Mining & Trade News

The Malawi Government says it is in process of reviewing the country’s Mines and Minerals Policy to take into account current trends in the sector.

Public Relations Officer for the Ministry of Mining Tibonge Kampondeni told Mining & Trade Review that the Ministry intends to align the new policy to Malawi 2063 Economic Agenda which emphasizes on the development of Agriculture, Tourism and Mining sectors.

Kampondeni explained that the new Policy will focus on improving in some areas including financing and mechanization for Artisanal Small-scale Miners (ASMs).

She said: “The focus of the government is on Agriculture, Tourism and Mining sectors (ATM) and we have the MW2063 Vision so the policy needs to be aligned to these areas.”

“We talk about increased productivity and yet we are stopping small-scale miners from mechanization, the reason is that we want to protect the environment.”

“They can only use such type of equipment after applying to the Commissioner of Mines. We want to take care of this burden.”

“The aspect of financing was not conspicuous in the old policy. We need a financing mechanism that will link ASMs with financing institutions,” said Kampondeni.

Kampondeni explained that unlike the old policy, the new policy will improve collaboration between small, medium and large-scale miners.

She said the policy in pipeline will also encourage Corporate Social Responsibility (CSR) activities to ensure that communities surrounding mines benefit from the mineral resources.

Kampondeni: “There is a need for collaboration between small, medium and large miners where for example medium or large-scale mining companies could be used as outlets for small-scale miners in the value chain process.”

“For small-scale miners, CSR is not compulsory and they do not have community development agreements but at least we need to come up with a mechanism for mining companies to plough back to the community.”

“The issue of Occupational Safety, Health and Environment were also not clearly spelt out in the old policy. This is another area we want to look at.”

The coming Mines and Minerals Policy for Malawi reflects the realization by Government that the development of the Malawi mining industry can directly contribute to the economic growth of the country.

Meanwhile, the country is still using the old policy which was operationalized several years ago.

Coal miners in Malawi are finding it difficult to meet the high demand for coal in the country due to operational challenges.

Mining & Trade Review has established that demand for coal has skyrocketed in Malawi due to foreign exchange shortages which are forcing consumers to buy locally.

MD for Rukuru Coal Mining Bruno Kloser, whose company runs Chombe Coal Mine at Chiweta in Rumphi District, said due to the rising demand for coal, his company is working on increasing production at the mine.

Kloser said currently the mine is not able to meet the demand from customers as there is need for installation of additional equipment to increase rate of production.

He said: “We are not able to meet the demand at the moment as production does not just increase overnight so we need to get the equipment and staff.”

MD for DDY Coal mine David Nyirenda admitted that there is high demand for coal because there is no competition with imported coal as companies are finding it difficult to import coal due to forex shortages.

“There is demand for coal as we do not have competition from outside Malawi as companies are finding it hard to import coal due to scarcity of forex, however we are not able to meet the demand due to lack of working capital as local financial institutions are always reluctant to lend to the industry,” Nyirenda said.

Acting Mine Manager for Mchenga coal mine Assan Tembo said in a separate interview that Mchenga is working on meeting the demand from customers by opening other mining sites in its tenement area.

“This side we had heavy rains so we were not able to open other ore sites, but after the rains finish we will open other sites so that we are able to meet the demand,” he said

Tembo disclosed that in order to implement the expansion plans, the Company has mobilised additional equipment and is working on repairing a bulldozer.

The major consumers for coal in Malawi include the tobacco, brewery and cement industries.

The Ministry of Mining has announced that Malawi will hold its first ever mining investment forum this year.

Minister of Mining Honourable Monica Chang’anamuno said at a Press Briefing at her Ministry’s headquarters in Lilongwe that the forum will be held at Bingu International Convention Centre from April 23to 24under the theme: Transforming the Nation through sustainable mineral extraction.

Chang’anamuno said the forum is important because the mining sector is central to the country’s development agenda as outlined in Malawi 2063.

She said: “Malawi has essential mineral resources such as rare earth elements, graphite, uranium, gold and others which are instrumental to industrialization.”

“These minerals are a significant source of government revenue through royalties, taxes and fees which are essential for funding development projects across various sectors in the country.”

The Minister said that the Forum will serve as a platform for multi stakeholder engagement that will bring together government representatives, artisanal and small-scale miners (ASMs), mining companies, financial institutions, civil service organizations (CSOs) and various service providers.

Chang’anamuno also said the Forum will help participants to explore strategies and solutions to unlock Malawi’s enormous mineral potential for the benefit of its citizens.

