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Government needs to address challenges dogging mining projects

May 16, 2024 / Harry Witness Mombanyah

We join a number of stakeholders in the minerals sector in congratulating the Malawi Government for successfully holding the inaugural Mining Investment Forum from April 23 to 24.

As reported in our lead article; at the forum, private firms in mining sector raised a number of challenges that are impeding development of mining projects.

Chairman of Akatswiri Holdings, who represented the private mining firms at the opening ceremony of the Forum, told State President Dr Lazarus Chakwera who officially opened the Forum that the challenges include delays in signing Mine Development Agreements (MDAs), inadequate transportation and energy infrastructure which increases operational costs, shortage of skilled labor and technical expertise, local market volatility and price fluctuations which affect profitability, and illegal mining activities that are undermining formal sector operations and revenue collection efforts.

We also feel the Malawi Government must seriously address these challenges in order to enable the sector develop.

Government indeed needs to find a way to ensure that MDAs are finalized in a short period of time to avoid frustrating investors as the world commodity market is very volatile hence these delays can affect the feasibility of projects in the long run.

Malawi also needs to address transport and energy issues affecting mining projects. The Ministry of Transport and Public Works has to prioritize construction, rehabilitation and maintenance of roads to mining sites.

It is sad that mining sites such as Wimbe area in Kasungu where Shayona Cement Corporation has limestone mines and a state-of-the-art clinker plant and Chimwadzulu in Ntcheu where Mwalawanga Mining has a mining licence for the highly priced corundum have poor access roads.

As Minister of Transport and Public Works Jacob Hara is quoted in our article on this page, arrangements should be made between mining companies and government to ensure that roads to these economically productive sites are in good condition.

Likewise, the Ministry of Energy needs to ensure that there is power available for mining companies. It becomes expensive hence frustrating for investors to be using diesel generators to power their heavy-duty operations.

There is also need for interventions to address shortage of foreign exchange which is affecting importation of various equipment for mining and mineral processing.

Notably, this problem is crippling the cement producers as for a long time, they have been complaining that they are not able to import spare parts for their plants and raw materials due to foreign exchange shortages, which is frustrating.

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