Mining & Trade News

Minister of Transport and Public Works Jacob Hara says the Malawi Government is planning to introduce electric locomotives to replace the diesel-powered trains.

Hara said the development will help reduce reliance on traditional diesel-powered engines as it is proven that in the long term it is much cheaper to use electricity than diesel.

The Minister said this when he addressed the Malawi Mining Investment Forum in Lilongwe where he emphasized that Government is in the process of developing the country’s transport network in order to facilitate development of the key economic sectors namely agriculture, mining and tourism.

 “We will be starting this big project this year probably in three months’ time. We are currently working on our first stage of the Beira corridor connection, our plan is to electrify the line once we hit Nsanje all the way to Blantyre then through Lilongwe and connecting to Zambia,” he said.

Hara emphasized the crucial role of an efficient transport system in facilitating the movement of materials and supplies essential for mining operations.

“The transport sector is the number one enabler for national development, this is why in this fiscal year’s budget we have incorporated funds for very specific projects including those in mining areas,” he said.

On water transport, Hara said the Tanzara corridor will be revitalized to connect it to Chilumba which will help to boost water transport to Chipoka.

“We want to bring back life to Chipoka as we plan to make it one of the biggest ports in the region,” said Hara.

Besides water and rail transport, the Minister also said Government is in the process of upgrading the road network across the country.

He, however, 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 the 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.”

The Passenger Welfare Association (PAWA), a national body that promotes and protects the rights of passengers, has called on government to include rail transportation in hauling fuel into the country.

As part of its input to the 2023/2024 fiscal year national budget, PAWA says its suggestion is a measure to reduce the cost of transporting which would in turn bring down the cost of consumer goods across the country

PAWA President Don Napuwa says in an interview with Mining and Trade Review that government needs to take aggressive approaches in dealing with hefty prices of fuel that together with other economic forces heighten the cost of living in Malawi.

“Fuel drives the economy so if the price of fuel is high, it means the cost of living will automatically skyrocket as the prices of goods and services are also determined by transportation costs,” he says, urging government to devise means of reducing the price of fuel in order to induce a fall in related economic components.

“We propose that government facilitates ferrying fuel by rail,” he says pointing at the effects the Covid-19 pandemic which slowed down the economy and affected forex inflows resulting in fuel shortages and the subsequent escalation of commodity prices.

Napuwa notes that government has a choice either to consider their proposal or to adjust Pay-As-You-Earn tax bracket from K100-thousand to K250-thousand or K300-thousand and raise the minimum wage from K50-thousand to K150-thousand.

He also asks government to actively participate in transportation services especially movement of people.

“We expect some of these practical strategies to be adopted when developing the budget so that the livelihoods of local Malawians are cushioned,” he says

In a separate interview, Minister of Finance Sosten Gwengwe says government is determined to take-heed of every contributions made by stakeholders bearing in mind that there is need to reduce public debit which he describes as a main constraint preventing the country’s economic independence.

Gwengwe says: “Basically most of the proposals that various stakeholders are bringing on-board are things that the Ministry is already considering and now it is working in ensuring that the next budget should be centric on looking at the productive side of our economy with private sector as the main ally of our developmental projections.”

“We want the 2023/2024 budget to be inclusive in such a way that it should reflect the aspirations of the private sector, civil society organizations and all Malawians.”

The Malawi Government has planned to construct a railway line from Central to Northern Region under a Public Private Partnership (PPP) model.

The Public Private Partnership Commission (PPPC) says in a statement that it is currently seeking transaction advisory service provider to assist the Ministry of Transport and Public Works in the implementation and development of project.

The statement explains that the transaction advisory services will assist in determining the technical, legal, financial and environmental feasibility of developing and implementing the railway line, under a PPP options report which will recommend the best way to structure the PPP.

The statement reads: “It will further determine the most economical route of the railway line from Central Region to Northern Region to offer best trade services to Malawi.”

“The transaction services will also determine best option mix with the existing ports of Chilumba and Chipoka; existing road network and existing railway lines on the Malawi and Tanzania side as the situation may dictate.”

“The transaction service with also support the Ministry of Transport and Public Works in identifying a private partner to design, finance, construct, operate and transfer the required railway track and associated services which include operations of the locomotives within a given timeframe, quality, budget and scope.”

