ASX-listed resources group DY6 Metals has announced that it has submitted five exclusive prospecting licence (EPL) applications totalling 838[LK1] .2km2 in  Malawi to the Ministry of Mining for tenements it considers to be highly prospective for rare earths and lithium.

The Company is in the process of submitting an Environmental and Social Management Plan for each of these new applications, and on the basis these are acceptable, the licences should then be granted by the Ministry.  

CEO for DY6 Mr Lloyd Kaiser says in a statement that the licence areas under application are “Mzimba” (West, Central and South) and “Karonga”.

He explains that the recent applications will expand the Company’s overall strategic footprint in Malawi to a total 1,080 km2.

Meanwhile, the Company’s geological team has undertaken a reconnaissance field visit over parts of the licence application areas during December and February

Mr Kaiser reports that seven random reconnaissance rock chip samples from the Mzimba license areas have been submitted for laboratory analysis in South Africa.

He says: “We are very excited about these four strategic lithium license applications in northern Malawi. Field reconnaissance has identified several pegmatite systems, which are currently being worked by artisanal miners for a range of minerals, including the gemstones tourmaline and beryl, and lithium micas.”

Upon granting of the EPL, the exploration team will undertake extensive geochemical programs and detailed geological mapping over the  four new licence areas  in the coming months.”

Mzimba Lithium Project

Located in the Mzimba district of central Malawi about 200km north of the capital Lilongwe, the Mzimba Project covers an area of approximately 710.5km2 extending through three separate tenements namely: Mzimba West, Mzimba Central and Mzimba South.

A desktop study identified two areas for field inspection by DY6 staff and a field reconnaissance program was conducted over parts of the tenement area during November 2023 and February 2024. The first area is 65km north of Mzimba Township covering portion of the Traditional Authority Mtwalo, Chindi and part of Inkosi Paramount Chief M’belwa.

Reports indicate that regional geological mapping and reconnaissance surveys were conducted in the area by British Geological Survey in the 1980’s, and Malawi’s Geological Survey Department. The results indicated that Mzimba district has potential for a range of gemstones (such as aquamarine, tourmaline, beryl, and ruby) and industrial minerals occurring in pegmatites.

Karonga Lithium Project

The Karonga Lithium Project is located about 440km north of the capital Lilongwe and covers a total area of 36.2km2. The area can easily be accessed using the Karonga-Chitipa M1 Road turning to the west at Kasikizi School signpost along the M1 Road. DY6 also secured a 6-month option over a granted licence adjacent to the company’s recent EPL.

During late November, DY6’s exploration team undertook a reconnaissance field visit  in the Karonga region, predominately to the south of the area selected that adjoins the recent licence application.

The Karonga area is associated with a series of N-S trending ridges with metamorphic Basement complex rocks commonly identified as windows within the Karroo System which overlies the basement. The Karroo System units are typically sandstones with carbonaceous shales formations. Pegmatite float material was noted in the Mwesa River to the south of the Company’s Karonga license application, which cuts NE-SW through the area.

Samples collected from the Karonga area were taken to Geological Survey Department for preparation. DY6 considers the Karonga Lithium Project to host the same underlying geology as the areas inspected to the south.

DY6 PURSUES TUNDULU RARE EARTHS PROSPECT IN PHALOMBE

Meanwhile, DY6 Metals has also submitted an exclusive prospecting licence application for 91.5km2 of the Tundulu carbonatite ring complex in southern Malawi’s district of Phalombe, which has significant potential for the prospecting of rare earth elements (REEs).

Results of shallow historical drilling at Tundulu undertaken by the Japanese International Cooperation Agency (JICA) in 1988 up to a maximum depth of 50m included:

• 41m @ 3.7% TREO, from 8m (JMT-22);

• 17m @1.3% TREO, from surface and 14m @1.1% TREO, from 21m (JMT-14);

• 11m @ 2.2% TREO, from 17m and 14m @ 4.1% TREO, from 36m (JMT-17); and

• 14m @ 1.1% TREO, from 3m (JMT-07).

Mr Kaiser reports that the Company’s geological team recently undertook reconnaissance field visit over parts of the licence application area and samples have been submitted for laboratory analysis in South Africa.

Mr Kaiser says: “We are very excited about this strategic licence application in southern Malawi. Tundulu is a known carbonatite ring complex close to our flagship HREE Machinga Project with an interesting profile of bastnaesite and apatite with abundant REE mineralisation, and easily accessible by road. Tundulu will complement our existing REE projects, Machinga and Salambidwe. While the Company waits for the licence to be granted, the focus of the exploration team will be on undertaking a detailed geological and geophysical review of this new licence over the coming months.”

