Mining & Trade News

The Malawi Government says it will put to tender the country’s vacant petroleum and gas exploration blocks once the Ministry of Mining finalises revising the previously demarcated blocks.

The Ministry of Finance and Economic Affairs says in the 2023 Annual Economic Report that since 2020 and following relinquishment of exploration licenses by investors due to Covid-19 pandemic, foreign investors are showing interest to occupy the tenements.

The report states that as per law, the companies that closed their offices in the country surrendered their findings to the Ministry of Mining making it easier for new investors to continue from where they stopped.

Reads the report: “The Ministry is working on revising the previously demarcated exploration blocks and once this is finalized, the petroleum exploration licenses will be tendered for investors to access.”

“Historically, Malawi has never produced oil and gas, however, in the decade between 2010 and 2020, several investors have shown interest in Malawi’s oil and gas resources by conducting exploration activities which have revealed that the country has the potential to produce both offshore and onshore oil and gas.”

“Though the investors relinquished their exploration rights due to economic constraints caused by the Covid-19 pandemic, geological data and information was passed on to the Ministry of Mining as required by the law.”

Besides potential for oil and gas, Malawi has a diverse mineral resource base consisting of energy minerals – coal and uranium; industrial minerals such as rare earth elements, bauxite (source of aluminium), and heavy mineral sands bearing titanium; niobium, tantalum, construction materials – rock aggregates (such as granite), clay, limestone; and precious metals and stones mainly gold and gemstones.

Many of the mineral resources have previously been explored and evaluated by Government and private investors whereby a wealth of geological data is available for investors to work with to develop economically viable mining operations.

The report says REE exploration in the country is showing significant potential as evidenced by exploration results by Lindian Resources Limited, an ASX-listed company running Kangankunde Project in Balaka district.

It says the tremendous results provide opportunities for investors into the project as well as other sites around the project that may have mineral potential.

The country has also made several gold discoveries being operated by Artisanal and Small-scale Miners (ASMs) in recent years but a definite exploration work is yet to conclusively define a significant gold resource viable for medium to large-scale operations.

“While the Ministry of Mining will continue to facilitate the formalization of existing small-scale mining groups, licensing regime is open to local individuals and registered bodies interested in participating in the sector,” reads the report.

Other notable mineral resources under development are rutile found in Lilongwe, which is a source of titanium; heavy mineral sands located in the lakeshore area of Mangochi and Salima bearing titanium, zircon, and other industrial minerals; and graphite in Lilongwe, which has vast industrial applications for example in batteries and lubricants.

The report also stresses that the Malawi Government continues to undertake a number of interventions to foster productivity, transparency, and accountability of the sector so that it contributes significantly to inclusive wealth generation and economic growth in line with the 2063 Vision.

Some of the key interventions include: maintaining public engagement on mining issues through social media, mainstream media, and other public forums; licensing and training of mining cooperatives and associations with a focus on health, safety, environmental management, and compliance with reporting and payment obligations for license holders.

The report also says the Government will proceed in negotiating and finalizing Mining Development Agreements with investors on key projects such as Kayerekera Uranium Mine (Lotus Resources), and Songwe Hill Rare Earths Project (Mkango Resources).

It further adds that the country has the interest to support mineral exploration programmes with quality data and technically competent personnel, while providing technical and statutory guidance to proponents; review the Mines and Minerals Policy to create a more attractive investment climate in the country; review the Petroleum (Exploration and Production) Act, including the subsidiary legislation and; review the Explosives Act including the subsidiary legislation.

“The Government will also operationalize National Mining Investment and Development Corporation to facilitate Public Private Partnerships, as well as finalize geo-mineral resource mapping across the country,” the report reads.

Since 2021, the mining sector has been growing due to a conducive legal and regulatory environment for the participation of all interested players, both local and international.

Malawi 2063 identifies mining as a key driver to the economic development of the country under the industrialization pillar in the country’s effort to achieve the upper-middle income status by the year 2063.