She said the Forum is expected to attract over 300 participants from African countries and beyond, and Government expects the event to subsequently attract many investors not only in mining and mineral exploration but also in other sectors such as tourism and hospitality as service providers.

“This Forum is going to benefit the country a lot as it will unearth the potential of our minerals sector to the world so that a lot of investors can come and invest,” said chang’anamuno.

The Forum has been organized by the Malawi Government in partnership with the private sector and other stakeholders in order to promote Malawi’s mining sector.

Chang’anamuno hinted that Government plans to make the Forum, which will be inaugurated by his Excellency the President Dr. Lazarus Chakwera, an annual event.

Though it is key in Malawi’s development agenda, the mining sector only contributes a staggering 1% to Malawi’s Gross Domestic Product (GDP).

Answering questions from journalists on why Malawi is not adequately benefiting from the sector, Chang’anamuno appealed to Malawians to be patient saying large scale mining projects take years to reach production stage.

“It is just a matter of time before the country starts reaping the benefits from the large-scale mining projects which have to undergo exploration and feasibility studies that require time,” she said.

Meanwhile, the Minister announced at the same press briefing that preparations to operationalize the long-awaited Mining and Minerals Regulatory Authority are at an advanced stage.

“The Ministry was waiting for financial allocation from the Treasury and I am glad to report that funds have been set aside in the current budget to operationalize the Authority,” she said.

Malawi has repealed the Mines and Minerals Act 2019 and replaced it with a new Act that incorporates provisions for the establishment of an independent regulatory authority of the mining and mineral resources.

The new Act explains that the regulatory authority will be responsible for regulating mineral resources and mining activities in the country including but not limited to; granting of mining licences; inspection of mining activities; advising the Minister on policy matters of the mining sector; and generally implementing the objectives of the Act and anything necessary or incidental to the better carrying out of the functions of the Authority.

Stakeholders in the sector have received news about the establishment of the Mining and Minerals Authority with a pinch of salt as there is a risk of duplication of roles between the Authority and other government departments such as Geological Survey Department and Department of Mines, which carry out functions similar to those allocated to the Authority.

The Mines and Minerals Act 2023 provides for the Minister responsible for mining to appoint five members of the Authority.  

As reported in our article on Page 6, Malawi will hold its first ever mining investment forum this year with the Malawi Government planning to make the forum an annual event.

We commend the Government for organizing this forum, which as Minister of Mining Monica Chang’anamuno is quoted in the article, is expected to attract over 300 delegates including global mining investors.

We agree with the Minister that the forum is important because the mining sector is central to the country’s industrialization agenda as outlined in Malawi 2063.

Since exploration by different companies continues to prove that Malawi has sizeable quantities of essential mineral resources such as rare earth elements, graphite, uranium and niobium; there is need for the country to attract investors along the value chain to ensure local value addition of these minerals.

As Chang’anamuno is quoted in the article, Malawi also needs investors to provide different services to the mining industry including tourism and hospitality.

However, we believe that Government should go further than attracting foreign direct investment to empower Malawians to invest in mining and its value chain.

We should not only expect foreign investors to come to Malawi and invest in processing of minerals. Government needs to court financial institutions to support locals investing in mineral beneficiation projects.

It is disappointing that despite Government treating mining as a priority in its development agenda, many local financial institutions are not ready to finance mining projects because they treat the sector as risky.

It is imperative for the Department of Mines to court the financial institutions to start financing mining projects.

Government also needs to create a conducive environment for mining investors by ensuring that bureaucracy is rooted out of its systems.

It should not be taking ages for investors to acquire licences or get mining development agreements signed as this disappoints the concerned investors and has the potential to scare off other investors.

Malawi should also study the current best practices on taxation in other mining countries and come up with a competitive taxation rate.

It reflects badly on the country to hear that Paladin Energy, the previous investor in Kayelekera Uranium Mine in Karonga which closed due to low uranium prices, has resumed uranium mining at Langer Heinrich Uranium Mine in Namibia which was closed for the same reasons.

Malawi needs to study the taxation regime in countries like Namibia and apply a similar model to ensure that Kayelekera resumes production.

Investors cannot just be attracted by holding a forum, the best way to attract investor is to treat fairly the existing investors. 

The Ministry of Mining says it has fulfilled its plans to flush out illegal miners who invaded Chimwadzulu Corundum Mine, which is run by a local investor Mwalawanga Mining.

Director for Mines in the Ministry Samuel Sakhuta told Mining & Trade Review that his Ministry involved the Police, Ntcheu District Council, the local community and the investor to ensure that there is security at the site through supervision and monitoring of the site.

