Plans to operationalise state-owned mining company on course

By Tawonga Nyirenda Mayuni and Wahard Betha

The Ministry of Mining says it is making progress in its plans to operationalise the state-owned mining company, the Malawi Mining Investment Company (MMIC).

Public Relations Officer for the Ministry Sangwani Phiri said discussions that will determine how best the Company, which was already registered with the Registrar of Companies, should be established are underway with relevant stakeholders including the Reserve Bank of Malawi (RBM) and its subsidiary Export Development Fund (EDF) which is expected to finance the formation of MMIC.

 “The Company is expected to be operational after everything such as capitalization and administrative arrangements have been achieved,” he said.

Phiri, however, said that Directors of the Company are yet to be appointed as currently the process to form the Company is still at planning stage.

Acting Director for Mines in the Ministry of Mining Burnett Msika commented in a separate interview that the recent change of leadership following last year’s fresh presidential elections which resulted in changes in influential top positions in government, EDF and RBM has contributed to the delays in the formation of the Company.

 “When a new administration comes in, there is a need for it to go through the concept and understand it. For example, we have a new Governor for RBM who needs to go through the concept and champion the formation of the Company,” he said.

He, however, said the Ministry of Mining is working tirelessly in fast tracking the process to operationalise the new Company.

The concept on the formation of the Company accessed by Mining & Trade Review indicates that the Company will help in the formalization of the Artisanal and Small-scale Mining (ASM) subsector as it will be buying gold from the miners.

The Company will also partner tenement holders as a shareholder in order to help push feasible projects to mining stage.

 “We also believe that the Company will come up with laboratories and value addition centres as lack of these facilities remains a major challenge for small scale miners in the country,” said Msika.

He also said MMIC is expected to compliment the work undertaken by Geological Survey Department (GSD) which, due to limited resources, is involved in basic geo-mapping and mineral prospecting and rarely ventures into advanced mineral exploration where delineations of mineral reserves, including determination of mineral deposit sizes and grades, are conducted with a high degree of geological certainty and accessibility.

He said: “MMIC is expected to fill the GSD gaps by conducting advanced mineral exploration activities in order to generate advanced geo-scientific data which will be much more appealing to investors than it is now.”

“MMIC will also fill the gaps that are there in the Department of Mines in handling feasibility studies by conducting the mining feasibility studies in a quest to support the mineral sector growth and development in the country through provision of more credible and investor attractive mining and mineral processing feasibility study data.”

It is also expected that MMIC will build, strengthen and sustain a strong collaboration with the tertiary research institutions such as the universities offering mining related courses in order to build, strengthen and sustain its capacity in mining project implementation and mineral finance management.

To avoid unnecessary distortion by direct government authority, MMIC, with an estimated seed capital of MK45 billion, will operate as a commercial company, like any other company in as far as compliance with mining legislations is concerned.

Commenting on the issue, National coordinator for Natural Resources Justice Network (NJRN) Kennedy Rashid said establishing a state owned enterprise in the mining sector is important as it will help in formalizing the ASM subsector which is in a mess with foreigners smuggling the country’s precious minerals.

“The Company is important as it offers hope in formalizing the ASM subsector, and also providing a direct participation framework of the state in the mining sector as an investor or key stakeholder,” he said

Rashid, however, observed that establishing the national mining company is tricky because there are several models of state owned enterprises that can have different outputs.

He, therefore, appealed to government to come in the open and share the model of state owned enterprise it is planning to form.

Rashid said, “There are various models of state owned enterprises in mining such as independent state companies, holding companies and integrated companies.  Government needs to share first the model of the state owned enterprise it would like to advance as an Act of Parliament or just policy.”

 “In terms of necessity, I believe that considering the illegal mining activities, smuggling of semi-precious and precious stones and the absence of an organized formal market, such a company is necessary.”

Former President Arthur Peter Mutharika announced the formation of MMIC and plans to form the Malawi Mining Regulatory Authority in Parliament in June last year.

In October 2020, his successor Lazarus Chakwara said at one of his press briefings that his government will expedite the establishment of MMIC to regulate ASM operations.