DY6 has completed a maiden exploration-drilling program for 4 ,543m at the Machinga REE and Niobium Project in southern Malawi.

Besides, the Company is prospecting for REEs and Niobium at Salambidwe in Chikwawa in the southern Shire Valley area where it has completed a comprehensive geochemical and geophysics program.

DY6 is also conducting exploration for platinum group metals and copper at the Ngala Hill prospect in Southern Malawi.

It is unfortunate that despite the minerals sector being touted as a priority sector to support industrialisation in Malawi 2063, the Ministry of Mining continues to be neglected in terms of funding.

As reported in our article on Page 8, the Ministry of Mining’s provision in the budget continues to be much lower compared to other Ministries such as Energy and Natural Resources despite the huge responsibility that the Ministry has, which is to efficiently govern the sector to maximise revenue generation.

We agree with Coordinator for Natural Resources Justice Network (NRJN) Kennedy Rashid quoted in the article that such underfunding to the Ministry signifies that mining is not a priority in the budget.

As Rashid says this is very unfortunate because it is through investing in the sector that we can create a vibrant mining industry capable of financing other social sectors such as health and education.

With this underfunding, the Ministry will certainly fail to fulfil plans and mandatory duties including; managing the development of mineral resources; monitoring and regulating operations of the mining industry; and monitoring of seismic activities.

This implies that the sector will remain in a mess with illegal mining continuing as the Ministry will fail to finance operations of Mines Officers in mining districts.

Therefore, as NRJN Programmes Coordinator Joy Chabwera suggests in the article, it is important that Government develops a budget for the next financial year that will enhance the mining sector’s performance and impact in areas of; infrastructure development, capacity building, transparency and accountability mechanism, community development, environmental protection, stakeholder engagement and consultations, research and data collection and, diversification of economy.

In order to ensure sustainable growth of the industry, resources should be allocated for capacity building programs aimed at enhancing the skills and knowledge of local communities, government officials and industry stakeholders.

Funds should also be allocated for the operationalization of the state owned mining company which government established to invest in mining projects and partner private firms in mining ventures.

We also propose that Government establishes a revolving fund specifically for artisanal and small scale miners (ASMs) to assist them with capital to purchase mining and processing equipment.

We believe that this revolving fund will help in increasing productivity in the ASM subsector and assist in poverty alleviation by aiding the ASMs to graduate into mechanised miners.

The only way Malawi’s mining sector can develop is by assisting ASMs to develop into cooperatives that should grow into large commercial entities.

Mine drainage or dewatering refers to the depressurization of water-bearing formations-such as aquifers which may occur over, under or within the material being exploited or quarried. This is done for different reasons that start and usually end with economics, but include absolute mining feasibility, operational efficiency, slope stability, ground movement and safety.

Mine drainage involves a wide variety of ground-water problems but application of evaluation techniques usually brings successful results. The determination of reliable aquifer characteristics in terms of-transmissivity or the hydraulic conductivity and the coefficient of storage together with knowledge of the aquifer geometry and the nature of boundary conditions, as determined by field exploration and testing methods, forms the basis for effective planning of mine dewatering systems.

There have been recent advances  in aquifer modeling through the use of GIS, modelling tools, have increased the geoscientists  ability to provide reliable quantitative evaluations in the complex geologic settings . Early integration of dewatering programs with the exploration, geotechnical, mine planning and operational efforts can have significant economic benefit.

     Importance of Mine Dewatering

• To effectively lower the groundwater table outside of pits
• To reduce water inflow into pits, or remove water from pits.
• To remove excess water from unconfined aquifers.
• To eradicate the negative impacts associated with excessive water on mining site.
• To prevent mine flooding to maintain worker safety and avoid environmental damage.
• To ensure stability of mine walls during and after excavation
• To optimize mine production and reduce operational costs

                        1. Hydrogeological Conditions

The hydrogeologic evaluation of ground-water problems may not be difficult if the geology is clearly understood. Many situations, however, require extensive testing and evaluations rather than reliable projections of ground-water control. Solid rock aquifers,aquicludes or aquitards, in which water movement is through fractures, faults,joints,or fissures, tend to be the most difficult to evaluate. Unfortunately, investigations of many mining prospects concentrate on the ore that the potential for mine drainage problems is neglected until late in the planning stage.

The potential impact of ground water inflow to a mine can often be assessed at the pre-feasibility study stage.  It is very important that hydrogeological investigation is started at the same time as the geological investigation.