Sakhuta emphasized that it was through collaboration of the stakeholders that the Government managed to flush out the illegal miners peacefully.

“We have managed to remove the illegal miners successfully so if they can be found now that will be a new development that needs to be given a new approach,” said Sakhuta.

He, however, admitted that Government is struggling to deal with the issue of illegal mining describing the miners as unpredictable.

“Government always puts in measures to curb the malpractice but illegal miners keep on finding new ways of bypassing government effort,” he said.

Sakhuta also emphasized that government will ensure that the Company goes into production at the mine rather than just keeping the resource dormant.

Government awarded Mwalawanga Mining Limited the mining licence for Chimwadzulu Corundum after the licence for Nyala Mines Limited expired in October 2017.

Chairperson for the Parliamentary Committee on Natural Resources and Climate Change Werani Chilenga also complained over delays for the investor to start mining when representatives of the Ministry of Mining and Mwalawanga officials appeared before parliament.

He said such delays trigger illegal mining as members of the community may feel that the licence holder is no longer interested or has no capacity to conduct mining operations.

But Consulting Geologist for Mwalawanga John Nkhoma told Mining & Trade Review that the company has already bought processing equipment currently being kept in Blantyre waiting to be installed at the site.

Nkhoma said: “What is delaying the company to kick-start production is Environmental and Social Impact Assessment (ESIA) which is yet to be approved by Malawi Environmental Protection Authority (MEPA).”

“But we have purchased our processing machines and as soon as these illegal miners are moved out, we will install at the site because right now we cannot do that as the equipment may be stolen by the illegal miners.”

“Talking of the engagement with the community, I have to consult our management and am sure we will invite the parliamentary committee and other stakeholders to visit the area.” 

Corundum is processed into ruby and sapphire, which are ranked among the world’s expensive gemstones.

ASX-listed Lindian Resources says it is now fully permitted to execute mine construction works at its Kangankunde Rare Earths Project in Balaka as it has all the licenses and permits to carry out the project including a water permit, mining licence, environmental and social impact assessment licence and an explosives permit.

CEO for Lindian Alistair Stephens says in a statement announcing receipt of the water permit that the permit allows the company to extract water for both the construction and operation phases of the mining project.

Stephens says: “We are pleased to have now received our final permit for Kangankunde. This is an important milestone and we now have all necessary licenses and permits in place for the construction and operation phases.”

“We are now close to finalising the feasibility study which will showcase Kangankunde’s considerable value, the low CAPEX (capital expenditures) and OPEX (operating expenses) nature of the project and its superior economics. More updates will be reported in the lead up to the feasibility study which will confirm these metrics.”

Lindian Resources has ownership of Malawian registered Rift Valley Resource Developments Limited that has 100% title to Exploration Licence EPL0514/18R and Mining Licence MML0290/22, supported by an Environmental and Social Impact Assessment Licence No. 2: 10: 16.

Kangankunde amongst World’s largest rare earths deposits

In August last year, Lindian announced a maiden Mineral Resource Estimate (MRE) for the project which peged the rare earth resource at 261-million tonnes averaging 2.19% Total Rare Earth Ore (TREO) above a 0.5% TREO cut-off grade.

The MRE placed Kangankunde amongst the world’s largest rare earths deposits and as such a globally strategic resource for long term security of rare earths supply.

Lindian’s Executive Chairman Asimwe Kabunga expressed excitement over the development saying the MRE positions the project as one of the focal points for parties seeking secure, long term supply of REEs.

He said: “Our maiden Mineral Resource Estimate marks a key milestone for Lindian and positions us as a major player in the global rare earths sector. We can confidently claim that Kangankunde is one of the world’s largest rare earths projects superior in terms of tonnage matched with excellent grade and containing a high percentage of critical metal elements neodymium-praseodymium (NdPr), and uniquely, material that is non-radioactive.”

“This makes the project highly attractive to parties seeking secure, long term supply, many of which have expressed an interest in Kangankunde’s material. Our focus now turns to locking in these offtake agreements and advancing construction of our stage 1 plant to deliver first product in 2024.”

Project enjoying strong backing from government, local community

In her previous tour of the project, Malawi’s Minister of Mining Honourable Monica Chang’anamuno MP expressed satisfaction over the progress that Lindian Resources is making towards starting mine construction.

She said Malawi needs investors like Lindian, who have the capacity to do much work within a short period of time, so that the country starts benefitting from large scale mining projects as soon as possible.

Chang’anamuno said: “Let me say that I am much impressed with what Lindian is doing here and with the plans they have that they want mine construction to start as soon as possible.”

