Mining & Trade News

By Modester Mwalija

Gemstone mining firm Yami Gemstones Lab and Exports Private Limited (YAGLE) says it is encountering critical delays in its projects due to the Ministry of Mining’s failure to complete an inventory assessment.

In an interview with Mining and Trade Review, YAGLE CEO Yamikani Jimusole said the hold-up in completing critical inventory assessments has stalled several of the company’s high-priority projects.

“The delay by the Ministry has prevented us from moving forward with our sales and marketing initiatives, not to mention our ability to form strategic partnerships with investors; this is severely impacting our anticipated returns on investment,” he said.

Jimusole said despite signing a non-disclosure agreement with Export Development Fund (EDF) which is buying gemstones under Reserve Bank of Malawi’s Structured Market, YAGLE is struggling to progress without the required reports.

“We are sitting on unsold inventory that could generate significant revenue, but without authentic gemstone appraisals, we cannot move forward. Investors are growing impatient,” Jimusole explained.

He also said that the delays have also paused their funding request to the National Bank of Malawi, as the bank is waiting for necessary documents from the Ministry of Mining.

Jimusole said his company has been forced to revise several key project timelines like delaying the opening of the Mzimba gemstone mines which was set to be before 2025.

“Other projects, including the Environmental and Social Management Plan (ESMP) for Mangochi operations and the establishment of a Gemmological and Entrepreneurship Institute, have been pushed further to 2026,” Jimusole stated.

Jimusole complained that the Ministry has been slow to respond to their requests despite sending several reminders.

“The last time we heard from them was in May 2024, when we were told by the Principal Secretary, Dr. Joseph Mkandawire, that our request was forwarded for assessment. Since then, nothing,” he said.

In response to the setbacks, Jimusole said it has reached out to various stakeholders with the hope of finding a solution: “We have sent letters to the US Embassy, the International Colored Gemstone Association (ICA), and the Reserve Bank of Malawi, asking for their support in resolving the issues with the Ministry.”

He said such prolonged delays pose long-term risks to both YAGLE and the gemstone industry as a whole.

“If this continues, we are looking at massive financial losses, reduced operational efficiency, and potential reputational damage,” said Jimusole.

He also expressed concern that the delays could disrupt local supply chains and tarnish Malawi’s reputation in the global gemstone market.

Malawi’s gemstone sector holds immense potential for economic growth and development. With more efficient systems, Malawi could unlock the full value of its vast gemstone resources, positioning itself as a significant player in the global gemstone market while boosting local job creation and economic stability.

By Marcel Chimwala

ASX-listed Lotus Resources has announced that it has signed a binding agreement and a term sheet for uranium sales, as well as a binding unsecured loan facility for the restart of its Kayelekera Uranium Project in Karonga.

Lotus CEO Greg Bittar said in a statement that together, the offtake arrangements represent the sale of a minimum of 1.5 million lbs and up to 1.8 million lbs of uranium produced at Kayelekera from 2026 through until the end of 2032 to PSEG, a subsidiary of Public Sector Enterprise Group which is a diversified energy company based in Newark, New Jersey, and Curzon Uranium Ltd, a leading international uranium market participant.

Bittar explained that the contract pricing achieved in the arrangements is the result of competitive discussions and secured to deliver strong margins, including for any optional quantities, for the uranium sold.

 “A fixed-price escalation percentage per annum applies from the time of deliver,” he said.

He said the offtake arrangements, as with the others being negotiated, provide Lotus with the necessary commercial flexibility for Kayelekera’s key production restart milestones and early-stage production levels.

“The term sheet with PSEG is subject to execution of a definitive uranium sale and purchase agreement within four months and Lotus proceeding with the restart of Kayelekera. The binding agreement with Curzon is conditional on Lotus completing an equity raise in conjunction with the restart of Kayelekera,” he said.

The unsecured loan facility provides that the repayment of the facility must occur 12 months from the first utilisation date (unless extended to 18 months from the first utilisation date as elected by Lotus).

Lotus’s continued engagement with North American nuclear power utilities and commodity trading houses for offtake of more substantial volumes of uranium from Kayelekera is designed to leverage utilities’ continuing demand for contract pricing based on the long-term uranium price. It will also support any potential debt funding for Kayelekera’s restart.