The hydrogeologist can often determine the extent of ground-water problems by reviewing existing borehole exploration logs. Unfortunately, exploratory boreholes are usually drilled to delineate and evaluate ore bodies, and insufficient attention is given to logging and classifying unconsolidated materials and water-bearing rocks. With minimal additional expense, exploration boreholes can be used to show depths of unconsolidated sediments, classification and lithology of bedrock, zones of caving and water production from an air drilling operation.

                      2. Properties of Water bearing Formations in a Mine

 Evaluations of mine ground-water problems have in common the determination of certain properties of the water-bearing formations and their hydrogeologic environment.

                      (a) Boundary Conditions.

 Boundary conditions include sources of recharge, such as surface water bodies or leakage through other formations, or barrier boundaries such as impervious layers on valleys, which represent no-flow or lesser flow conditions in part of the affected area. Recharge conditions are improperly understood during mine excavations

                       (b) Local Water Budget.

The local water budget of an aquifer is the long-term allocation of the available inflow water–from precipitation, regional flow or recharge sources-to components of natural or artificial discharge. The water budget determines the perennial or seasonal replenishment that a mine drainage system will have to handle after a requisite amount of local aquifer storage is depleted. In many instances, the water budget analysis is critical to the long-term water supply available to the ore process plant. The planning, execution and evaluation of such tests, and the determination of the adequacy of data also forms fundamental basis.

                         (c) Aquifer Coefficients. Transmissivity (T)

The measure of the ability of the entire thickness of a unit of aquifer to transmit water from place to place in response to a unit gradient. It is the algebraic product of hydraulic conductivity and aquifer thickness. The Coefficient of Storage (S) represents the amount of water released from (or added to) storage in the pore space of a unit volume of rock in response to a unit of head change. Reliable values for these coefficients permit mathematical projections by standard equations of aquifer behavior in response to pumping. Particularly important in many mining situations is the degree of uniformity of these properties–vertically and horizontally within the area influenced by mine water pumping.

.                           3.  Conclusion

Geologic and soil formations at the mine will dictate the type and application of water control systems during dewatering process. The hydrogeologist can review existing data, prescribe testing procedures and specify methods for dewatering open of the mines. These methods have their respective limitations; but with an understanding of the geologic and hydrologic conditions of the mine, dewatering is very effective, feasible.

Abstract

Mining projects attract investment if the country’s incentives and fiscal regime are more favourable than alternative investments. Malawi risks chasing away mining investment if its fiscal regime is enacted into law and does not give flexibility in terms of making projects financially and economically viable. There is need always to refer to what is trending in the region around us in order to be competitive. Care should be undertaken in order to exercise reasonable benefit sharing arising from mining projects without giving away too much. This paper looks at issues that need to be considered in order to attract investment in the mining sector.

The government of Malawi has set its development priorities into three sectors of Agriculture, Tourism and Mining (ATM). These are also well expounded in the Malawi 2063 Vision document. Agriculture and Tourism have specific investment incentives. The mining sector has no amalgamated investment incentives and reliance is put on window shopping all over general incentives. The Ministry of Mining needs to come up with a investment incentive package that will be used in concluding mining agreements.  It takes too long to conclude Mining agreements because of the diverse nature, institutional interest and availability of the government negotiating team. This must be attended to because it frustrates investors and more often leads to rent seeling behaviour and geopolitical influences. This paper looks at available general incentives and fiscal incentives that must be considered in order to consolidate Malawi’s readiness in attracting mining investment.

1.0             General Incentives

1.1         Geological Prospectivity

Recent geophysical survey (around 2013) and selected geological mapping has improved availability of geological and geophysical data for mineral, oil and gas exploration. This is a plus for the country although recent mineralpermits acquisition has been infiltrated with permit speculators with no adequate risk money for grassroot exploration. Strict monitoring of permit conditions need to be followed in order to clean up the mining cadastre platform.

1.2         Enabling Infrastructure

There is no doubt that good road infrastructure, easy access to sea ports, excellent telecommunication and reliable banking system are conducive to mining investment. The current situation puts a plus to telecommunication.

Road access to mining projects is fair but not ideal for transportation of mineral commodities. Access to sea ports (Nacala, Beira and Dar es Salaam) have a fair amount of logistical problems. There are efforts to improve on rail access and to solve handling logistics to improve turn around time.

The banking system does not have enough capital to finance mining projects. This has favoured off shore capital markets and creation of opportunities for lines of credit for local banks. Foreign exchange regulations and repatriation of initial capital, dividends and interest should be granteed in order to attract investment capital. Double taxation treaties are necessary with countries such as United States of America, the European Union, Britain, South Africa, India, Australia, China and Canada.