“I think Lindian is not in the group of many other companies that keep on renewing their exploration licenses again and again to the extent that we even wonder if they will do the actual mining.”

“With Lindian it means the country will start benefiting from the project soon in line with the country’s 2063 Vision and its 10-year implementation plan.”

The Kangankunde Project is also enjoying strong support from the local community since despite that the project is yet to reach production stage, Lindian Resources conduct a number of corporate social responsibility projects in the area.

Speaking when the Company donated 100-desks and chairs to Kangankunde Primary School, Senior Chief Chanthunya and Group Village Head Makolera expressed excitement with the development and appealed to Lindian to continue assisting people of the area.

“Several investors came to Kangankunde previously but did nothing. Therefore, initially we suspected that Lindian is in that group but they have already proved that they are serious in pursuing the project and supporting the local community,” said Chanthunya.

Kangankunde Civil Engineering Design

A local civil infrastructure engineering group Infracon leads the civil engineering design team for Kangankunde Mine.

Civil works programs consist of:

• Detailed engineering design and upgrade of 5km of access road to the M1,
• Design and construction of a mining laydown area,
• Design and construction of a plant workshop,
• Design and construction of an administration building,
• Design and construction of civil works for the process plant area,
• Design and construction of bore water field pumping and storage,
• Design and construction of potable water supply,
• Location of a weighbridge,
• Design, construction and security of an explosives magazine,
• Design and construction of power plant and capacity (third party provider),
• Design construction and location of a Tailings Storage Facility (TSF),
• Civil geotechnical survey (completed),
• Planning for future expansion area allocation.

Mineralisation at Kangankunde

The mineralisation at Kangankunde is dominated by light Rare Earths of Cerium (Ce), Lanthanum (La), Neodymium (Nd) and Praseodymium (Pr). The total of Nd+Pr content in oxide form constitutes an average of 20.6% of the TREO in all holes reported to date.

All drill samples are routinely scanned on site for radiation with consistently low counts per second (cps) returned. These low readings are supported by the low radiation content of the rare earths bearing monazite mineralisation.

Kangankunde is a carbonatite with variable contents of iron oxide, manganese oxide and pink potassic alteration. To date all the carbonatite assayed has been mineralised with Rare Earths elements hosted in the mineral monazite. A typical monazite contains various quantities of light Rare Earths. The monazite at Kangankunde has an unusual variation including Rare Earths elements like Praseodymium (Pr) and low Thorium levels (Ce,La,Nd,Pr)PO4.

The Ex-Miners Association of Malawi ([EMAM] has embarked on a project to enhance skills of women in extractive industry in Neno District.

The initiative is targeted at imparting skills and knowledge on the women on best practices in small-scale mining ventures in order to transform their livelihoods.

It is also meant to drill the women on fighting abusive transactions by some local and international buyers of minerals, who allegedly take advantage of rural women’s knowledge gaps to reap them off by buying their minerals at very low prices.

The project which is financially supported by The Southern Africa Trust, an international NGO, headquartered in the Republic of South Africa is dubbed ‘Her in the Mines Neno District Dialogue.’ 

“This is a shared purpose aimed at addressing the challenges faced by women in the extractive industry in Neno District, Malawi. Our dialogue is a collaborative effort between the Ex-Miners Association of Malawi (EMAM), the Malawi Women in Mining Association (MAWIMA), and the support of The Southern Africa Trust,” EMAM’s Program Manager Richard Tamva said in an interview.

He said some of the project’s goals are to remove barriers for women to have access to information and participate in decision-making processes related to mining investments; and challenges women in the extractive industries undergo.

“We also want to enable the voices of women to be heard through organizing dialogues on challenges facing women due to mining investments, including benefits, compensation, damage, or loss. Apart from that, we want to create awareness among communities in extractive areas of their constitutional rights, land rights, and mining legislation,” he said.

This, he said, comes at a time when the government has placed mining as one of the drivers of the national economy.

EMAM’s President John Dick stressed the need to fully involve women on mining issues considering that they play an important role in day to day life.

He said: “It is sad that some people within the mining industry chain are being subjected to abuses – be it on prices or land rights – hence we feel this project is vital to address that.”

“Historically, the extractive industry has been characterized by gender disparities, with men dominating the sector, leaving women with limited opportunities to participate and benefit from it.”

“Therefore, women have not equally benefited from extractive industries rather are the most negatively impacted.”

“Besides, mining has been associated with poverty, violent conflicts, water and air pollution, land dispossession, food insecurity, and the spread of occupational diseases such as silicosis and TB, and this is time to reverse the trend.”

