Productive Alliance (PA) approach based on commercial agreement between the project supported Producer Organizations (POs) including farmer cooperatives and associations.”

The project is expected to benefit small-scale and emerging poor farmers (cultivating not more than eight hectors) and farmer organizations with capacity to produce beyond subsistence; agro-product buyers (processors, retailers, exporters, and aggregators) and; financial lending institutions for the agricultural sector.

AGCOM will also be paying special attention to women and youth based producer organizations to achieve the objective of having a minimum of 300 productive alliances and 100,000 farming households in 5-years’ time.

The project has four components namely: Building Productive Alliances that will be supporting the integration of small-scale and emerging farmers; Support Investment Enabling Services for Access to Agricultural Financing and Access to Land for Commercial Agriculture; Project Coordination and Management and; AGCOM approach in selecting the Value Chains (VC) to allow agricultural value chains have strong prospective commercial linkages.

AGCOM is being implemented through an independent Project Implementation Unit (PIU) whose operations started in July 2018.

The PIU is charged with the responsibility to oversee day to day project implementation, monitor progress, and coordinate and account for utilization of project funds.

The project will be implemented country-wide for six years from 2018 to 2023.

The Malawi Government says the county’s underexploited leather industry has the potential to contribute up to 4% to Malawi’s Gross Domestic Product if fully exploited.    

Minister of Industry, Trade and Tourism Salim Bagus said this during the Africa Leather and Leather Products Institutes (ALLPI) annual regional consultative forum that took place at Bingu International Convention Center (BICC) in Lilongwe.

Bagus said that Malawi’s leather industry has overwhelming potential as demand for footwear alone is estimated at 16 million pairs against current production of around 0.3 million pairs per annum as of 2018.

“The demand is projected to reach 18 million pairs per annum in tandem with population growth this year, which clearly shows that there is potential and viability of investing in a tannery in Malawi which can feed the Leather Design Studio with finished leather as well as supplying the deficit countries in the region,” he said.

Bagus said with support from ALLPI, Malawi managed to develop the Leather Value Strategy in 2015 to transform leather value chain from the production and export of raw hides and skins and processed products to the production and export of value added products including finished leather, footwear and leather garments.

He said: “As part of implementation of this Strategy, my Ministry has been supporting the sector by among other things, initiating the setting up of the Small and Medium Enterprises (SMEs) Association and; training of SMEs and Cooperatives in Vegetable Tanning and Footwear Making.”

“We have been also in the forefront sponsoring the SMEs to participate in various international Leather Trade Fairs where they could exhibit their products and explore many skills through networking with foreign leather SMEs,” he said.

Bagus said his ministry established the Satellite Leather Design Studio in Blantyre to promote investment in the sector through setting up of a tannery to complete the existing leather value chain gap.

This year’s regional indaba was celebrated under the theme of ‘Developing Africa’s Leather Value Chain through research, business linkages and technology Transfer,’ and the Minister said it is a well-chosen theme whose adoption will help to free-up some SMEs who are pinned by challenges in the industry.

Efforts to promote Malawi’s SMEs in the Leather Value Chain have mostly been undermined by challenges such as lack of modern technology and low levels of research and development (R&D) in support of the sector.

In his remarks, Director of Administration and Finance in the Ministry Joseph Mkandawire described the sector as one of the priority areas for the Government due to its potential to change the welfare of the SMEs and the outlook of the national economy.

Mkandawire said the sector has the potential to immensely contribute to job creation, poverty reduction and the overall economic growth of the country.

He said: “The sector analysis shows that the value chain has the potential of grossing up to US$102 million dollars (MK45 billion), if all hides and skins produced in Malawi are utilized and processed into finished goods locally.”

“It is also estimated that the industry can potentially generate 3,500 jobs in the manufacturing of footwear and a couple of thousand jobs in accessories, manufacturing and footwear distribution and marketing.”

The Malawi Government is seeking a strategic private sector sponsor to develop the proposed 350MW Mpatamanga Hydro Power Project on the Shire River.

The Mpatamanga project, which was identified in the 1998 Power Development Plan study, is being developed as a Public Private Partnership with the Malawi government through EGENCO acquiring 30% shareholding and a strategic sponsor expected to have 70% interest.

Speaking to Mining and Trade Review at the launching ceremony of the procurement process for the strategic sponsor in Blantyre, Acting CEO for Malawi’s Public Private Partnership Commission, Audrey Mwala, said the new power plant will be located at Mpatamanga Gorge, between the two existing hydropower plants, Tedzani and Kapichira, on the Shire River.

She said: “Government conducted a comprehensive Feasibility Study in 2018 which recommended a peaking plant with a capacity of 309MW, and the station will have two dams: Main dam for 309MW daily peaking plant, and a regulating dam downstream for additional 41MW of baseload generating.”

“The project intends to meet future power demand and to balance current and future baseload energy from solar, wind, thermal or run of river plants as it will provide crucial peaking capacity for Malawi.”

The Malawi Government is, meanwhile, looking for interested bidders who upon signing confidentiality undertaking and paying the required fee will be granted access to a Virtual Data Room containing all necessary documents for the project.  

She said the state will organize a pre-bid conference and will provide additional opportunities for bidders to submit queries and seek clarifications during the tender process.

The strategic sponsor will also be subsequently required to tender out certain key contracts in compliance with requirements set by the Malawi Government.

Minister of Natural Resources, Energy and Mining Bintony Kutsaira, who graced the launching ceremony for the procurement process, touted the project as one of various interventions that his Ministry is pursuing to develop the energy sector which is one of the priority areas in the Malawi Growth and Development Strategy (MGDS) III.

“The country is ranked poorly on access to electricity which is only available to 11% of the population, despite this low penetration of electricity, the country faces significant blackouts mainly arising from a low generation capacity. Implementation of this project means a halt to persistent power blackouts.”

Kutsaira expressed gratitude to the World Bank for financing the feasibility study of the project.