Bittar said: “Our first two sales contracts, coupled with unsecured financing with significant drawdown flexibility, mark a terrific milestone for Lotus and our Kayelekera Project, demonstrating customers’ confidence in the strength of the uranium market as well as providing a strong endorsement of our plans for the project.”

“Through the initial offtake and prepayment / funding discussions, we have established critical knowledge and a breadth of long-term industry relationships with multiple substantial strategic customers. This will serve us well as we look to secure further contracts closer to the commencement of production.”

Very good developments are taking place in Malawi’s mining sector. A month ago, we saw the Malawi Government signing mine development agreements (MDAs) with Australian owned Lotus Africa to resume production at Kayelekera Uranium Mine in Karonga and Lancaster Exploration, a subsidiary of UK firm Mkango Resources, to kickstart rare earth mining at Songwe Hill in Phalombe.

The Government signed these MDAs after it had signed another MDA with Australia’s Globe Metals and Mining to carry out niobium mining operations at Kanyika in Mzimba.

In this edition, we have reported in the lead article that Lotus has secured first two uranium offtake arrangements for Kayelekera Mine.

We view these positive developments as the beginning of Malawi’s mining revolution, which will see several large-scale mines opening in Malawi as envisaged by the Government.

We, therefore, plead with Government and stakeholders to ensure that there is adequate participation of locals in these oncoming mining projects in order for the resources to substantially benefit Malawians.

We understand that there are provisions for local participation in the laws but believe that without strict enforcement of the laws, there is a great risk that Malawi can lose out on some benefits that could emanate from these projects.

We feel it is high time government and other stakeholders including civil society organisations and donor agencies invested in training members of the community in the potential large-scale mining areas in running businesses that will sell various essential commodities to the expected mines.

Small scale farmers in these areas should also be trained on best practices so that they are able to scale up production to sell their produce to the mines.

Tertiary institutions offering relevant courses should as well prepare their students to be able to work in these mines after graduating.

On top of that, these academic and research institutions need to join hands with local companies to explore ways to take part in local processing of these minerals so that a greater part of value addition  is done in Malawi at a fair charge to the mining companies.

Malawi stands to lose out as a country if these mines will be run by foreign experts using imported equipment and consumables.

When these mines start operating, we should not blame the companies for employing many expatriates when we have failed to train locals in the roles taken up by the expatriates.

We should not blame the companies for importing agricultural produce when our small-scale farmers are failing to produce quality produce of required quantities.

By Tawonga Nyirenda Mayuni

The Assistant Mine Manager for Karonga-based Lisikwa Coal Mining Company Zeru Thopola says there is need for the government to empower the coal industry by facilitating the establishment a coal industry association.

In an interview with Mining and Trade Review, Thopola said the government should come in through the Department of Mines (DOM) and bring together coal miners through an association that can control the operations of the industry.

The call for the establishment of the association comes amidst market woes that have characterized the industry.

Thopola said: “Lisikwa coal mine is facing unfair market competition where by other coal companies tend to lower coal prices on the market, hence we do not get orders. As a result, the company is making little money and struggling to pay bills and wages.”

He also said financial constraints that local coal miners such as Lisikwa are experiencing can be solved once the government establishes a loan facility for coal miners.

“Most of the companies in the coal industry do not have the financial capacity to run their mines but they have mining licences. They wait for other investors with the financial muscle to partner them till the licence expires. If you go to the cadastral licensing system, you will find out that more than 20 companies have licenses for coal but less than five are operational,” Thopola said.

Thopola also added that transportation of coal is another challenge due to poor road conditions, which leads to unexpected breakdowns, delay and accidents.

Commenting on the future of the coal mining industry in Malawi, Thopola said that the future of the coal industry in Malawi needs advanced technology that will require shaft sinking since most of the coal is found deeper than 50 meters.

Lisikwa investments Limited was established in 2008 and employees 150 people. The company currently sells its coal to Illovo Sugar Malawi (Dwangwa) and Presscane Limited.

By Modester Mwalija

ASX-listed Sovereign Metals, which is prospecting for rutile and graphite at Kasiya area in Lilongwe, has announced that it has commenced a hydraulic mining trial at the rutile-graphite prospect as part of the ongoing Pilot Mining and Land Rehabilitation Program.

Sovereign MD Frank Eager announces in a statement stating that the hydraulic mining trial aims to further develop previous test work as part of the Kasiya Optimization Study. 

