Minister of Natural Resources, Energy and Mining, AggreyMasi, says it is high time investors flocked into the country’s minerals sector as the government has successfully implemented projects that have improved the investment climate in the sector.
In his speech delivered at this year’s International Mining Indaba in Cape Town, South Africa, Masi enticed the investors with detailed and up to date geological, geophysical and geochemical data, which the government has collected through different surveys including the recent Airborne Geophysical Survey executed as part of the World Bank and European Union funded Mining Governance and Growth Support Project.
The Minister also cited the country’s good prospective geology, political stability, an enabling mining legislative framework, competitive fiscal regime and full support that the sector receives from the government as some of the positive attributes for investment.
He described Malawi as a green field endowed with several known mineral resources including uranium, niobium, heavy mineral sands, coal, graphite, rare earths, gold and other industrial minerals such as dimension stones, limestone, vermiculite and bauxite.
Masi said some of these known minerals like gold are being worked by artisanal and small-scale miners in seven localities but require further work by investors to trace the source rocks.
“Malawi, the warm heart of Africa, is a safe, sensible and profitable free market economy. As a country we see mining as a key emerging sector and Government fully supports its development,” he said.
Masi pointed out that the country revised the mining fiscal regime to make the sector more competitive and the new reformed aspects include royalty rate which is at 5%, corporate tax at 30%, resource rent tax at 15%, and 10 years inbuilt tax stability from commissioning of the mine.
Value Added Tax (VAT) is claimable for the mining and exploration companies.
The Minister said the country drafted a Malawi Country Mining Vision (MCMV), a domestic version of the African Mining Vision (AMV) being championed by the African Union (AU).
He explained that the MCMV was drafted to foster a transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development.
Masi also said the Government approved the National Artisanal and Small-scale Mining (ASM) Policy which aims at adequately administering, regulating and facilitating the sustainable growth of ASM in the country.
The Government recently launched the Malawi Growth and Development Strategy III (MDGS III) which identified mining as a sector that can lead to sustainable economic growth.
He said the recognition of by MDGS III has brought in two developments namely: acquisition of up to date geoscience data and; policy and legislative reforms.
Malawi acquired new high resolution airborne geophysical data covering the whole country and is conducting geological re-mapping and mineral assessment of the whole country at 1: 100,000 scale with the project expected to end 2020.
The government has also established an Electronic Geodata Management and Information System (GDMIS) to improve accessibility of geodata.
Masi said in ensuring efficiency management and administration of tenements, the country installed a web-based mining cadastre system at the Mines Department for easy electronic accessing.
On policy and legislative reforms, the Government launched its first-ever Mines and Minerals Policy in 2013 which highlights the importance of mining in the future growth of the economy and also outlines the importance of the private sector in developing the mining industry.
“Recently, Malawi has a new Mines and Minerals Act, approved by the Parliament on 14th December 2018 and it is aligned with best practices to ensure that the state, investors and communities benefit from the mining,” he said.
Masi highlighted major aspects in the new law including provision for a total duration of 7-years for an Exploration License and introduction of a Retention License which is granted for a period of not more than 5-years.
The Minister meet a number of high-level representatives from private mining companies including MkangoResources, which is conducting a definitive feasibility study for rare earth mining at Songwe Hill in Phalombe.
He also met company executives from Sovereign metals which is exploring for graphite at Malingunde in Lilongwe, Paladin Resources which are owners of the Kayelekera Uranium Mine in Karonga and Globe metals and Mining which is prospecting for niobium at Kanyika.
The Minister commended the companies for demonstrating good corporate citizenship through a number of Corporate Social Responsibility (CSR) programs in their respective project areas.
“My Ministry has benefited in terms of capacity building through the attachments offered to the Geological Survey and Departments of Mines staff. The companies have helped in creation of employment at all levels, contributing revenue to the Government, provision of good sanitation and health services, and business opportunities to both small-scale and large-scale enterprises,” he said.
Masi, however, admitted that the sector faces some challenges, the major one being limited energy supply, and said the government is addressing the problem through interconnecting its power grid with that of bordering countries and developing new electricity generation projects.
He said the government is addressing the other challenge of limited transport capacity by improving both road and railway networks.