PPPC states that the Advisor is required to undertake a comprehensive PPP feasibility analysis for the Ministry of Transport and Public Works to establish the viability and affordability of constructing the railway line and operation of associated services.

It says a PPP option is considered an optimal solution and if the client opts to proceed to the procurement stage after obtaining all necessary approvals, the Consultant may be required to provide the necessary technical, legal and financial advisory support for the procurement of the private partner to design, finance and develop the railway line.

“All activities shall comply with the provisions of the PPP Guidelines and procedures Manual and other applicable procurement and PPP principles and regulations,” the statement reads.

It says the consultant will provide the Commission with all the bidding administrative support necessary including advertising, bidder communication, drafting and other administrative support for the entire procurement process.

It further says that an Evaluation Team comprising various stakeholders, assisted by the consultants, will evaluate the bids following guidance given in the Bid procedure as a Best and Final offer (BAFO) process.

The Advisors will assist PPP in the final negotiations comprising of categorising issues appropriately, developing timelines for completions and planning negotiation strategies and processes for reaching an effective agreement as the selected consultant will be expected to provide services for all the two phases which will be covered under one contact.

“Interested consultants should provide their information demonstrating that they have the required qualifications and relevant experience to perform the services,” says the statement.

It says the preferred consultants should have demonstrable experience of at least seven years of providing similar services, that is PPP detailed feasibility studies and procurement support to either the public or private sector or both.

PPP says the firm should further demonstrate having knowledge of the African operating environment as it affects the implementation of the PPPs especially in the railway transport sector.

The statement reads: “In addition, the team should provide evidence of a proven track record in successfully transacting PPPs in the ranges of the required sums of money in the past five years in various sectors.”

“It should also demonstrate having solid team of professionals in the relevant areas such PPPs, Financial and Risk Analysis, Mechanical/Transport Engineering, and Quantity Surveying with individual experience of not less than five years.”

It says the consultants will be selected using Quality and Cost Based Selection (QCBS) method which is in accordance with the procedures set out in the Public Procurement and Disposal of Assets Act 2017.

The deadline for submitting expressions of interest is November 15, 2022.

The Malawi Revenue Authority (MRA) has identified the transport sector as a key element that promotes smuggling of goods into and out the country.

A meeting between the tax regulatory body and transporters in Malawi’s southern region held to discuss customs and excise processes, procedures relating to importation and exportation of goods noted the existence of a criminal syndicates in the rail, air, river, maritime and mostly in the road transport sectors.

According to MRA’s Taxpayer Education Manager, McHizzal Kawanga, smuggling remains one of the bottlenecks that deprives government import and export tax revenue that would otherwise have helped it to fulfil its financial obligations.

The meeting was aimed at acquainting transport sector players with relevant legal processes required to be followed when importing or exporting different goods.

“We are aware that some of the players are not familiar with laws involved in their businesses and may be vulnerable to manipulation or cohesion to smuggle goods using unchartered routes or to provide false information to tax authorities.

“We appeal to transporters desist from such acts and ensure that their drivers are well warned against the malpractice,” he said

Commenting on the influx of foreign transporters getting more transportation deals as compared to local transporters, Kawanga said that despite MRA not being the responsible body that facilitates transport contracts, it would be commendable if local players are prioritized since it’s the local players’ value chain that contributes significantly in taxes.

In his remarks, Mike Missi, a representative for Zagaf Transport, commended MRA for engaging them on taxation issues regarding importation and exportation of goods, saying the transport sector is indeed vital in tax evasion through combating smuggling.

In a bid to minimize haulage losses incurred as a result of encountering empty return trips, one of the local players in the transport sector, Fast Express Logistics and Courier (FASTEX), says they have introduced an exchange and backhauling management system that will help address the problem.

According to Patrick Chatangwa, Fastex CEO, the backhauling management program is saving transport companies from accruing lots of empty miles, which significantly contribute to unaccounted for wear and tear as well as soaring transportation costs.

“The major challenge that transporters in the country face include lack of an organized digital platform that can link them up in real time with companies or individuals who are seeking their services at a given time,” Chatangwa says.

