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Malawi – A gem to be discovered

April 01, 2019 / Grain W. P. Malunga
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LAND AND ITS PEOPLE

Malawi is situated in south-eastern Africa and shares its boundary with Mozambique, Zambia and Tanzania.

The country occupies an area of 118,484 square kilometres and has a population of nearly 18 million.  About 20% of the population lives in urban areas.

The main official languages are English and Chichewa.  The warmth and hospitality of the Malawi people earned the country a name “The warm heart of Africa”.

His Excellency the president, Dr. Arthur Peter Mutharika, acknowledges the need to diversify the economy of this country through the development of the mineral sector. The investor is encouraged to venture into this sector which already consists of a disciplined mining labour force that has wide experience from South Africa, Zimbabwe, Zambia and Tanzania.

ECONOMY

Malawi has an open economy and the government’s role is to facilitate and regulate private investment to increase current mining contribution to GDP from 3% to 20%.

Malawi government’s pursuance of stable macro-economic policies by exercising fiscal and monetary discipline has encouraged the stabilisation of the Kwacha currency and the decrease in inflation rate from of 21.8 percent in 2016 to a current figure of about 9%.  The Kwacha is now one of the most stable currencies in Sub-Sahara Africa. Mining will contribute substantially this year from post Kayelekera Growth Domestic Product of 1% to about 4% due to increased activities in exploration and mining.

Malawi’s prudent economic management supported by more transparency in tracking revenue and expenditure has led to reduction in bank interest rates from 25% in 2018 to a current 15%.

EXPLORATION AND MINING OPPORTUNITIES

Exploration work continues to intensity since the 2013 – 2014 national airborne geophysical survey identified potential exploration targets for gold, platinum group metals (PGMs), nickel-copper-chrome, rare earths, bauxite, vermiculite, kimberlites, sulphide-gold-graphite, base metals and coal-uranium-petroleum.

Geological maps, magnetic contour maps, radiometric maps, electromagnetic maps, airborne geophysical interpretation maps are available at Geological Survey in Zomba.  These offer excellent support to exploration activities.

Minerals which require feasibility studies include Linthipekaolinitic clay, Mchinji and Lake Chiuta glass sands, Tengani and Lake Shore heavy mineral (titanium) sands,Kangankhunde rare earths (monazite), Chimutu graphite andMalingunde graphite, Tundulu rock phosphate.

Bankable Feasibility Studies are being done for Mabulabo niobium deposit (Mzimba), Songwe Rare Earths (Phalombe) and Malingundesaprolite graphite (Lilongwe).

Mining activities include coal in Rumphi and Karonga, Limestone for cement production in Kasungu and Mangochi; and semi-precious stones in Ntcheu, Mzimba, Rumphi, Chitipa, Mangochi and Chikwawa (corundum, aquamarine, amethyst and agate).

Kayelekera Uranium Mine is under Care and Maintenance since June 2014. Construction of nuclear energy plants in China, India, United Kingdom and United States of America are giving hope to increased demand for uranium and improvement of prices.  This gives hope to reopening of Kayelekera mine in the near future.

ATTRACTIONS

Government no longer neglects exploration and it has increased exploration expenditures.

Malawi has a new Mine and Minerals Act (2018) replacing the 1981 Act. A mining taxation Act was enacted in 2016 and offers a stable regime for 10 years to support the new Mines and Minerals Act.

The legal framework now adequately defines the investor’s rights and obligations to encourage community benefit sharing within a radius of 20 km.

Security of tenure is guaranteed to give maximum security to the investor e.g. protection against loss of mining rights. The Mining Cadaster system has been put in place to firm up accountability and transparency in grant of mineral rights. Malawi is member of Multilateral Investment Guarantee Agency (MIGA) and subscribes to International Centre for Settlement of Disputes.

Access to foreign exchange and repatriation of capital and profits are guaranteed after satisfying tax obligations.

Government continues to provide basic geological, legislative, economic and fiscal data.

Minimum ministerial discretion is practiced thanks to a capable Minerals Licencing Committee under the Comissioner of Mines and Minerals. Malawi continues to improve its road and telecommunication networks INSTITUTIONAL SET UPTHE MINISTRY OF ENERGY AND MINING:- This is responsible for broad policy direction on mining and legislation. It coordinates with other ministries on minerals, energy and mining issues. DEPARTMENT OF MINES:- It issues licences and administers exploration and mining licences.  It compiles production statistics and inspects exploration, mining and environmental work compliances. GEOLOGICAL SURVEY DEPARTMENT:- This undertakes reconnaissance geological mapping and mineral exploration.  It publishes geological bulletins, maps, and technical reports.  It is also responsible for compilation and maintenance of geological data base. MALAWI INVESTMENT ANDA TRADE CENTRE:- Other support institutions include Malawi Investment and Trade Centre (MITC) which helps register companies and negotiates investment incentives for the companies thereby streamlining the investment process.

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