1.3         Rule of Law

Investor confidence is mixed in terms of upholding rule of law in Malawi. It takes too long to solve investment disputes. The recent establishment of Commercial and Industrial Dispute Court may improve delivery of justice. The justice system needs to earn lost confidence.

1.4         Political stability

Political stability brings a sense of a stable investment environment. Malawi is one of the few countries that is known for political stability. There has been stable and fair transfer of political leadership. This is good for long term investment projects such as mining with over 10 years of  project life.

1.5         Sense of security

Individual security in Malawi is granted. Police works tirelessly in securing public and private property. Crime busting system works well and community policing works well too. Invetsors are assured of personal security and their assets are secured too.

1.6         Security of Tenure

Malawi is signatory to various international investment guarantee protocols such as membership in International Court of Justice and Multilateral Investment Guarantee Agency. This offers confidence in settlement of international investment disputes. Recent geopolitical risks have emerged that could polarise security of tenure in country alignment. Political leadership should guard against this emergent geopolitical risk and temptation of rent seeking behaviour among political leaders. The executive arm of government needs to be guided and motivated accordingly in order to avoid actions that may lead to breakdown of security of tenure for mining projects.

1.7         Policy and regulatory certainty

Malawi started its journey of promoting mining investment through the Mines and Minerals Act of 1981. This was replaced by the Mines and Minerals Act of 2018 after a lengthy period of national consultation from 1997. This introduced sustainable development aspects including community benefit sharing and community engangement arrangements. This Act is perceived to have been the best and well consulted by all stakeholders. 5 years later in 2023, another Mines and Minerals Act was enacted with the aim of establishing the Mines and Minerals Regulatory Authority. This act was hurried with no consultation with stakeholders and was passed taking advantage of misinformation related with perceived illegal mining activities and illicit financing flows in the mining sector. This Act has brought institutional disorientation and the need to restructure the Ministry of Mining in terms of the role the Geological Survey and the Department of Mines will play in promoting the Minerals sector.

The National Mining Company and Malawi Development Corporation were incorporated with the aim of spearheading minerals development and development finance respectively. The challenge has been sourcing seed finance. These two institutions are necessary in order to hold government equity in mining and promoting speedy financing of strategic mining projects that will speed up wealth creation and and economic development.

1.8         Smart partnership among stakeholders in the mining sector

There is no doubt that there is mistrust and lack of cordial relationship between government and mining companies. This has been exposed in recent political and advocacy platforms. Government needs to engage its citizens on the activities of mining companies. Mining companies need to engage government more in terms of promoting transparency and accountability in their exploration and mining activities. The Malawi Chamber of Mines and Energy is playing a crucial role in promoting integrity, transparency and accountability in the minerals sector. The Chamber members have put Malawi on the world mining map through discovery of world class critical minerals such as rare earths, niobium, uranium, rutile and graphite. The relationship that exists between government and The Chamber needs to be improved and safe guarded in order to develop effectively the minerals sector.

The above general observations should be taken seriously and addressed where necessary in order to promote good service delivery for facilitating mining investment and building trust among mining investors.

2.0     Fiscal Incentives

Fiscal incentives are sometimes viewed as loss of potential government revenue. Others call them subsidies. How does one lose that he never owned? How do you attract green field investment without a carrot? Can mining investment be easily attracted into a country that has no mining tradition? Fiscal incentives are necessary in order to attract mining investment especially in a country that is trying to develop its mining sector and surrounded by countries with a mining history and well established.

2.1     Exploration Expenditure

Exploration activities are risky undertaking. Exploration capital can be recovered when an economic mineral deposit has been discovered. Exploration finance can not be recovered where no mineral deposit has been found. In order to attract exploration expenditure the government should guarantee recoupment of exploration finance against taxes in the iniatial years of production.

2.2     Expatriation of Capital Expenditure

Initial Capital expenditure is usually sourced through capital markets and equity holders. These look for returns on their investments and look for alternatives where they can earn more dividends and interest. Recoupment of this capital must be easy and in the shortest period. The Central bank should be able to guarantee this.

2.3     Value Added Tax Claim   

Exploration companies should be allowed to register for VAT and be able to claim input VAT without unnecessary hussles.

2.4     Royalties and Export Levies

Government should acknowledge that royalties and export levies are a form of tax and therefore should be tax deductible. The Mode of calculation for royalties and export levies should be clearly explained. It may be agreed on gross revenue or ex-mine mineral value.

2.5     Corporate Tax

Mining projects are capital intensive. In order to reduce debt service burden, it is recommended that apart from loss carry forward for a certain period, there is need to reduce corporate tax during the period of debt servicing from 30% to 25%.