Mining has tremendous potential to support industrialization in Malawi which the report says has not been fully harnessed.

The sector contributes only one percent to national income, an indication of the need for more policy reforms to improve legal and regulation framework; administrative procedures, and building capacity to enhance oversight and local participation.

Business operators and residents of Milepa Trading Centre in Chiradzulu have expressed concern over a prolonged power outage in the area saying it is choking their businesses and creating insecurity in the area.

The area has had no electricity power since early November, a situation they allege has caused many to deplete their business capital and gains, as well as acute damage of household fresh supplies.

“Just imagine, some of us in the business of barbershops and showing videos have been relying on petrol and diesel generators; but considering the high cost of fuel, this is unsustainable. We are forced to do so because we have families to take care of, food to buy and wages to pay; this is unfair, ESCOM has choked our businesses and is killing us slowly, as our capital is gone and livelihood is threatened,” said Frank Matimati, who operates several barbershops, video showing business and a video burning outfit.

He further complained that he uses 7-Litres of fuel per day which is contributing to losses considering a litre of petrol cost costs around K2, 500.

“ESCOM is not being human as we have had no power from November to date, they have to find a solution,” he complained.

Chair for Milepa Business Operators, who is also a prominent maize mills’ operator in the area, Mc Brazio Mandawala, also extremely lamented over the delay by ESCOM to fix the problem caused by a scorched transformer, which he said has left the active trading centre in the dark, even during the peak business times of Christmas and New Year.

“It is worrisome that our confidence in the State electricity company is being taken for granted by some officials within the system. Just imagine, they brought us a small transformer, without the right specifications of our power demand here, and it burnt few hours after it was installed – now we do not know what they are thinking about us,” he said.

Mandawala, who is also Group Village Head Likhotho of the area, feels it would be fair for ESCOM to convene a meeting with the locals and business captains of the area, to explain what the company is doing about it.

He said: “People have lost their capital because of this problem, and that means they have lost their sore livelihood source. So, when we say that the ESCOM officials’ acts are inhuman, you should understand,” he said, stressing that the people of the area, along with members of the business community, are planning a massive demonstration against the power supply company, to showcase their bitterness.

“We soon intend to walk all the way to the District Council Offices, many kilometres away, then all the way to ESCOM offices in Blantyre, to express our bitterness. It is sad that some duty bearers do not have a human heart, they enjoy the suffering of others,” he said.

However, in an interview on Wednesday ESCOM’s Spokesperson Kitty Chingota said the company is aware of the problem and working hard to procure transformers that suits the specification of power supply in Milepa and other numerous places with the same problem.

“We are indeed aware of the Milepa problem, and we are very sympathetic of their problem. We ordered transformers of the right specifications, and are awaiting delivery so that we erect in such places – by the way, there are many other places that needs such transformers, but we are doing everything possible that our customers be serviced appropriately,” she said.

Chingota explained that the problem mostly is that such transformers are imported and they are not normally found readily available on suppliers’ counters, hence their manufacturing comes in after the orders are placed.

The Ministry of Agriculture says it has developed investment proposals on ventures for production of some agricultural commodities following the comprehensive analysis and consultative process conducted in all regions of the country.

Minister of Agriculture Sam Kawale announced the development during the National Agriculture Investment Forum which was held in Lilongwe to support the Hand in Hand initiative being championed by the Malawi government in support of Food and Agriculture Organization of the United Nations (FAO-UN).

Kawale explained that the investment proposals were presented at a global platform during the Hand in Hand Investment Forum in Rome, Italy, and the proposed investments are in areas  including, rice, banana, dairy, fisheries, and aquaculture value chains.

He said: “The Ministry of Agriculture recognized that for a successful implementation of the initiative, you and I need to take a leading role in mobilizing resources and providing technical support so that we move Malawi to be a wealthy and self-reliant nation.”

“This investment forum is critical to transforming the Agriculture Sector as we answer how to boost the sector’s contribution to economic growth.”

