Mining
Low budget allocation to minerals sector raises eyebrows
April 03, 2025 / Wahard Betha
Rashid: This could mean continued challenges for the Mines and Geological Survey Departments
Stakeholders in the minerals sector have expressed concern over low budget allocation to the mining sector in the 2025/26 national budget saying it does not reflect government plans of transforming the sector as outlined in Malawi 2063 and the Agriculture, Tourism and Mining economic strategy.
On February 28, 2025, Minister of Finance and Economic Affairs Simplex Chithyola Banda presented before the National Assembly the 2025/26 Budget worth MK8.05 trillion allocating MK14.2 billion to the mining sector.
Out of the MK14.2 billion, MK5.1 billion has been earmarked for Mining Regulatory Authority; K4 billion for the establishment of the state owned mining company that will operate under Malawi Development Corporation (MDC); K4.1 billion for Mining and Geological Services; and K1 billion for the Mineral Laboratory in Lilongwe.
But in an interview with Mining and Trade Review, National Coordinator for Natural Resources Justice Network (NRJN) Kennedy Rashid said despite that the allocation has increased with 160% from MK5.5 billion in the previous budget, the MK14.2 is still not enough considering the requirements in the sector.
Rashid said: “From the look of the overall increase in funding, the indication is that there is some intent to develop the mining sector from government considering that the previous year the sector got only 5.5 billion Kwacha.”
“The allocations of the current 14.2 billion kwacha still is not yet convincing. Specifically, on how the funding has been allocated. A huge chunk, 5.1 billion Kwacha, has been allocated for regulation. Our understanding is that government wants to mainstream regulation of the sector first which can assist in the compliance and enforcement of laws and regulations.”
“Even though the regulation has received significant funds in the current budget, what will matter is how such funds will be used and if it will be used largely on administration costs then this will impede the other functions of the regulator.”
Rashid also said though the allocation to the state-owned mining company is still on the lower side, it indicates the intention of government to start participating directly in mining sector operations.
He said if well governed, the state-owned company can assist in facilitation of the local beneficiation drive and job creation.
Rashid said: “While the 2025/2026 budget has increased overall mining sector funding, the Ministry of Mining has received only part of the 4.1 billion Kwacha allocated to both the Mines and Geological Survey Departments. This could mean continued operational challenges for the departments as they have to share a minimal allocation for their operations like the collection of other revenues by the Department of Mines and geological data collection by the Geological Survey Department.”
“The allocation for the mining laboratory is still on the lower side for the lab to be operational with modern standards and equipment.”
Concurring with Rashid, Coordinator for Chamber of Mines and Energy, Grain Malunga said the Malawi Government needs to put more effort to ensure that the state-owned mining company is fully funded and functional.
“What is needed is to fund the Company to embark on mining for import substitution, mining and processing of industrial minerals, management of government equity in mining and support Artisanal and Small-scale Miners in mining, processing and marketing,” said Malunga.
In his remarks, Seasoned Geoscientist Ignatius Kamwanje said even though the Government is doing well on inclusive sector transformation, low funding will still obstruct implementation of the viable incentives.
Kamwanje said: “The funding itself is not enough to run the sector hence limiting incentives. However, in terms of inclusive sector transformation, the government is partly giving a true reflection.”
“There is need to scale up capacity building and formalization of ASM, I do not see a visible government involvement in this aspect.”
Government outlines in the budget statement that it is implementing key programmes and projects to strengthen the mining sector and maximize its economic potential including: reviewing gemstone export procedures to enhance transparency and accountability in management of foreign exchange earnings from gemstones; facilitating the commencement of large-scale mining projects; strengthening enforcement and inspections to ensure compliance with mining regulations; conducting geological mapping to identify more potential mineral deposits of high value; conducting mineral processing research and analytical laboratory services to improve mineral value addition; and carrying out mining investment promotion to attract investors and stimulate sector growth.
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Rehabilitation:
The establishment of a stable and self-sustaining ecosystem, but not necessarily the one that existed before mining began. In many cases, complete restoration may be impossible, but successful remediation, reclamation, and rehabilitation can result in the timely establishment of a functional ecosystem.
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Remediation:
The cleanup of the contaminated area to safe levels by removing or isolating contaminants. At mine sites, remediation often consists of isolating contaminated material in pre-existing tailings storage facilities, capping tailings and waste rock stockpiles with clean topsoil, and collecting and treating any contaminated mine water if necessary.
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