“Fastex has come as a solution that will facilitate freight exchange by encouraging individuals and companies to register their transportation needs or enquiries on our platform,” explains the executive adding: “They can advertise empty trips and spaces in their vehicles at competitive rates.”

The platform, whose database currently has more than two hundred plus transporters exchanging market information, facilitates load sharing and back hauling, which are new concepts in Malawi but have significantly helped transport operators to fill empty trucks on their way back to a depot.

Chatangwa adds that companies that want to outsource transportation of their goods can as well capitalize on the concept and pay less than they would if they were to hire vehicles on their own.

“An empty truck is a loss to a company considering the skyrocketing fuel prices,” emphasises Chatangwa.

The program is very efficient and provides advance payment to assist transporters procure necessities such as fuel for the trips while the balance is paid on Cash On Delivery (COD) basis upon production of proof of delivery (POD).

Th Fastex CEO claims that their strong financial muscle is supported by financial instruments predominantly offered by their primary banker First Capital Bank (FCB).

Chatangwa highlights that a well consolidated freight exchange management programme is an ideal way to minimise high carbon emissions as advocated by environmental activists since it will reduce number of vehicles on the roads.

“As fleets face increasing pressure to decarbonise and local authorities look to reduce urban congestion, the benefits of consolidation become more apparent,” he points out adding he expects more transporters and shippers to subscribe to this management system, which currently targets two thousand transporters by mid this year.

Established in 2021 Fastex is a subsidiary of Chatangwa enterprises which was established in 2009 and incorporated in 2016.

Malawi’s Roads Authority (RA) is seeking bids from eligible bidders for the supply and installation of ICT equipment at Mchinji /Mwami one stop border post.

RA explains in a Press Statement that the assignment, which will be financed by the African Development Bank (AfDB) as part of the Multinational Nacala Road Corridor Development Project, will be completed within four months.

It says bidding will be conducted through open competitive bidding procedures as specified in the Bank’s procurement framework and is open to all eligible bidders.

RA will hold a site visit and pre-bid meeting at the Mchinji/Mwimi border post on the Malawi side at 10 :00 am on December 17, 2021.

Interested eligible bidders may purchase bidding documents for a non-refundable fee of 20,000 Malawi Kwacha or its equivalent in a freely convertible currency. The mode of payment is cash or bank certified cheque.

The interested eligible bidders can obtain further information from the procurement section, Roads Authority headquarters, Functional Building, Lilongwe and inspect the bidding documents during office hours starting from November 29, 2021.

The deadline for delivering bids is January 24, 2022.

The works shall comprise supply and installation of ICT equipment in three different lots as follows

LOT 1: LAN and phone system, CCTV facilities, Access control system, Voice Evacuation system and Background music control

LOTS 2:  Fire Detection system

LOTS 3: ICT Equipment

Bidders are free to bid for one or any number of the above mentioned lots.

CONTACT:

+265 1753699

EMAIL

ipc@ra.org/mmalinda@ra.org.mw

The IPDC Chairperson, Road Authority, Functional Building, Off Paul Kagame Road

Private Bag B346, Lilongwe 3, Malawi

Theft and vandalism of rail infrastructure has become a major safety risk along the 706 km track line operated by Nacala Logistics Limited in Malawi.

Speaking on the sidelines of the launch of a Railway Safety Week in Blantyre, Nacala Logistics Country Director, Gustavo Stein, told Mining and Trade Review Publication that theft and vandalism of rail-line equipment poses increased threat to human lives.

He revealed that the ongoing damage to rail infrastructure did not only affect Nacala Logistics as an operator, but also the national economy, the social and economic lives of poor commuters and other land users along the rail-line where 16 accidents have now been registered across the country.

“We are struggling with vandalism on our railway systems where increased theft of pandrol clips and other rail materials has forced us to suspend operations between Limbe and Balaka as a safety measure to protect our passengers,” he said.

Stein explained that the safety week was one way of raising awareness on the dangers of tampering with rail materials.

At the end of the exercise, the company is set to attain a zero accident target through the use of diverse communications solutions to reach out to rural masses along the railway lines on how to prevent railway associated accidents.

