Mining & Trade News

By Marcel Chimwala

ASX-listed Sovereign Metals has announced that the excavation of a test pit, using dry mining methods, has been completed successfully. The excavation is part of the ongoing Pilot Mining and Land Rehabilitation Program at the Company’s Kasiya Rutile-Graphite Project in Lilongwe, Malawi.

Sovereign Metals MD Frank Eagar explains that the completion of this phase of the Pilot Program confirms that Kasiya can be efficiently mined using standard mobile excavators and trucks, further demonstrating operational alternatives as part of the ongoing Pre-Feasibility Optimisation Study.

The test pit has been excavated as planned with all work on schedule to a depth of 20 metres, handling approximately 170,000 bench cubic metres. Steady-state operations envisage 24 million tonnes of material being mined annually. The excavatedmaterial is being stockpiled on site and as part of the next phase of testwork will be separated into various size fractions through the use of cyclones. Once separated into different size fractions, the material will be backfilled into the test pit for materials deposition testwork.

For the test pit, the excavation was completed with a dry mining fleet consisting of four excavators, 20 trucks and a support fleet including two bulldozers and a motor grader.

Eagar says: “Completion of the test pit at this scale marks a significant achievement. The mining, hydrology and geotechnical data collected throughout is invaluable in our understanding of the orebody and the simplicity of a potential dry-mining operation at Kasiya. We now look forward to the next steps of the pilot phase including the hydraulic mining trial, cyclone separation of ore, backfilling of test pits and soil rehabilitation.”

Eagar explains that the saprolite-hosted mineralisation at Kasiya is largely homogenous and has relatively consistent physical properties throughout the 1.8 billion tonnes Mineral Resource Estimate.

“Data collected from the pilot phase confirmed that no drilling, blasting, crushing, grinding or milling will be required prior to stockpiling material for processing into rutile and graphite products; an indication of potentially lower mining costs and a lower carbon footprint comparable to hard rock deposits,” he says.

Eagar reports that hydraulic mining trials will begin in coming weeks. A temporary water storage pond has been constructed and sealed using natural clay from excavated material, minimising the use of conventional plastic lining. The pond is being filled by eight boreholes delivering water to site and is nearing its capacity of six million litres. Water from the storage pond will initially be used for the hydraulic mining stage.

He says the main pit will be backfilled with dry material, while material from hydraulic mining will be used to fill rehabilitation pits as part of the rehabilitation phase of the trial.

Background to the Pilot Phase

The Pilot Phase is a critical part of Kasiya’s optimisation study and ongoing feasibility work; empirical data generated from the Pilot Phase will determine optimal project excavation, material handling, processing, backfilling and rehabilitation approaches. The Pilot Phase is being undertaken on a 9.9-hectare site and includes the following activities:

1. Test Pit: A test pit of 120m by 110m excavated to a depth of 20m, allowing optimisation of hydraulic and dry mining excavation methods.

2. Stockpiles: The excavated material will be temporarily stored in 4 stockpiles, namely all dry mining material, wet slimes (in a pond) and two sizes of sand fractions from the hydraulic mining.

3. Backfilling and Grading: The material will be placed back into the pit, and all areas will be graded.

4. Rehabilitation Demonstration: Sovereign will construct eight small rehabilitation demonstration pits covering a combined area of 100m by 130m. These will be used for water storage, excavated material storage, and demonstration of multiple land rehabilitation approaches.

5. Temporary Laydown Areas: Four areas will be used as temporary laydown areas, offices, and associated infrastructure.

6. Communication: The Pilot Phase will be an educational opportunity for Project stakeholders. Sovereign will undertake a series of stakeholder visits and consultations for this purpose.

Eagar explains: “Sovereign’s objective is to restore land after mining to conditions that achieve the same or better agricultural yields than existing land uses and crop yields. The Pilot Phase will demonstrate to local communities the successful rehabilitation of land for agricultural use post-mining; land rehabilitation will form an integral component of the ongoing optimisation study.”

“Results of this Pilot Program will also allow Sovereign to determine optimal excavation and backfill approaches, providing critical information for the upcoming Definitive Feasibility Study.”

By Marcel Chimwala

ASX-listed Lotus Resources has announced that it has signed a Mine Development Agreement (MDA) with the Government of Malawi (GoM), for its Kayelekera uranium mine, a major milestone in its redevelopment.

Lotus CEO Keith Bowes says the Agreement ensures that the mine will operate under a stable fiscal regime and provides the necessary confidence to investors.

Bowes explains that the MDA guarantees a Stability Period of 10 years during which the Project will not be subject to any detrimental changes to the fiscal regime.

He says the MDA’s key tax terms are aligned with the Kayelekera Restart Definitive Feasibility Study (DFS) assumptions, including royalty rate of 5% and corporate tax rate of 30%.