The trial is being conducted by Fraser Alexander, a global industry leader in hydraulic mining, following successful completion of a dry mining trial in July 2024

“With valuable insights gained from the dry-mining approach at Kasiya, we are now entering the next phase, which includes the commencement of the hydraulic mining tests, processing and backfilling material, and progressing towards the rehabilitation phase which we expect to take approximately three months to complete including backfilling of main trial pit, deposition and rehabilitation test work,” states Eager

He says that the company has also made significant strides in water management for the trial. A temporary water storage pond, filled with six million litres of groundwater from eight on-site boreholes, will supply the water required for the hydraulic mining operations.

“This water will be used during the hydraulic mining trial and continuously recycled from the constructed holding cells where sand and fines fractions will be stored respectively prior to the planned deposition and rehabilitation test work allowing for the recovery of approximately 34% of the water, which will be returned to the water storage pond.”

Sovereign Metals is confident that the successful completion of the hydraulic mining trial and associated tests will further solidify Kasiya as a flagship project for rutile and graphite extraction in Malawi, setting a new benchmark for sustainable mining in the region.

OUTSTANDING BATTERY ANODE MATERIAL PRODUCED FROM KASIYA GRAPHITE

Meanwhile, studies have confirmed Kasiya graphite concentrate as an excellent feedstock for natural graphite anode materials suitable for battery production.

Eagar explains that the Kasiya natural graphite presents a unique, low-cost opportunity to develop lithium-ion battery supply chains outside of China as very high quality coated spherical purified graphite (CSPG) anode material produced from Kasiya graphite concentrate has performance characteristics comparable to the highest quality natural graphite battery material produced by dominant Chinese anode manufacturers.

Eagar comments: “These results confirm that Kasiya graphite concentrate will be an excellent anode material feedstock to the battery industry. Not only is the weathered, saprolite-hosted graphite easy to purify to very high-grades, the anode material produced meets the highest industry specifications. Along with the very low BET specific surface area and high tap densities (both resulting in excellent first cycle efficiencies and initial battery discharge capacities), Kasiya has the potential to become a dominant source of graphite supply ex-China.”

“Combining these excellent results with one of the largest graphite resources globally, industry low operating costs and lowest global warming potential, Kasiya is presenting significant advantages over its graphite peers.”

“We look forward to further test-work and market updates as we continue to develop Kasiya as a supplier of premium quality, cost competitive natural graphite concentrate.”

By Wahard Betha

The Ministry of Mining says it is finalizing the polishing of the draft Petroleum (Exploration and Production) Bill in order to formulate a new Act to manage the upstream petroleum subsector, which is currently governed using the Petroleum (Exploration and Production) Act 1983 currently considered outdated.

Director General for Mining and Minerals Regulatory Authority Samuel Sakhuta told Mining and Trade Review that Government is fast-tracking the drafting process to create a better legislative environment in the subsector which continues to attract interest from investors.

Government demarcated Malawi’s part of the Great African Rift Valley geological zone, which has potential for hydrocarbon prospecting into six blocks. The blocks were awarded to various multinational firms that later relinquished their licences due to the prevalence of the Covid-19 pandemic which made it difficult for them to mobilise staff and equipment to conduct the exploration work.     

Sakhuta said the Ministry has included a provision for re-demarcation of the existing big blocks in the new Bill to create room for more investors interested to conduct hydrocarbon exploration.

He said: “We have a draft bill that we are to submit to parliament at some point once polishing of the document is finalized.”

“Looking at the pressure that we have now from the investors who are interested in the sector, recently I presented a memo on the same to the Principal Secretary.”

“We are saying we want to come up with a solid and revised Act. In terms of re-demarcation, once the controlling officer gives a nod to that, we are much ready to re-demarcate.”

 “By demarcating, we will give a chance to many investors and have a high probability of getting what we are looking for very quickly.”.

Coordinator for Chamber of Mines and Energy Grain Malunga commended the move saying the subsector still carries weight in terms of energy sources.  

“Oil and gas will never be completely abandoned as a source of energy. There is a need to encourage exploration and development of the same,” said Malunga.

In a separate interview, Programs Coordinator for Natural Resources Justice Network (NRJN) Joy Chabwera also commended the Malawi Government for the move but further urged for full implementation of the laws.