In her remarks, the Deputy Transport and Public Works Minister, Nancy Mdooko, who graced the occasion, said the Railway Safety Week is also part of governments’ effort to improve the railway system so that it moves in line with national transport plans.

“This event is important for people living close to railway lines so that they understand that it is 100% possible to prevent railway associated accidents,” she said of the function which is expected to be an annual undertaking.

This year’s commemorations are being hailed under the theme “Zero Compromise, Zero Accidents, Zero Harm” and is running from October 24 to 30, 2021.

The theme was chosen to highlight the importance of adhering to safety principles without compromise.

Nacala Logistics runs freight and passenger services with the freight services operating both internationally and domestically while the passenger service only operates within the country.

The company runs 53 locomotives and 669 cargo wagons, 56 of which are tankers.

A study done by an independent expert on logistics and infrastructure solutions for the Kasiya rutile project has confirmed Nacala Logistics Corridor (NLC) as preferred logistics route to haul the product to the world market.
The Kasiya deposit, which is being developed by ASX-listed group Sovereign Metals, is one of the largest undeveloped natural rutile deposits in the world located in central Malawi less than 50km from its capital city Lilongwe which provides exceptional benefits from the existing infrastructure available.
Sovereign Metals Managing Director Julian Stephens explains that the study has confirmed the NLC as reliable, efficient and high standard logistics solution with excellent existing infrastructure.
Stephens commented: “The exceptional established infrastructure in Malawi should result in a positive capital and operating cost outcome for Kasiya.”
“The availability of existing road, rail and port infrastructure for product export and project supplies’ imports provides a huge advantage for our world-class Kasiya Rutile Project.”
He explains that Sovereign will directly benefit from the exceptional existing infrastructure in central Malawi, which offers the preferred logistics route to the Nacala deep-water port in Mozambique through the Nacala Corridor for the export of mineral products to global markets.
Stephens also says established operation-ready logistics infrastructure provides significant capital and operation costs savings to the Company as the project continues posing a greenlight.
“By adopting the Nacala Rail Corridor as its preferred logistics solution with almost all overland distance on rail, Sovereign has the potential to reduce environmental impact and carbon footprint of Kasiya significantly compared to all-road alternatives,” says Stephens.
Sovereign has an existing Memorandum of Understanding (MoU) with regional rail operator Central East African Railways (CEAR) now named Nacala Logistics, for rail freight, port access and port handling services and is continuing with discussions for increased volumes based on the outcomes of the Company’s forthcoming Scoping Study for Kasiya.
The rail line of the NLC passes through Sovereign’s licence areas with established access via a short haulage to the rail head at the underutilized operational intermodal rail siding at Kanengo located ~50km from Kasiya.
NLC line also passes across the southern end of sovereign’s Nsaru mineralized envelope and is just 20km from the central part of Kasiya.
Meanwhile, Sovereign is assessing the possibility of establishing its own rail siding as a logistics option as part of the current Scoping Study to reduce haulage and potentially reduce operating costs.
The NLC is a 912km rail line for the purpose of transporting coal from mines in western Mozambique to the port of Nacala via Malawi.
For Malawi, the NLC provides the shortest and most direct access to the sea and global commodity markets.
The Corridor stretches from Moatize in Mozambique to Chipata in Zambia and passes through Lilongwe in Malawi to the Port of Nacala on the Indian Ocean.
Development of the NLC was essential for the expansion of global miner Vale SA (Vale) & Japanese conglomerate Mitsui & Co.’s (Mitsui) coal extraction activities in the Tete region of Mozambique.
In January 2021, Vale acquired Mitsui’s interest in the Moatize mine and the NLC to become the wholly owner of the operation.
NLC transported a daily average of 16,000Mt of coal and 1,150Mt of other cargo, operating a fleet of 101 locomotives and 2,677 wagons in 2020.
The landmark infrastructure project was driven by the governments of Malawi, Mozambique and Zambia, Vale, Mitsui, a consortium of several international and African banks and export credit agencies including the Japan Bank for International Co-operation, Nippon Export and Investment Insurance and African Development Bank.
Specifically, the governments of Malawi, Mozambique, and Zambia have gradually increased their investment in the NLC to approximately US$758 million, with support from the European Union, AfDB, the Japanese International Cooperation Agency and the Export-Import Bank of Korea.
The railway in Malawi is operated by Nacala Logistics who manage and control the NLC on behalf of the Joint Venture.
NLC has a capacity of 4-million tonnes of general cargo annually through Malawi and now they are actively seeking new freight customers.
Sovereign’s ground largely occurs within a 75km radius from Malawi’s capital city of Lilongwe and provides the Company with excellent access to sealed roads and short haulage distances to rail and future inbound and outbound of operational consumables and critical parts.
Kasiya is perfectly located to utilize the Class-1 bitumen road network which directly accesses the deposit area.
In 2015, The Roads Authority of Malawi completed an upgrade of the 95km long, Lilongwe Old Airport-Kwanyanda-Santhe (S117) and Kasiya spur (T342) road projects.
These upgrades resulted in Class-1 bitumen standard roads to 6.8m carriageway with 1.5m single sealed shoulders.
Sovereign will be able to take advantage of this underutilized road network for inbound and outbound logistics with any potential development.
The Company recently announced results of a maiden Minerals Resources Estimate (MRE) study on its flagship Kasiya rutile tenement which confirmed the deposit as one of the largest natural rutile deposits in the world.
Stephens explained that the results of the study proved that Kasiya is a strategic and globally significant natural rutile discovery.
He said: “It is a remarkable result to achieve the maiden JORC mineral resource estimate of this scale, grade and global significance in under 18 months since discovery.”
“We believe this maiden resource is just the beginning and expect to upgrade and expand the resource over the coming quarters.”
“The Company is surging forward with the Kasiya Scoping Study which will target a large-scale natural rutile operation to help address the supply deficit and reduce the titanium industry’s environmental footprint.”
The study results also confirmed that Kasiya natural rutile is the purest, highest-grade natural form of titanium dioxide (TiO2) and is the preferred feedstock in manufacturing titanium pigment and producing titanium metal.
Titanium pigments are used in paints, coatings and plastics; and have also specialty uses including in welding, aerospace and military applications.
Stephens said the latest results give his Company strength to scale up studies to expand the tenement, which will later see the Company supplying the global market with high grade natural rutile.
Comparing Kasiya to the other major rutile-dominant resources, the Lilongwe deposit sits within the top two largest natural deposits alongside Sierra Rutile.
Stephens forecasted that further near-future resource growth could see Kasiya potentially becoming the largest and preeminent rutile deposit globally, with Central Malawi potentially becoming the largest rutile province in the world.
He said the advantage of the project is that it is being developed at an opportune time when current sources of natural rutile are in decline as several operations’ reserves are depleting concurrently with declining ore grades. These include Iluka Resources’ (Iluka) Sierra Rutile and Base Resources’ Kwale operations in Kenya.