“There is also relief provided on Resource Rental Tax and Withholding Tax, specifically as it applies to dividends to non-residents,” he says.

The MDA also provides exemptions for import and export duties, plus excise and Value Added Tax (VAT) on capital goods and specified consumables directly related to mine production.

Bowes adds that the MDA includes internationally recognised principles relating to legal protection on security of tenure, dispute resolution and expropriation.

“MDA demonstrates the commitment by the GoM to develop the local mining industry, a key pillar of Malawi 2063, their new economic vision,” he says.

Bowes also points out that Rio Tinto’s increased shareholding in Sovereign Metals, which holds another key mining project in Malawi, indicates the increased attractiveness of Malawi as a mining destination.

He says: “We are extremely pleased to have finalised our MDA with the Malawian Government. I would like to thank all parties involved in these negotiations, especially the Presidential Delivery Unit who were instrumental in finalising the agreement. The relevant ministries including mining, finance and justice have all been very supportive in our negotiations as we have gone through multiple iterations of the MDA.”

“It has been a timely conclusion to these negotiations as we have seen increased demand for the Kayelekera product from a number of utilities which coincides with the current perceived shortages and strong prices in the market. With the completion of the MDA, we can now move ahead quickly with concluding some of our offtake discussions.”

MDA key terms

The MDA specifies key fiscal terms, legal protections and non-fiscal government support under which Lotus will develop and operate Kayelekera. Lotus has benchmarked comparable fiscal regimes elsewhere in informing its MDA discussions with the GoM.

The MDA is aligned with current Malawi legislation. Key terms agreed include:

• A stability period of 10 years from date of execution during which the Project will not be subject to any detrimental changes to the fiscal regime

• Royalty rate of 5% and the corporate tax rate of 30%

• Tax losses from acquisition are included, with protection from disputes on tax refunds through the principle of tax set-off. The agreement also includes ability to restructure historical loans and tax losses on a tax neutral basis

• Malawi’s currently legislated Resources Rent Tax (RRT), which is not fit for purpose, does not apply. Instead, the GoM proposes to consider an alternate supernormal profits tax (that may consist of a sliding scale linked to uranium price) to replace the current RRT. The Company will receive a waiver until such time as this is effective.

• Exemptions for import and export duties, excise and VAT on capital goods and on specified consumable items directly related to mine production

• Withholding Tax relief (currently 10% for a mining company) on dividends to Lotus for the majority of the mine life

• The maintenance of foreign currency bank accounts inside and outside Malawi that are supportive of project financier requirements

• A Community Development Agreement with a minimum value of 0.45% of project revenue set aside for community projects

• Specific legal protection is afforded to the Company, including Security of tenure, Dispute Resolution and Arbitration and non-discrimination

Engagement with Government of Malawi

Lotus’s negotiations with the GoM were based on the concept of a fair and equitable split of economic benefits for investors that meets the project financing needs, delivers an economically viable project and provides the necessary benefits to the local communities, the Malawian people and the GoM.

Consideration has been given to not only fiscal items such as taxes and royalties but also economic benefits including jobs, business development, local procurement and supporting local businesses and communities.

Next steps

Bowes states that the company’s current priorities include to complete offtake negotiations for the first phase of contracting with offtake agreements likely to have a pre-payment component to support project financing, complete the front-end engineering design program and finalise project financing.

He explains that Lotus’s debt advisor, Orimco, has identified potential financiers to assist in the project financing while Independent Technical, Environmental and Legal reviews are planned prior to receiving credit approved proposals.

Lotus is also expected to complete negotiations and sign a Power Supply and Power Implementation Agreement with Malawi’s electricity utility Electricity Supply Corporation of Malawi (ESCOM).

By Marcel Chimwala

Lancaster Exploration, a 100% owned subsidiary of TSX.V and AIM listed Mkango Resources, has signed a Mining Development Agreement (MDA) for the Songwe Hill Rare Earths Project in Phalombe with the Malawi Government.

The signing ceremony was held at the Office of the President and Cabinet in Lilongwe, Malawi during the evening of Friday July 26th, 2024.