Chabwera said: “The Ministry reviewed the petroleum policy last year which was a good move and hearing that they are now drafting a bill is progressive since the 1983 Act is long outdated.

“However, having good laws is not enough if there is no implementation and political will to see rule of law at work in this country.”

Chabwera also asked the Malawi Government to conduct due diligence on the companies applying for licenses and finalize the legal framework before rushing to grant any company a license.

By Wahard Betha

The Malawi Government through the Ministry of Transport and Public Works says it has begun restructuring the country’s air transport industry, which includes the establishment of an airport operator which has been set to be operated and managed by Airport Development Limited (ADL) under the Ministry.

The 2024 Annual Economic Report published by the Ministry of Finance and Economic Affairs explains that the mandate of ADL was extended to assume responsibility of all public aerodromes with expectations to complete the process by October 30,2024.

It reads: “The Department of Civil Aviation will further be restructured to be responsible for aviation policy in the Ministry.”

“The process of restructuring will result in the movement of human resources to where their skills and capabilities best fit and will be utilized most effectively and efficiently.”

It also says Malawi has initiated Bilateral Air Service Agreements (BASA) with Kuwait, Uganda and Mozambique, which should result in the introduction of additional flights between Malawi and the aforementioned countries.

Meanwhile, the Ministry is undertaking various projects in the air transport industry including: Development of the New Mzuzu Airport; Essential Aviation Safety Equipment Upgrade; Rehabilitation of Mzuzu Airport Resources and; Upgrade of Aviation Safety Resources.

The report, however, says the air transport industry is still encountering challenges including forex shortages and the unintended effects of devaluation.

It reads: “The scarcity of forex has compromised the attractiveness of the Malawi market to airlines as they face challenges to remit their proceeds from Malawi.”

“Government will continue to have dialogue with the airlines and other key stakeholders to ensure that airlines are able to remit their proceeds.

Apart from the air transport industry, the report also highlights some of the major activities in the railways sub-sector which include the ongoing design, upgrade and rehabilitation of the Marka – Bangula railway line, which were significantly affected by Tropical Cyclone Freddy considering that most of these are currently being implemented in the southern region which was heavily affected.

Other ongoing projects in the rail subsector includes; rehabilitation of the Nkaya-Salima-Lilongwe-Mchinji Railway Section (399km); Construction of the Ruo Breakaway Rail/Road Bridge Construction works for the Ruo Breakaway Rail/Road Bridge on the Makhanga to Sandama railway section; Construction of a Rail Network to the North of Malawi and; Railway Operations Training Programme.

The ministry responsible plans to complete works for the construction of the Marka-Bangula railway in the 2024/25 financial year.

BY FRANCIS TAYANJAH-PHIRI

Construction of Likoma Port is scheduled to finish by November 30 this year, when it will immediately start operating, the Marine Department says.

In an interview with Mining & Trade Review, the Department’s Chief Surveyor of Vessels Wilson Luwani rated the project at 85% completion.

He said the facility will be capable of handling two big ships at a time.

Luwani explained that currently there are ongoing construction works taking place for a fence, warehouse, and immigration/customs offices; and immediately after this, the port will be ready for operations.

“Apart from the docking bay, the facility [port] will have a warehouse, storage facilities, waiting shelter, jetty, and cargo handling equipment, among other things,” said Luwani.

He said the port was designed in a manner that it would not be prone to floods, as is the case with the Nkhata Bay one, which is currently submerged in water, following this year’s rising of water levels in most parts of Lake Malawi.

“This port was designed to handle the highest water levels ever recorded,” remarked Luwani.

However, he said the construction of the Port was not without challenges, citing, among others, shortage of fuel supply at the early stages of construction works.

“Other challenges were; water levels making it difficult to do works under the main platform and weather patterns including heavy winds on the lake which made it difficult to supply building materials,” said Luwani.

He said the other challenges included difficulty to find locally qualified personnel to do special professional works for instance underwater works, and the devaluation of the Malawi Kwacha along with inflation, which kept the contract sum rising.

Luwani disclosed that the total cost of this project was initially projected at MK10 billion, but rose to MK22 billion, due to the stated factors.

“The Government of Malawi funded the project, and the contractor is Mota-Engil,” he said.