“In searching for solutions, we have always sought answers from various stakeholders to make suitable investments.”

“I therefore urge you to continue with the commitment you have shown so far by being part of the team to transform the agricultural sector.”

Kawale said the agriculture sector remains critical to achieving the better Malawi as stipulated in the national vision, the Malawi 2063 (MW2063).

He said this is consistent with the National Agriculture Policy (NAP) and the National Agriculture Investment Plan (NAIP), which seek to transform and commercialize the agricultural sector to achieve food, nutrition and income security.

Kawale also stressed on the need for a collaborative approach between the government and the private sector.

“Our agenda today is to empower agriculture sector players to attract sector investment and explore opportunities for capital investments in various value chains developed under the Hand in Hand Initiative (HiHi). The Initiative has provided Malawi with an opportunity to map out investment options,” he said.

In his remarks, FAO-UN Representative in Malawi, George Phiri said their support towards the Hand in Hand Initiative was to ensure that the Malawi is using agricultural technology and sustainable ways of agricultural investment in eradicating hunger.

Phiri also urged investors, both local and international, to pump in more capital in farming to gain more profits as well as employ more labour.

This year’s Agricultural Investment Forum was organized under the theme of ‘Supporting Food Systems Transformation through Informed Agricultural Planning and Investment.’

The Hand in Hand initiative was established to address the food crisis and support the goals of eradicating poverty (SDG1), ending hunger and malnutrition (SDG2), and reducing income inequality (SDG10), by boosting agricultural transformation and sustainable rural development.

Local firm Akatswiri Mineral Resources says it has completed Phase 1 drilling programme for the Chambe Basin Rare Earths Exploration Project in Mulanje Mountain, Southern Malawi.

Akatswiri Chairman Hilton Banda says in an interview that the Company is now waiting for the drilling results as the samples extracted from the site are being processed at a laboratory in Perth, Australia.

Banda explains that he is confident of coming up with exciting results because rare earth mineralisation is visible in all the samples.

He says: “Chambe is a unique rare earths deposit as it is an ionic clay deposit. These deposits generally have several advantages over hard rock deposits, including lower operating and capital costs and shorter timelines for development.”

“Chambe is one of the few large ionic clay-hosted rare earth elements (REE) deposits outside of China, where currently a significant portion of global REE production is sourced.”

The Chambe basin has a central part that has recessively weathered soils that are up to about 15 m thick containing REE’s of the ionic adsorption.

Banda says such REEs in ion-adsorption deposits can be extracted by simple leaching of common chemicals in contrast to other types of REE deposits, which require complex and expensive processing.

“Rare earth recovery will be by simple mining and processing methods as the thick intercepts near surface means simple low -cost conventional and free -dig open pit mining,” he says.

Since Mulanje Mountain is one of the leading tourist destinations in Malawi, he explains that Akatswiri is pursuing a Sustainable Mining and Tourism approach where by adopting open -pit mining with responsible rehabilitation practices will be essential to conserve the environment while extracting REEs.

“The mining project will prioritise the protection of waterways (tributaries) by strategic geotechnical drainage system and an aerial way to transport the ore from the plateau which is the most reliable way to reduce vibration of ground mode of transport, and also a source of mine tourism attraction,” he says.

Akatswiri has been engaging members of the local community in the area including at District Council level to provide them an opportunity to express their views regarding the project, discuss the environmental and social impacts of the project, and derive mitigation measures of the adverse negative impacts of the project.

The Company organised a tree planting exercise in liaison with members of the community as part of its environmental conservation programme for the area. The Akatswiri management team comprises top notch business executives and professionals including Mr Banda, Mrs Josephine Banda as Executive Managing Director, Mr Ashutosh Srivastava as Board Technical Advisor, Mr. Jason L Greive as Non-Executive Director, Mr. Bilal Mahomed Non-Executive Director, Mr Nathaniel Ferrero Non-Executive Director, Mr Kalekeni Kaphale Company Lawyer, Dr. Joshua Chisambi Chief Geologist, Mr Gavin Beer Consulting Metallurgist, Johnstone Livata Director of Finance and Maston Gondwe Accountant.