Hon. Minister Monica Chang’anamuno MP, Minister of Mining for Malawi stated

“The signing of the MDA marks a momentous and significant occasion in the history of Malawi's mining sector. It is with great pride and optimism that we sign the MDA between the Government of Malawi and Lancaster Exploration Limited (Mkango) paving the way to start mining Rare Earths at Songwe Hill in Phalombe.  The MDA signed by the Government of Malawi is a product of almost two years of hard work. I would like to thank the team at Mkango for their positive partnership spirit during the negotiation period. This Agreement is not just a contractual obligation; it symbolizes a renewed partnership, a commitment to sustainable development, and a shared vision for a prosperous future for both parties. The journey to this has been marked by diligent negotiations, mutual respect, and a deep understanding of the potential that lies beneath our feet. The conclusion and signing of this MDA is a testament to what can be achieved when we work together with a common purpose. It will ensure that the benefits of our mineral wealth are shared equitably and that our environmental and social responsibilities are upheld. The MDA we have signed today is a win-win agreement and is based on the belief that Government, the mining investor and Malawians share some fundamental interests of benefitting from these future mining activities. On behalf of the Malawi Government I would like to take this opportunity to assure the investors that the Government will adhere to its obligations reflected in this MDA.  I would like to reiterate Government’s commitment in ensuring that it provides requisite infrastructure to support the mining activities at Songwe Hill and the country in general. The future mining operations at Songwe Hill in Phalombe will have far-reaching impacts on our economy. As we are all aware mining represents the hopes and dreams of the Malawian people for economic growth, wealth and job creation in line with Vision 2063 and the Agriculture, Tourism and Mining (ATM) Strategy championed by His Excellency the President Dr Lazarus McCarthy Chakwera.  To the management team at Lancaster Exploration Limited (Mkango) I would like to thank you for your unwavering commitment to Malawi. Together, we are not just signing an agreement; we are embarking on a journey towards a brighter, more prosperous future for Malawi. Let this be a shining example of what can be achieved through partnership, perseverance, and a shared vision for a better tomorrow.”

Alexander Lemon, President of Mkango stated: “We are very pleased to announce this major milestone for the Company and the nation of Malawi. I am delighted that the MDA has been agreed and signed with the Government of Malawi. The Project when developed, is expected to be a game changer and transformational for  Malawi and Mkango welcomes the very strong support it is receiving from the Government of Malawi and all stakeholders. When developed, my hope is that Songwe Hill will catalyse a new industrial revolution in Malawi, creating employment opportunities ,producing high value-added exports, as well as further unlocking Malawi’s mineral potential and new infrastructure developments.”

Songwe is one of the very few rare earths projects globally to have completed a definitive feasibility study and hold a signed and approved Environmental, Social, Health Impact Assessment (“ESHIA”), which was completed in compliance with IFC Performance Standards and The Global Industry Standard for Tailings Management (2020) (“GISTM”) adopted for design and management of the tailings storage facility. The key rare earths being targeted at Songwe are neodymium, praseodymium, dysprosium and terbium which are all critical for the green transition and are essential to permanent magnets for electric vehicles, wind turbines and many electronic devices.

Key components of the MDA include:

➢ 5% royalty of gross revenue

➢ 30% corporate tax rate

➢ 10% non-diluting equity Interest in the Project to Malawi Government

➢ Exemption from customs and excise duties – Lancaster will be exempted from Export Duty, Import Duty,

Import Excise and Import VAT on imports and exports of capital goods as provided in the applicable law

➢ 10 years stability period

➢ 10 years Tax loss carry forward

➢ Community Development Expenditure is an allowable tax deduction

The key rare earths being targeted at Songwe are neodymium, praseodymium, dysprosium and terbium which are all critical for the green transition and are essential to permanent magnets for electric vehicles, wind turbines and many electronic devices. Rare earth elements are critical enablers of clean energy and electro-mobility. They are used in a wide range of applications that have transformed modern society, and due to their unique physical and chemical properties, are exceptionally challenging to duplicate or replace.

UK and Canadian listed Mkango has been conducting detailed geological exploration and feasibility study work since 2010 at Songwe Hill in Phalombe and invested over US$35million to date

 The Company works closely with the local communities and prioritizes employing both skilled and non-skilled workers from the community, and carries out a number of corporate social responsibility projects in different areas including education, health, agriculture and infrastructure development.

By Tawonga Nyirenda Mayuni

Malawi coal miners are struggling to meet the local demand from the consuming industries despite the country hosting millions of tonnes of the resource. 

The development has seen major coal consuming industries such as cement manufacturing struggling to import coal from Mozambique amid the current foreign exchange shortages.

Chairman for Cement Products Aslam Gaffar said his plant has run out of coal and the mines in Malawi, located in the Northern Region are failing to supply.

“We may have to stop our cement plant indefinitely as we try to get coal,” said Gaffar, whose company has a clinker plant and cement mill in Njereza, Mangochi with a limestone mine in nearby Maera Village.

Shayona Cement Company, which runs a clinker plant and grinding mill in Kasungu, is also reportedly struggling to import coal from Mozambique for its operations with the local market in deficit.

Speaking to Mining and Trade Review. Acting Mine Manager for Mchenga Coal Mine in Rumphi Assan Tembo said that they are having problems with their production as the company is falling short on equipment that accelerates production.