Luwani stated that the port, once operational, will impact positively on the development of the Island district by ensuring improved efficiency in cargo handling.

“This will translate into increased trade operations; as it will enhance time saving and low operational costs with the jetty in place,” he said

By Modester Mwalija

There is substantial progress in a number of energy projects that are being implemented in Malawi in order to increase availability of power in the country, which will help a number of mining projects currently struggling to roll out operations due to lack of power to pass the feasibility test.

This is outlined in the 2023/2024 annual economic report published by the Ministry of Finance and Economic Affairs.

The report says that the government handed over the Kam’mwamba Coal-Fired Power Project to the Electricity Generation Company (EGENCO), after unfulfilled expectations from the EXIM Bank of China. EGENCO has since revised the feasibility study, estimating the project cost at US$600-million.

“The project’s completion, anticipated by 2030, is dependent on securing a joint venture for EGENCO to partner with a 50:50 possible share of the project cost between EGENCO and the joint venture partner,” reads the report.

The report highlights that despite some setbacks, the Mozambique-Malawi 400kV Interconnector Project is now expected to come online in October this year.

The report reads: “The progress achieved at the end of the 2023/24 financial year include compensation pay-outs for Project Affected Persons on the Malawi side and the revision of the Power Purchase Agreement with Electridade de Mozambique (EDM), which will increase power imports from 50MW to 120MW when the project is completed.”

The report also notes that in the period under review, ESCOM and Zambia Electricity Supply Corporation Limited (ZESCO) initiated a joint feasibility study, including Environmental and Social Impact Assessments and a Resettlement and Compensation Action Plan, on the Malawi-Zambia Interconnector which is aimed at integrating Malawi into the Southern African Power Pool (SAPP) by connecting to Zambia’s electricity grid.

“The initial phase will inject 50MW into Malawi’s grid, with the potential for future increases. Both companies have signed the Project Implementation Framework, marking a critical step towards realizing this project,” reads the report.

The report also says that the government is implementing the Mpatamanga Hydropower Project, set to deliver 361MW of clean energy under a Public-Private Partnership (PPP) arrangement.

The achievements in the 2023/24 financial year include incorporation of Mpatamanga Hydro Company Limited; ongoing negotiations for Power Purchase Agreements; Completion and approval of the Project Freeze Designs, continuation of environmental studies; and development of Resettlement Action Plans scheduled for completion by May, 2024.

The report says the government is also prioritizing the rehabilitation of the Kapichira Hydropower Station, which suffered extensive damage from Tropical Storm Ana in January 2022.

Funded by a $60 million World Bank grant, EGENCO successfully repaired all four damaged machines, restoring 129.6MW of power.

The report reads: “Phase I of the restoration is nearly complete, paving the way for Phase II, which will involve constructing a more resilient structure to protect against future storms. This project is crucial for safeguarding Malawi’s energy security, with completion expected by May 2027.”

On integrating solar energy into the national grid, the report says Malawi is implementing a 20MW Battery Energy Storage System (BESS) at the Kanengo substation in Lilongwe. The project, funded by a US$20-million grant from the Global Energy Alliance for People and Planet (GEAPP), reached financial closure in July 2023.

It says installation is expected to be completed by March 2025, providing essential additional services to stabilize the grid.

Furthermore, the report indicates that EGENCO is advancing the Nanjoka Solar Power Plant in Salima, a project expected to contribute 50MW to the national grid by 2029. Following the completion of feasibility studies and environmental assessments, construction began with the installation of an initial 10MW. The project, which had its groundbreaking ceremony in November 2023, marks a significant step towards diversifying Malawi’s energy sources.

 As detailed in the report, EGENCO also plans to double the capacity of the Wovwe Hydropower Station from 4.5MW to 9MW. In 2023, the Malawi Environmental Protection Authority (MEPA) approved the extension.

“Negotiations for the Power Purchase Agreement are nearing completion. Once finalized, construction will commence using EGENCO’s internal resources, further strengthening the country’s energy resilience,” states the report.

These projects represent a crucial investment in Malawi’s energy future, addressing both immediate needs and long-term sustainability goals. The successful completion of these initiatives will significantly enhance the country’s power generation capacity, reduce reliance on imports, and improve the overall stability of electricity.

The Ministry of Energy expects planned investments of approximately US$3.5 billion in order to meet the estimated energy demand by 2040.