2.6     Resource Rent Tax

Resource rent tax applicability is complex and difficult to implement. Any taxes of super profits are a captured through royalties therefore there is no need to apply this tax. Most countries in the region scrapped this tax.

2.7     Effective tax rate

An effective tax rate is the total tax revenue that goes to government from a mining project. A reasonable effective tax rate that a government should benefit from a mining project mostly financed by a mining company should be between 51 and 60%.  This will attract the private sector into investing in the mining sector. It must also be understood that a mineral is of value once it is out of the ground.

3.0     Conclusion

The mining sector requires an incentive package under ATM. This will attract investment in the mining sector and reduce hurdles and speculations of outwitting each other when undertaking mining agreement consultations. With this investment package in place, it is easy to train the negotiation team to effectively hurdle mining agreements and reduce consultation period.

It must be understood that no any amount of money will buy trust because trust has to be earned.  Mining projects promote local content and increase local revenue through provision of goods and services. Government benefits from Pay as you earn (PAYE) and VAT to fill revenue gaps. Mining benefits economic growth and development. One mining project can not transform an economy of a country. Several projects will create more wealth and sovereign fund that will benefit future generations.

Let us be wise and investor friendly in order to create wealth for agricultural productivity, industrialization and urbanisation.

Stakeholders in the extractive sector have expressed concern over continued underfunding to the Ministry of Mining describing it as a clear indication of government’s lack of interest towards the minerals sector.

For instance, in the previous financial budget, Ministry of Finance allocated to the Ministry of Mining a provision of about MK3,6-billion which was later revised to about K3,9-billion due to 44 percent devaluation of the Kwacha, which stakeholders has described as inadequate for the Ministry to efficiently conduct its duties.

The Ministry of Mining’s provision in the budget was much lower compared to other Ministries of Energy and Natural Resources which were allocated about MK18, 3-billion and MK12, 3-billion respectively.

Coordinator for Natural Resources Justice Network (NRJN) Kennedy Rashid told Mining & Trade Review that such underfunding to the Ministry of Mining signifies that the Ministry is not a priority in the budget.

Rashid said this is unfortunate as the same Government touts the mining sector as one of the main pillars of the Malawi 2063 economic agenda.

He said: “The challenge we have is prioritization. At times it seems we do not even follow Malawi 2063 in planning.”

“If financed and governed properly the mining sector can finance the social services.  But by neglecting the Ministry, it implies that less focus is put on wealth creation.”

“We are not investing as urgently required in the sector. The Ministry of Finance should be following the priority sectors as per Malawi 2063.”

“We cannot attain our economic goals if we do not invest in our economic programs.”

Rashid said the minerals sector has the capability of generating sufficient funds to uplift the economy only if the government shows interest to invest in it.

The 6th Malawi Extractives Industry Transparency Initiative (MWEITI) report indicates that the mining sector alone generated funds amounting to about MK24, 4-billion from July 2020 to June 2021.  

It is expected that due to continued underfunding, the Ministry of Mining will likely fail to fulfil plans and mandatory duties including; managing the development of mineral resources; monitoring and regulating operations of the mining industry; and monitoring of seismic activities.

The Ministry last year launched the 2023-2027 strategic plan whose implementation largely depends on the availability and efficient utilization of financial resources from the Ministry of Finance through the Program Based Budget covering both Recurrent and Development Expenditure; and funding provided by Donors, Development Partners and other bodies.

The Ministry of Finance has been conducting budget consultation meetings to solicit suggestions for the 2024/25 financial budget to be deliberated in the next sitting of parliament expected to run from February 9 to April 5, 2024.

Commenting on the issue, Coordinator for Chamber of Mines and Energy Grain Malunga agreed with Rashid suggesting that Government gives attention to wealth creation sectors including mining.

Malunga said: “My take on budget consultation is that 100% pro poor budgets promote consumption with minimum private sector growth.”

“Let us think seriously of wealth creation through technical education industry and trade.”

In a separate interview, Programs Coordinator for NRJN Joy Chabwera suggested that the government should develop a budget that will enhance the mining sector’s performance and impact in areas of; infrastructure, capacity building, transparency and accountability mechanism, community development, environmental protection, stakeholder engagement and consultations, research and data collection and, diversification of economy.

Chabwera said: “Allocate resources for capacity building programs aimed at enhancing the skills and knowledge of local communities, government officials and industry stakeholders.”

“They should also allocate funds for the establishment and maintenance of robust transparency and accountability mechanism in the extractive sector which includes supporting initiatives such as the Extractive Industries Transparency Initiative (EITI) implementation, which promotes disclosure of revenue flows and fosters public oversight of extractive activities.”