A grouping of civil society organisations (CSOs) working in the extractive sector in Malawi, the Natural Resources Justice Network (NRJN), has called on Government to put in place measures to punish extractive firms that do not comply with Extractive Industry Transparency Initiative (EITI) standard of Beneficial Ownership Disclosure (BOD).

A beneficial owner in respect of a company means the natural person(s) who directly or indirectly owns or controls a corporate entity.

All EITI implementing countries including Malawi are recommended to maintain a public register of beneficial owners whereby an extractive company is required to disclose information including the identity of the beneficial owner; implying the name, nationality and country of residence, and whether the owner is politically exposed.

However, Coordinator for NRJN Kennedy Rashid told Mining & Trade Review that the EITI standard on BOD requirement is still  facing challenges since requirement provisions for some companies do not allow disclosure of some information as per standard.

Rashid said: “The issue of beneficial ownership disclosure commitment was indeed agreed upon at EITI as per standard and the idea is to incorporate the standards for BOD in the country and enforce them per requirement.”

“In Malawi, as CSOs we have noticed some positive steps as in disclosure of the legal owners for the extractive companies in Malawi, as evidenced by the beneficial owner disclosure in the MWEITI reports.”

“Nonetheless, we have noted some challenges and gaps in the process. The Companies Act seems like does not provide for mandatory disclosure of beneficial ownership information as it does not require applicants to declare identity number, phone number, number and class of shares owned, which is required under the EITI regulations.

“in the register that is usually in the EITI reports, there is no clear information on how a particular entity or individual is a beneficial owner of an extractive company.”

He also said local citizens have limited access to the required information as many companies choose to put it only on online platforms.

Rashid said: “In Malawi, citizens have not been able to access information on beneficial ownership disclosure. This is due to the fact that most of the information is centrality managed.”

“Though the BOD proposal is to make information available and accessible, the aspect on accountability still remains a challenge.”

 “There is, therefore, a need to make BOD mandatory in Malawi with sanctions for non-compliance.”

The EITI Standard requires that EITI implementing countries should request, and companies disclose the nature of beneficial ownership of oil, gas and mining companies.

Commenting on the development, Coordinator for Chamber of Mines and Energy, Grain Malunga, however, said the Mines and Mineral Act already mandates disclosure of beneficial ownership for any mining or exploration company applying to invest in the country’s extractives sector.

He said: “The Mines and Minerals Act mandates the applicant to reveal beneficial ownership of a mining or exploration company including residential address.

“In terms of licensing, this is done in a transparent manner. Let us wait and see how the Mines and Minerals Regulatory Authority will operate.”

The Malawi Government developed the organizational structure for a Mining Regulatory Authority that we will begin operating once the new Act is operationalised.

Amidst concerns that graduates in mining related courses in Malawi universities and colleges are not being properly utilised locally, the government has challenged the private sector to scale up job creation.

Several mining related courses were introduced in Malawian universities and colleges several years ago under the World Bank and European Union funded Mining Governance & Growth Support Projects but there are grave concerns from stakeholders that the sector is failing to create jobs for the graduates leaving many jobless.

But in her response to a Mining & Trade Review questionnaire, Ministry of Mining Spokesperson Tiwonge Kampondeni said the courses are relevant and in line with the current trend in the mining sector.

“Government cannot employ all graduates. The private sector – which is touted as the engine for development – should create such jobs,” she said.

However, Kampondeni said it is envisaged that once large-scale mining takes place, many graduates will be employed.

Apart from the newly introduced mining related courses at MUST and MUBAS, the University of Malawi (Chancellor College) is also providing courses in geology, according to Kampondeni.

She said: “As for skills development, we are working with the Ministry of Labour through Technical Entrepreneurial and Vocational Education and Training Authority (TEVETA) and Zantchito Skills for Development Project, under the British Council.”

“Ngala College has already started offering some of the courses that we need. Research has shown that one engineer needs 4 technicians and over 15 artisans.”

Kampondeni said the Ministry has intensified training programmes in the sector in response to increased small-scale mining ventures in the country

“We are engaging communities within the mining areas to formalise their activities,” said Kampondeni.

She explained that the government will continue to formalise small-scale mining through the formulation of cooperatives.

Recently, gold deposits were discovered by locals in areas around Milepa in Chiradzulu stretching to other areas in Zomba and Mulanje, along the banks of Namadzi River and other nearby streams.

The small scale miners interviewed in the areas complained that they lack proper detection and mining equipment, pleading with the government to come in and assist.

But Kampondeni said the role of government is only to provide a conducive environment for the private sector to perform.

I doubt if the Government can procure equipment for all miners looking at the Government resource envelope and competing needs,” she said.