Tembo said: “We need to use the conveyer belt and other equipment to increase production, but at the moment we are using wheelbarrows which is slowing down production, so expect to bring in the equipment and production will double by the end of July.”  

Tembo said that the company is aiming at increasing production by not only mobilizing additional equipment but also opening other ore sites.

Commenting on the issue in a separate interview, MD for Chombe Coal Mine Bruno Klose said despite the market deficit, his company is producing at normal volumes.

Klose said that it is not strange for companies in Malawi to import coal from Mozambique as they have always done that despite Malawi having a lot of coal.                                                                                       

By Marcel Chimwala

Mining & Trade Review has clocked 15 years in news publishing. Despite the newspaper playing a major role in creating awareness on mining issues, our analysis indicates that Malawi’s minerals sector is dogged by a host of challenges that are obstructing growth of the potential sector whose contribution to gross domestic product (GDP) remains rooted at a staggering one percent.

The challenges that Mining & Trade Review has reported over the years range from delays by the Government to sign Mine Development Agreements (MDAs) with foreign mining investors; slow pace is issuing mineral licenses; political interference; lack of necessary infrastructure for development of mining projects; lack of access to financing for medium scale and artisanal and small scale miners (ASMs); slow pace in formalising ASMs and market hiccups for local producers including cement manufacturers.

Delays in signing MDAs

In 2009 when the first issue of the then Mining Review which later rebranded to Mining & Trade Review was published, Malawi saw Kayelekera Uranium Mine in Karonga coming into production as the first ever large scale mine in the country. ASX-listed Paladin Energy through its local subsidiary Paladin Africa operated the mine with the Malawi Government as a minority shareholder with 15% shareholding. Unlucky for Malawi, the mine was put on care and maintenance in 2014 to preserve its longevity due to sustained low uranium prices in the wake of the Fukushima Nuclear Disaster in Japan which resulted in the closure of some nuclear plants in so doing negatively impacting on the market demand for the yellow cake.

With production halted at Kayelekera, Malawi is left without a large scale mine in operation despite hosting proven mineral deposits that can support large scale mining operations. Over the last 15 years, the Government has only concluded MDA negotiations for the Kanyika Niobium Mining Project in Mzimba.

The Malawi Government is for some years now continuing negotiations for MDAs with ASX-listed Lotus Resources to resume mining at Kayelekera and Mkango Resources to start rare earth production at Songwe Hill in Phalombe.

Analysts say these delays in finalising MDAs are a major stumbling block to the growth of the minerals sector in Malawi.

But Government says it is not concluding the MDAs with the two companies because they are seeking tax incentives unlike Globe Metals.

Minister of Mining Monica Chang’anamuno said: “The process has taken a bit longer as the Government is ensuring that the agreements favour and benefit Malawians and that they are not raw deals like some agreements before.

 “For your information Government does not want to rush into signing an agreement that would hurt Malawians and the economy of the country.”

“However, as government we are determined to conclude the negotiations as soon as we reach a win-win situation.”

But Coordinator for Chamber of Mines and Energy Grain Malunga backed the companies in seeking tax incentives.

Writing in his Technical File column in Mining & Trade Review, Malunga said:  “It should be emphasized that investment incentives that are granted in projects with marginal profits can go a long way in building history of mining through attracting more mining investment.”

“It is not enough to talk about investment subsidy or governments losing potential revenue through tax incentives without understanding mining project risks.”

“In order to believe that government negotiates in good faith for the benefit of its citizens, there is need to be transparent in all contract dealings.”

Delays in issuing mineral licenses

Players in the sector have also complained about delays by the government in issuing various mineral licenses and permits.

Speaking on behalf of private resource firms during this year’s Malawi Investment Forum in Lilongwe, Chairman of leading mining and mineral consulting group Akatswiri Holdings Hilton Banda urged State President Lazarus Chakwera to ensure that bureaucratic procedures for acquiring licenses and signing agreements are simplified in order to do away with delays of mining projects.

“This is a young sector, and its challenges are enormous, and therefore, we will continue to count on Government’s support to realise the full potential of this most promising sector,” said Banda, hinting that with the current projects’ projection, mining will be contributing 10% to GDP by 2030 if challenges in the sector are addressed.

Political interference

Over the years, Mining & Trade Review has also unearthed acts of political interference in the sector. Chief among the issues is the recent review of the Mines and Minerals Act 2019 to replace it with the 2023 Act.

Our investigations revealed that politicians bulldozed the Bill to formulate this new Act without consulting key stakeholders including the Chamber of Mines and Energy in Malawi (CMEM), Civil Society Organizations (CSOs) and Artisanal and Small Scale Mining (ASM) groups.

Malunga confirmed in an interview that the Ministry of Mining did not engage the Chamber even any member of the group in formulating the Act.