Malawi’s Department of Marine Services in the Ministry of Transport and Public Works has revealed plans to improve the operations of water transport networks which have lost value amid continued demand for their services.

Director for the Department Captain John Mhango says in an interview the government and stakeholders are geared to restore the once vibrant transport system by among other things strategizing on improving jetties.

Additionally, the director notes the importance of also improving on the systems accompanying businesses such as ensuring good hospitality services both on the mainland and on the islands in order to build the travelling public’s confidence.

Mhango observes that the state of lodges along the water transport system is very poor and has contributed to the decline of traveling patronage since people are not comfortable to travel to places without resting places.

 “We also want to ensure that the boats that ply their trade on our water bodies are of high standards,” says Captain Mhango who added that the Covid-19 pandemic has also worsened the situation.

“Currently, water transport is facing a lot of challenges including Covid-19. The people who used to travel between the Islands and the mainland to buy goods for business no longer do so while the traffic of tourism in the country has also declined,” he says.

But Captain Mhango says once the department’s plans are operationalized water transport will claim back its glory from the now robust road transport services.

Cargo movement by water is much cheaper than it is by road.

In March 2019, the Malawi government launched a Likoma Jetty construction exercise at the Mbuzi Hill side on Likoma Island with full hope that it would elevate economic activities and liberate transport logistics.

Recently, the Deputy Minister of Transport and Public Works Nancy Chaola Mdooko revealed government plans to rehabilitate water and rail transport infrastructure.