“On stakeholder engagement and consultations, I think it is good if they allocate a portion for stakeholder engagement and consultations processes to ensure that interests and concerns of all relevant stakeholders including local communities, CSOs, and industry players are adequately addressed in decision making processes related to the extractive sector.”

Chabwera also explained that through prioritization of these areas in budget allocation, the Ministry of Finance can contribute to the sustainable development of the extractive sector in Malawi, promote inclusive growth, and ensure that the sector benefits both present and future generations.  

The Ministry of Mining is expected to undertake a mid-term review of its strategic plan in 2024/2025 financial year to establish progress made, whereby a full review of the plan will be conducted at the end of the implementation period in 2027.

Civil Society Organization (CSO) working in the extractives sector under the umbrella of the Natural Resources Justice Network (NJRN) have expressed concern over Malawi’s delays in embracing strategies specifically focusing on green minerals that are found in the country.

The country has development strategies that focus on the entire mineral sector unlike other African countries that have developed specific strategies bearing themes of the green minerals per African Green Minerals Strategy (AGMS).

AGMS is a continental green mineral strategy with the vision of ‘An Africa that harnesses green mineral value-chains for industrialization and electrification, creating green technologies and sustainable development to enhance the quality of life of its people.’

The Strategy focuses on four themes that support the vision of the strategy namely: advancing mineral development; developing people and technological capability; building Key value-chains; and mineral stewardship.

Coordinator for NRJN Kennedy Rashid said even though the country is doing well in some areas within the sector, there is a lot more that the Ministry can do in order to ensure that Malawi really achieves wealth creation.

Rashid said one of the areas that the country needs to work on is that of beneficiation and value addition of the raw green minerals that are found in Malawi.

He said: “In rating the Ministry of Mining, it would be great to acknowledge the efforts that have been shown this far in capacity building.”

“We have managed to conduct geological mapping and other geological studies as evidenced with the Geological Mapping and Mineral Assessment Project (GEMMAP).”

“But I am not sure that we have done enough on technological enhancement as we still rely on foreign institutions to assist in scientific analysis of the green minerals.”

“Right now, we do not have the required laboratories with international certified standards for industrial testing of samples of these energy minerals.”

Rashid said such a situation manifests that the country seems not to have strategies on how it can beneficiate the green minerals.

Malawi is reach in green minerals including; niobium, are earth elements both heavy and light elements, titanium (rutile), nickel, graphite and some pockets of lithium.

But responding in an emailed questionnaire, Public Relations Officer for the Ministry of Mining, Tiwonge Kampondeni said the Ministry has strategies in place to ensure that the country’s green minerals are protected and contribute to socio economic development.

Kampondeni said the government through the Ministry is promoting value addition within Malawi to ensure that mining activities are benefiting both the government and the country’s citizens.

She said: “Instead of sending samples outside the country and letting the processing of minerals be done outside the country, we want all this done in Malawi.”

“As a government, we need certified laboratories and refinery plants which may take a little longer as it would require huge sums of money but it is where we are going as a Ministry.”

“We are also making sure that local content framework should be emphasised where locals should participate in all levels of the value chain.”

“We are making sure that licences are issued within a short period of time and also taking a collaborative approach in mining where all stakeholders take part in coming up with a sustainable mining sector.”

Kampondeni said that the Ministry is also ensuring that companies are transparent enough in developing and compiling their exploration data.

As one way of ensuring win-win deals between government and companies, Kampondeni said the Ministry is making sure that Mining Development Agreements (MDA) for all minerals including green minerals are properly negotiated for the benefit of Malawians.

Kampondeni also said to underline the Ministry’s commitment in developing green minerals, the Ministry of Mining attended a conference on green minerals in Saud Arabia last month.

The AGMS strategy aims at increasing geological knowledge, conducting feasibility studies to attract investment, establishing infrastructure for an enabling environment and aligning mineral resource management with the African Mining Vision.

The strategy also focuses on developing people and technological capability by identifying skills needed to capitalise on opportunities, and building the institutions to generate them.

AGMS establishment will also build Key Value-Chains to achieve resource-based industrialisation and access wider regional and continental markets through the African Continental Free Trade Area (AfCFTA) following the establishment of battery and electric vehicles value chains, starting with two and three wheeled vehicles and commuter busses.

According to the strategy, mineral stewardship will responsibly guide the environmental, social and governance aspects of green minerals together with material reuse and recycling.

The African green minerals strategy also focusses on minerals critical to energy transition, high tech and defense industries that have few producers and/or supply risks.