Malunga said: “We were not engaged. My views are well known. Malawi is a country with a Mining Regulatory Authority with no clear mandates for Geological Survey Department and Department of Mines.”

In a separate interview, ASM subsector consultant Chikomeni Manda concurred with Malunga of not being engaged describing the development as undemocratic.

Manda said Malawi is a democratic country which should have been giving all stakeholders and players in the industry an equal opportunity to participate in formalization of any document.

He said: “Lack of consultations deprived the citizens of a chance to contribute important issues which were left out in the Act.”

“It was selfish on the part of Government to sideline the key stakeholders in the industry. What Government did should have never happened in a democratic country like Malawi.” 

Natural Resources Justice Network (NRJN) Programs Coordinator Joy Chabwera said missing of the CSOs during consultations means the Government is not serious with the sector as the organizations ensure that the law benefits all players in the sector.

He said: “CSOs were not consulted at all. It is also unfortunate to learn that mining companies were also not even engaged and these companies are complaining maybe they see some areas in the Act that are not in their favour.”

Among other things, the new Act has introduced the Mines and Minerals Regulatory Authority whose governance roles appear similar to those of the Departments of Mines and Geological Survey.

It has also given powers to the Minister of Mining to decide on whether Government should acquire minority shareholding in a large scale mine and the amount of stakes while the old Act spelt clearly that Government can acquire up to 10%.

Mining Sector Consultant Peter Chilumanga commented that the Malawi Government needs to learn from other countries in the region when formulating laws in order to excel in the extractive sector.

Chilumanga said: “Obviously most of the countries have clear cut and transparent laws and policies with regard to fiscal issues.”

“The investment fiscal regimes guidelines are specific and not based on a determination of one person.”

“What is wrong in putting it as was in the old Act and in synchrony with Africa Mining Vision and Southern Africa Development Community (SADC) regimes?”

Shortage of infrastructure

Another issue we have reported as choking the development of mining projects is the shortage or poor condition of public infrastructure in mining areas.

For example, though it has a valid mining licence, Chinese firm MAWEI Mining is failing to start minng heavy mineral sands in Mangochi-Makanjira due to the site’s lack of access to electricity and lack of proper transportation models to ferry the minerals to the seaports to get them to the world market.

The company requires approximately 3MW to kick-start the project and 10MW for the rest of the mine life, and there is also a need to operationalize lake transport services from Makanjira to Chipoka to connect to the railway to Nacala for exporting.

Former PRO for Ministry of Mining Christopher Banda reportedly said in an interview: “MAWEI Mining obtained the mining license in 2017 and when we inquired why they remained dormant they cited rains, insufficient power and transportation constraints as key setbacks.”

“Heavy mineral sands have highest potential to boost revenue generated from local extractive sector as these type of minerals are in a class of ore deposits which are an important source of zirconium, titanium, thorium, tungsten, and rare-earth elements, which are also fairing good on the market.”

Besides Makanjira Heavy Mineral Sands Project, there are a number of mining projects that require electricity from the national grid including Songwe Hill Rare Earths in Phalombe, Kayelekera Uranium in Karonga and Kanyika Niobium in Mzimba.

Speaking at the National Mining Investment Forum in Lilongwe, Director of Energy Services in the Ministry of Energy Joseph Kalowekamo said that all existing and planned mining projects that were assessed by the Ministry of Mining were visited by Ministry of Energy to appreciate their energy requirements.

He said the projects were then included in the power demand forecast that Ministry of Energy has produced covering the period from 2022 to 2042.

“Currently, our installed generation capacity stands at 555MW, of which 402MW is from hydro and 101MW is from solar and then there is 52MW from diesel power generation. The mining sector demand stands at 246 MW,” said Kalowekamo.

Commenting on the issue in the panel discussion at the Forum, Malunga stressed on the pressing need for additional resources highlighting that the country does not have enough energy to drive the mining sector.

“We need more hydropower generation to be fed to the national electricity grid,” said Malunga

The Ministry of Energy is projecting planned investments of approximately US$3.5 billion to meet the estimated energy demand by 2040. These investments include the development of hydro, solar, wind, and gas power plants.

Besides energy hiccups, lack of transport infrastructure is another challenge as many mining sites are located in remote areas which are not covered by the national transport network.

Speaking at the Mining Investment Forum, Minister of Transport and Public Works Jacob Hara spelt out the need for collaboration between mining companies, the Ministry of Mining and the Ministry of Transport to come up with plans that can benefit the two sectors.

Hara said: “We need to address the mentality that the government owe us good roads. Everyone should be responsible for providing the good roads through the road tolls and we can have special arrangements with the mining companies focusing on maintaining the roads that they use frequently.”

“Malawi’s decision to join the Central Corridor Transport Facilitation Agency shows government's determination to address challenges in the mining sector and elevate transportation infrastructure to new heights.”

