Malawi to put to tender oil exploration blocks

By Wahard Betha

The Malawi Government says it will put to tender the country’s vacant petroleum and gas exploration blocks once the Ministry of Mining finalises revising the previously demarcated blocks.

The Ministry of Finance and Economic Affairs says in the 2023 Annual Economic Report that since 2020 and following relinquishment of exploration licenses by investors due to Covid-19 pandemic, foreign investors are showing interest to occupy the tenements.

The report states that as per law, the companies that closed their offices in the country surrendered their findings to the Ministry of Mining making it easier for new investors to continue from where they stopped.

Reads the report: “The Ministry is working on revising the previously demarcated exploration blocks and once this is finalized, the petroleum exploration licenses will be tendered for investors to access.”

“Historically, Malawi has never produced oil and gas, however, in the decade between 2010 and 2020, several investors have shown interest in Malawi’s oil and gas resources by conducting exploration activities which have revealed that the country has the potential to produce both offshore and onshore oil and gas.”

“Though the investors relinquished their exploration rights due to economic constraints caused by the Covid-19 pandemic, geological data and information was passed on to the Ministry of Mining as required by the law.”

Besides potential for oil and gas, Malawi has a diverse mineral resource base consisting of energy minerals – coal and uranium; industrial minerals such as rare earth elements, bauxite (source of aluminium), and heavy mineral sands bearing titanium; niobium, tantalum, construction materials – rock aggregates (such as granite), clay, limestone; and precious metals and stones mainly gold and gemstones.

Many of the mineral resources have previously been explored and evaluated by Government and private investors whereby a wealth of geological data is available for investors to work with to develop economically viable mining operations.

The report says REE exploration in the country is showing significant potential as evidenced by exploration results by Lindian Resources Limited, an ASX-listed company running Kangankunde Project in Balaka district.

It says the tremendous results provide opportunities for investors into the project as well as other sites around the project that may have mineral potential.

The country has also made several gold discoveries being operated by Artisanal and Small-scale Miners (ASMs) in recent years but a definite exploration work is yet to conclusively define a significant gold resource viable for medium to large-scale operations.

“While the Ministry of Mining will continue to facilitate the formalization of existing small-scale mining groups, licensing regime is open to local individuals and registered bodies interested in participating in the sector,” reads the report.

Other notable mineral resources under development are rutile found in Lilongwe, which is a source of titanium; heavy mineral sands located in the lakeshore area of Mangochi and Salima bearing titanium, zircon, and other industrial minerals; and graphite in Lilongwe, which has vast industrial applications for example in batteries and lubricants.

The report also stresses that the Malawi Government continues to undertake a number of interventions to foster productivity, transparency, and accountability of the sector so that it contributes significantly to inclusive wealth generation and economic growth in line with the 2063 Vision.

Some of the key interventions include: maintaining public engagement on mining issues through social media, mainstream media, and other public forums; licensing and training of mining cooperatives and associations with a focus on health, safety, environmental management, and compliance with reporting and payment obligations for license holders.

The report also says the Government will proceed in negotiating and finalizing Mining Development Agreements with investors on key projects such as Kayerekera Uranium Mine (Lotus Resources), and Songwe Hill Rare Earths Project (Mkango Resources).

It further adds that the country has the interest to support mineral exploration programmes with quality data and technically competent personnel, while providing technical and statutory guidance to proponents; review the Mines and Minerals Policy to create a more attractive investment climate in the country; review the Petroleum (Exploration and Production) Act, including the subsidiary legislation and; review the Explosives Act including the subsidiary legislation.

“The Government will also operationalize National Mining Investment and Development Corporation to facilitate Public Private Partnerships, as well as finalize geo-mineral resource mapping across the country,” the report reads.

Since 2021, the mining sector has been growing due to a conducive legal and regulatory environment for the participation of all interested players, both local and international.

Malawi 2063 identifies mining as a key driver to the economic development of the country under the industrialization pillar in the country’s effort to achieve the upper-middle income status by the year 2063.

Mining has tremendous potential to support industrialization in Malawi which the report says has not been fully harnessed.

The sector contributes only one percent to national income, an indication of the need for more policy reforms to improve legal and regulation framework; administrative procedures, and building capacity to enhance oversight and local participation.