It focuses on access to critical minerals becoming an energy security issue, and also Critical Minerals critical to consumer countries seeking to secure their supply chains so often couched in geopolitical/ strategic term.

African green minerals are gaining an upsurge in demand in energy technologies including wind, solar, electric vehicles, switching fuels, grid expansion, hydrogen, low carbon energy sources and many others.

Local firm Akatswiri Mineral Resources says it has completed Phase 1 drilling programme for the Chambe Basin Rare Earths Exploration Project in Mulanje Mountain, Southern Malawi.

Akatswiri Chairman Hilton Banda says in an interview that the Company is now waiting for the drilling results as the samples extracted from the site are being processed at a laboratory in Perth, Australia.

Banda explains that he is confident of coming up with exciting results because rare earth mineralisation is visible in all the samples.

He says: “Chambe is a unique rare earths deposit as it is an ionic clay deposit. These deposits generally have several advantages over hard rock deposits, including lower operating and capital costs and shorter timelines for development.”

“Chambe is one of the few large ionic clay-hosted rare earth elements (REE) deposits outside of China, where currently a significant portion of global REE production is sourced.”

The Chambe basin has a central part that has recessively weathered soils that are up to about 15 m thick containing REE’s of the ionic adsorption.

Banda says such REEs in ion-adsorption deposits can be extracted by simple leaching of common chemicals in contrast to other types of REE deposits, which require complex and expensive processing.

“Rare earth recovery will be by simple mining and processing methods as the thick intercepts near surface means simple low -cost conventional and free -dig open pit mining,” he says.

Since Mulanje Mountain is one of the leading tourist destinations in Malawi, he explains that Akatswiri is pursuing a Sustainable Mining and Tourism approach where by adopting open -pit mining with responsible rehabilitation practices will be essential to conserve the environment while extracting REEs.

“The mining project will prioritise the protection of waterways (tributaries) by strategic geotechnical drainage system and an aerial way to transport the ore from the plateau which is the most reliable way to reduce vibration of ground mode of transport, and also a source of mine tourism attraction,” he says.

Akatswiri has been engaging members of the local community in the area including at District Council level to provide them an opportunity to express their views regarding the project, discuss the environmental and social impacts of the project, and derive mitigation measures of the adverse negative impacts of the project.

The Company organised a tree planting exercise in liaison with members of the community as part of its environmental conservation programme for the area. The Akatswiri management team comprises top notch business executives and professionals including Mr Banda, Mrs Josephine Banda as Executive Managing Director, Mr Ashutosh Srivastava as Board Technical Advisor, Mr. Jason L Greive as Non-Executive Director, Mr. Bilal Mahomed Non-Executive Director, Mr Nathaniel Ferrero Non-Executive Director, Mr Kalekeni Kaphale Company Lawyer, Dr. Joshua Chisambi Chief Geologist, Mr Gavin Beer Consulting Metallurgist, Johnstone Livata Director of Finance and Maston Gondwe Accountant.

Managing Partner for Perekezi ASM Consultants Chikomeni Manda has urged Artisanal and Small Scale Miners (ASMs) in Malawi to manage their finances prudently in order to be able to access loans easily for the growth of their businesses.

Manda, who has experience working in the ASM subsector for years, told Mining & Trade Review that when the ASMs are able to manage their finances properly they easily finance value addition of their products, which helps them realize increased revenue for the growth of their business.

Manda said that proper management of finances will also help the ASMs to have collateral to access loans from banks and invest more and grow their business.

He said: ‘’Most of the ASMs fail to get loans from banks because they do not have collateral. This is a huge setback to the ASMs who fail to to add value to their products due to lack of finances.”

“Consequently, these ASMs sell their products to middle men at a very cheap price.”

Manda observed that most of the ASMs do not take the business seriously as they work on hand to mouth basis instead of properly managing their daily finances to add value to their products and realize more revenue from sales.

Manda also urged ASMs to always acquire information on availability of mineral resources from relevant stakeholders to avoid losing money in following up rumors.

Manda also asked government to increase funding to the Geological Survey Department as this will help it to explore and discover mining sites for ASMs.

He said this will minimize expenses for ASMs accrued in searching for places to mine.

Manda also asked the Ministry of Mines to provide information to the ASMs on the importance of having mining licenses as well as how and where can they get relevant licenses.

Mineral exports in Malawi are dominated by semi-precious and precious stones (gemstones), ornamental (dimension) stones, lime products, rock samples, and soil samples.