“With ambitious plans to revitalize rail networks and enhance road connectivity, Malawi is heading to the new era of economic growth and development for the betterment of its citizens and the broader international community.”

Local cement market hiccups

With the Electricity Supply Corporation of Malawi (Escom) struggling to meet energy demand, heavy industries such as cement manufacturers opt for coal to power their machines. However, this alternative is also proving unsustainable for the cement producers as they are failing to import coal from Mozambique due to foreign exchange shortages.

Local coal miners are also failing to meet the demand of the industry as they are struggling to acquire loans to expand their operations with coal blacklisted by a number of financial institutions as environmentally destructive.

“We may have to stop our cement plant indefinitely as we try to get coal,” said Chairman for Cement Products Limited Aslam Gaffar, whose company has a clinker plant and cement mill in Njereza, Mangochi with a limestone mine in nearby Maera Village.

Shayona Cement Corporation, which has its factory and limestone mining operation in Kasungu, is also struggling to import coal and other raw materials due to foreign exchange shortages.

These challenges dogging the cement producers have led to a decrease in cement production hence the government resorts to issuing import licenses for cement to traders to address the shortfall.

But Mining & Trade Review investigations have revealed that importation of cement has not entirely helped in normalising the situation on the market as traders are selling the foreign brands at the same price with local brands of similar strength yet in a normal situation the foreign brands would have fetched higher prices taking into account transport cost and surcharge. Such a situation has resulted in a general rise in the prices of cement.

Slow pace on formalisation of ASM activities

Artisanal and Small-scale mining (ASM) in Malawi remains informal but Government is taking steps to formalise the activity by facilitating formation of ASM cooperatives, which can be easily reached with training programmes and loans to boost businesses.

Director of Mines in the Ministry of Mining Samuel Sakhuta told Mining & Trade Review in an interview that the Ministry has facilitated the formation of over 18 cooperatives in different parts of the country.

"We are trying our best so that we control this practice of illegal mining and make sure that the best methods and recommended tools are used,” he said

He said the Ministry is continuing its routine programme of training, teaching, advising, monitoring and inspecting the small scale miners on proper mining methods to minimize accidents that have also resulted in deaths in ASM hotspots. 

"It is through these cooperatives that the Ministry is planning structured training. Our officers will continue training small scale miners on proper mining methods as they need to use recommended and appropriate equipment to minimize accidents associated with illegal mining,” he said.

But the ASMs interviewed by Mining & Trade Review said they are not satisfied with the pace of the formalisation process which they described as slow.

MD for Maleta Gems and Jewels Percy Maleta urged the Ministry of Mining to expedite the process, and establish a loan fund for ASMs.

Maleta said that it is painful to the ASMs to see that the mining sector is not being financially supported by government yet other economic sectors are heavily supported technically and financially citing agriculture which is enjoying substantial support through projects like the Agricultural Commercialization (AGCOM) and the National Economic Empowerment Fund (NEEF).

“It pains to read, hear and see that our counterparts in small-scale agriculture are heavily supported technically and financially, talk of extension workers/officers, AGCOM with its billions of kwachas to support the cooperatives and recently NEEF, nothing is being done to small scale miners other than hearing from the government that mining is the main thing and touted to replace agriculture in the coming years. How do we achieve this without investing in the mining sector?” he questioned.

For Mining & Trade Review, it has been a fruitful 15 years of putting to light pertinent issues to help the sector grow. The journey continues!

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By Wahard Betha

The Ministry of Mining has urged Malawians living in diaspora to invest in Malawi’s mineral sector which offers abundant investment opportunities.

Speaking during a virtual meeting which the Ministry organized to engage Malawians living abroad, Minister of Mining Monica Chang’anamuno said the Ministry has developed and continues to develop incentives favorable for investors.

Chang’anamuno encouraged Malawians in diaspora consider forming partnerships in large-scale mining investments besides exploring various opportunities available in Malawi’s mining industry.

She said: “I want to assure you that the Malawi government is committed to creating a conducive environment for investment, with transparent regulations, efficient permitting processes, and support for responsible mining practices.”

“We are actively working to streamline procedures, enhance infrastructure and strengthen governance to facilitate and safeguard investments in our mining sector.”

“This forum, therefore, serves as a platform for dialogue, knowledge sharing, and networking, where we can exchange ideas, forge partnerships, and chart a course towards maximizing the potential of Malawi's mining sector.”

“I would like, therefore, to encourage you to explore the opportunities available in Malawi's mining industry, whether in minerals such as uranium, rare earth elements, or gemstones.”

Chang’anamuno said the government is open to partner with any potential investors interested to invest in any of the country’s minerals.

She said: “We are eager to partner with investors who share our vision of sustainable development and are willing to engage local communities to ensure mutual benefits and long-term success.”

“Together, we can harness the potential of Malawi's mining sector to drive economic growth, create employment opportunities, and contribute to the prosperity of our nation.”

“I look forward to engaging with you further and building fruitful partnerships that will benefit both investors and the people of Malawi.”

The virtual diaspora meeting was held under the theme of ‘Investing in Malawi’s Minerals’ as one way of spearheading the MW2063 Vision which is a blue print for national development and wealth creation.

Chang’anamuno said the virtual meeting is one way of implementing the Agriculture, Tourism and Mining (ATM) Strategy expounded by the State President Dr Lazarus Chakwera.

She said: “We are resolute and committed to unpack this through various interventions until we realize the dream of transforming Malawi.”

“Our country boasts of a wealth of mineral resources, and we recognize the importance of attracting foreign investment to drive sustainable growth and development.”

“Investing in the mining sector in Malawi offers not only the potential for financial returns but also the opportunity to contribute to our nation's economic diversification and job creation.”

The virtual meeting was also graced by Principal Secretary in the Ministry Joseph Mkandawire; Director of Geological Survey Department Stanley Nyama; Chief Inspector of Environment Mphatso Chikoti and Mining Surveyor Hillary Bandawe.

The meeting also included different presentations from the Ministry explaining on issues involving the Mines and Minerals Act as well as investment opportunities in the extractives sector.

Standard Bank Plc (Malawi) Head of Business and Commercial Banking Graham Chipande unpacked issues of financial interventions that the Bank is implementing to support the sector.

Chipande said: “Malawi's mining sector holds immense potential for driving economic prosperity, job creation, and infrastructure development.”

“The private sector plays a crucial role in the development of Malawi's mining industry, contributing significantly to the country's economic growth and development.”

The virtual diaspora meeting follows a successful inaugural 2024 Mining Investment Forum that was held in Lilongwe.

By Wahard Betha

The Ministry of Mining says the long-awaited Mining and Minerals Regulatory Authority has now started functioning but what has remained is the appointment of the Board of Directors to make it fully operational.

Minister of Mining Monica Chang’anamuno told Mining & Trade Review in an interview that by the end of this month, the Ministry will finalize listing names of Board Members and submit to the Office of President and Cabinet (OPC) for approval.

The Authority has started operating under the new Mines and Minerals Act of 2023 which has been operationalized as published in the Government Gazette on June 28, 2024.

Chang’anamuno said: “Therefore, what we are waiting for is the appointment of the Board and then the Board is going to recruit the Director General.”

“Let me also say that now all the issues to do with regulations are going to be expedited.”

The Authority will be responsible for: receiving and processing license applications for mining companies; granting, revoking and amending licenses under the Act; approving taxes and; monitoring, inspecting and enforcing compliance by licensees with licensing conditions granted under the new act.   

Apart from the Authority, the Minister also disclosed that the Ministry is finalizing establishment of the state-owned mining company.

Chang’anamuno said what has remained for the company to start working is the recruitment of the members of staff.

She explained that all these initiatives are being implemented to ensure that the mining environment is conducive to both local and foreign investors.

Chang’anamuno said: “On the mining company, we are working hand in hand with OPC as well as Department of Human Resources Management and Development (DHRMD) so that we should have the staff.”

“All the paper work and everything else has been done, and we are glad that the budget for this year has given us resources for the operationalization of the mining company.”

The state-owned mining company will play a major role in exploiting the country’s natural resources and managing the extractive sector.

The Company will also have the opportunity to generate revenue for the state, enable government to exercise greater control over the sector, help improve local technologies and skills and manage exposure of energy transition risks.

Besides pursuing its own investments in strategic minerals, the state-owned mining company is expected to partner private mining companies in various mining projects.

By Modester Mwalija

In response to the growing concerns about safety in mining communities, key stakeholders including the Chamber of Mines and Energy, civil society organizations working in extractives and mining companies have adopted the Awareness and Preparedness for Emergencies at Local Level (APELL) for Mining Handbook developed by the United Nations Environment Programme (UNEP) in order to enhance emergency preparedness and uphold safety of mining communities.

APELL programme is a process which helps people prevent, prepare for and respond appropriately to accidents and emergencies. The APPELL Handbook, launched in 1988, sets out a 10-step process for the development of an integrated and functional emergency response plan involving local communities, governments, emergency responders and others.

This coordinated effort aims to address the potential hazards associated with mining operations, ensuring that local communities are well-prepared to handle emergencies.

Coordinator of the Chamber of Mines and Energy, Grain Malunga, underscores the vital role of coordination with local authorities and community leaders.

He says “this collaboration ensures that risks are well understood and mitigation measures are effectively implemented.”