The 2022/2023 Annual Economic Report produced by the Ministry of Finance and Economic Affairs indicates that gemstones and dimension stones continue to be exported to Asia (India, China, Thailand, Sri Lanka, Hong Kong, etc.), USA, England, Italy, South Africa, and more. A few gemstone exports are also made to Poland, Netherlands, and Switzerland.

Malawi has one of the most diverse ranges of coloured gemstones in the Southern Africa Development Community region. Most gemstones are mined locally by ASMs, whereas some are introduced into the market through international trade, especially from neighbouring countries such as Zambia and Tanzania.

The Report says that in 2022, higher gemstone production was recorded amounting to 329.45 tonnes reflecting an increase of over 2000 percent compared to the production in 2021. Gemstones produced included aquamarine, amethyst, citrine, garnet, rhodolite and ruby.

It, however, says despite high gemstone production, value addition is still very low implying potential revenues are lost as gemstones fetch lower prices in their rough (unprocessed) form.

ASX-listed Lotus Resources says it is finalising preliminary work programmes to allow an optimal restart of production at its Kayelekera Uranium Mine in Karonga in light of the positive market outlook for the yellow cake which has seen uranium prices rising.

The uranium market continues to improve, with the uranium spot price maintaining levels above US$90/lb U3O8e in recent weeks, and recently rising to US$104/lb.  The spot price has increased by over 100% since January 2023 driven by a shortage of supply in the spot market that has resulted in low traded volumes along with strong demand from financial groups, traders and utilities.

Lotus MD Keith Bowes says in the Company’s quarterly report for the quarter ended December 31, 2023 that the current uranium pricing and potential undersupply in the medium term are driving a revised timeline for the Kayelekera restart.

Bowes explains that Lotus plans to engage a debt adviser shortly to test the market for debt for Kayelekera.

He says: “The Kayelekera work streams have been prioritised to enable that a Final Investment Decision can be made as quickly as possible.”

“Lotus remains focused on restarting the Kayelekera Project as soon as practicable to benefit from the current strong and increasing uranium prices.  As such, Lotus is testing the market for debt and is focused on undertaking the necessary planned activities to prepare Kayelekera for a potential restart of production in late 2025 when the supply gap for the nuclear utilities is forecast.” 

Lotus is looking to meet the growing supply gap in the nuclear utilities’ reported fuel coverage profile which is supported by the increase in enquiries that the Company has received over recent months from the utilities.

This target start date will depend on a number of conditions being met and the successful conclusion of the described programmes including finalising financing and offtake for the project, which will involve appointing a debt advisor to assist in the financing process.

Lotus will also need to sign potential offtake agreements with suitable parties that can strengthen its position and complete negotiations and signing of a Power Supply and Power Implementation Agreement (PSA & PIA) with the Electricity Supply Corporation of Malawi (Escom), which is key to achieving reduced operating costs announced in the Company’s Restart Definitive Feasibility Study (DFS) in August 2021.

Bowes says the Company has planned a Front-end Engineering and Design (FEED) program leading directly into the detailed engineering design phase for the execution of the restart plan.

He explains that these studies will confirm the upfront capital cost estimate for the plant refurbishment and new equipment installations such that a control budget can be prepared for the restart.   

The studies will also validate the 15-month timeline initially determined for the refurbishment programme for the plant, update the operating costs from the Definitive Feasibility Study including incorporating new quotes from suppliers, and determine long lead items and early works programs.

Bowes says: “With regards to offtake, Lotus has received an increased volume of enquiries from North American utilities, with the understanding that a significant, if not all, of the planned production from the major current producers has already been sold and that the utilities now need to approach the next tier of suppliers, such as Lotus, to meet their future demands.”

“The Company plans to complete these activities within the next six months.”

Kayelekera Mine Development Agreement

During the quarter under review, Bowes says Lotus continued negotiations with the Malawi Government on the Mine Development Agreement (MDA) for Kayelekera, which will set the fiscal regime in which the Project will operate and is one of the inputs the Company is seeking prior to making its Final Investment Decision for the restart of Kayelekera.  

He reports that during the quarter, he travelled to Malawi to meet with the Ministers of Mining and Finance, and Attorney-General to progress the MDA, and attended a meeting of the Parliamentary Sub-Committee for Natural Resources and Climate Change.

Bowes says a meeting was also held with international industry heads and representatives of the US State Department, UK, EU and Australian High Commissioner and representatives from the World Bank.

“Good progress was made on several key discussion points, with a small number of elements still requiring further clarification and discussion.  The Malawi Government representatives continue to express eagerness to finalise the MDA as soon as possible, recognising the importance of mining to the future growth of the Malawian economy and the servicing of the International Monetary Fund credit facility,” he says.