Highlighting the proactive approach in identifying and evaluating hazards related to mining operations, Malunga explains that the Chamber organizes annual visits to mines to appreciate operational procedures and risks.

“These visits enable a first-hand understanding of the mining processes, allowing a comprehensive evaluation of potential risks and the development of appropriate mitigation strategies,” Malunga states.

Coordinator for Natural Resources Justice Network (NRJN) Kennedy Rashid, emphasizes on the environmental, health, and socioeconomic hazards that mining can cause if done irresponsibly.

He says NRJN works diligently to educate communities about these risks and promote responsible mining practices.

Rashid points out the collaborative efforts through platforms like the Open Government Partnership, which address governance issues in the mining sector.

“We work together to ensure adherence to labour, health, and environmental management standards,” he says.

Rashid explains that the CSOs have established action groups in mining hotspots which are equipped with skills in human rights, natural resources governance, and environmental management.

“This grassroot approach ensures that communities have the oversight and advocacy capabilities needed to engage effectively with mining companies and government agencies. These action groups play a vital role in monitoring mining activities, raising awareness about potential risks, and advocating for the rights and safety of community members.,” he says.

Innocent Ndovie, Human Resources Manager at Akatswiri Mineral Resources says the company evaluates the specific risks including land subsidence, chemical spills, dust emissions, and extreme weather conditions through comprehensive assessments and continuous monitoring.

Ndovie describes their emergency response plan as thorough and multifaceted as its mitigation strategies include advanced dust control technologies, proper handling of hazardous materials, and regular equipment maintenance.

“It includes risk identification and assessment, specific response procedures, communication protocols, resource allocation, and regular training and drills. Coordination with local emergency response teams and community leaders is maintained through regular meetings, joint drills, and community forums,” he elaborates.

He said in order to ensure compliance with the APELL process, the company adopts its guidelines and engages all relevant stakeholders in its trainings planning process.

“We conduct comprehensive on-board training, annual refresher courses, and specialized training for our emergency response teams with continuous improvements approach that involves regular reviews and updates based on feedback and evolving best practices,” he explains.

This coordinated approach not only ensures that the mining industry can respond effectively to emergencies but also fosters a safer and more resilient environment for communities around mining operations. By working together and continuously improving their strategies, these stakeholders are paving the way for a more sustainable and secure future in the mining sector.

Perekezi Consultants, a mineral sector consulting firm, has presented before the Parliamentary Committee on Natural Resources and Climate Change (NRCC) its assessment on corruption risks in mining sector mainly on energy transition minerals.

With funding from United States Agency for International Development (USAID) under the Just Energy Transition (JET) Perekezi is conducting a project to promote transparency and accountability in mining sector.

In an interview at the meeting, Perekezi Consultants Managing Partner Chikomeni Manda said the meeting with the parliamentarians was to remind them of their oversight role in ensuring that no corrupt practice occurs in the mining sector.  

Manda said: “We brought the issues about transparency and accountability in the mining sector as part of our project which is looking at the potential of corruption in energy transition minerals.”

“Probably you heard about the world changing from fossil fuels to clean energy so we are implementing this  project to ensure that parliament, media and Civil Society Organizations (CSO) are playing their oversight roles very seriously to ensure that mining activities are happening transparently without any forms of corruption.”

“Under this project, we developed a corruption risk assessment. We are not saying there is a corruption going on but there is a risk, and we want the loopholes closed.”

The assessment identified mining stages of higher corruption risk potential namely: license granting process; operational and compliance; renewal and expansion of applications; application submission and initial renewal and; disposal and cancellation stages.

The report says mitigation measures to prevent corruption occurrences within the sector includes: ensuring Integrity in the Mining Licensing Process to enhance the integrity, transparency, and efficiency of the process.

The assessment also calls for collaborative efforts to address the identified risk vulnerabilities and promote sustainable development in the mining sector.

Perekezi consultants also incorporated Malawi Extractives Industry Transparency Initiative (MWEITI) to present before the committee some of the strategies being implemented by the body in the fight against corruption in the extractives sector.

MWEITI Secretariat official Leonard Mushani presented a number of strategies including: EITI reports; development of Beneficial Ownership Disclosure (BOD); Contract Transparency (CT) study which comes up with contract portal and; establishment of MWEITI Anti-Corruption Strategy.

In his remarks, NRCC Chairperson Werani Chilenga welcomed the development but urged for more involvement of parliament in producing MWEITI reports.

 Chilenga said: “Our take on the fight against corruption in the mining sector is that we are already an oversight body for government as parliament but what we need as a committee is that we should be involved in EITI issues.”

“They are already doing their job by producing reports but those reports have never come to parliament. We want those reports to be vetted by parliament so that by the end of the day members of parliament should have copies to show to their constituencies,”

Malawi became a member of EITI in 2015 and to-date it has produced six reports.