Managing Partner for Perekezi ASM Consultants Chikomeni Manda has urged Artisanal and Small Scale Miners (ASMs) in Malawi to manage their finances prudently in order to be able to access loans easily for the growth of their businesses.

Manda, who has experience working in the ASM subsector for years, told Mining & Trade Review that when the ASMs are able to manage their finances properly they easily finance value addition of their products, which helps them realize increased revenue for the growth of their business.

Manda said that proper management of finances will also help the ASMs to have collateral to access loans from banks and invest more and grow their business.

He said: ‘’Most of the ASMs fail to get loans from banks because they do not have collateral. This is a huge setback to the ASMs who fail to to add value to their products due to lack of finances.”

“Consequently, these ASMs sell their products to middle men at a very cheap price.”

Manda observed that most of the ASMs do not take the business seriously as they work on hand to mouth basis instead of properly managing their daily finances to add value to their products and realize more revenue from sales.

Manda also urged ASMs to always acquire information on availability of mineral resources from relevant stakeholders to avoid losing money in following up rumors.

Manda also asked government to increase funding to the Geological Survey Department as this will help it to explore and discover mining sites for ASMs.

He said this will minimize expenses for ASMs accrued in searching for places to mine.

Manda also asked the Ministry of Mines to provide information to the ASMs on the importance of having mining licenses as well as how and where can they get relevant licenses.

Mineral exports in Malawi are dominated by semi-precious and precious stones (gemstones), ornamental (dimension) stones, lime products, rock samples, and soil samples.

The 2022/2023 Annual Economic Report produced by the Ministry of Finance and Economic Affairs indicates that gemstones and dimension stones continue to be exported to Asia (India, China, Thailand, Sri Lanka, Hong Kong, etc.), USA, England, Italy, South Africa, and more. A few gemstone exports are also made to Poland, Netherlands, and Switzerland.

Malawi has one of the most diverse ranges of coloured gemstones in the Southern Africa Development Community region. Most gemstones are mined locally by ASMs, whereas some are introduced into the market through international trade, especially from neighbouring countries such as Zambia and Tanzania.

The Report says that in 2022, higher gemstone production was recorded amounting to 329.45 tonnes reflecting an increase of over 2000 percent compared to the production in 2021. Gemstones produced included aquamarine, amethyst, citrine, garnet, rhodolite and ruby.

It, however, says despite high gemstone production, value addition is still very low implying potential revenues are lost as gemstones fetch lower prices in their rough (unprocessed) form.

ASX-listed Lotus Resources says it is finalising preliminary work programmes to allow an optimal restart of production at its Kayelekera Uranium Mine in Karonga in light of the positive market outlook for the yellow cake which has seen uranium prices rising.

The uranium market continues to improve, with the uranium spot price maintaining levels above US$90/lb U3O8e in recent weeks, and recently rising to US$104/lb.  The spot price has increased by over 100% since January 2023 driven by a shortage of supply in the spot market that has resulted in low traded volumes along with strong demand from financial groups, traders and utilities.

Lotus MD Keith Bowes says in the Company’s quarterly report for the quarter ended December 31, 2023 that the current uranium pricing and potential undersupply in the medium term are driving a revised timeline for the Kayelekera restart.

Bowes explains that Lotus plans to engage a debt adviser shortly to test the market for debt for Kayelekera.

He says: “The Kayelekera work streams have been prioritised to enable that a Final Investment Decision can be made as quickly as possible.”

“Lotus remains focused on restarting the Kayelekera Project as soon as practicable to benefit from the current strong and increasing uranium prices.  As such, Lotus is testing the market for debt and is focused on undertaking the necessary planned activities to prepare Kayelekera for a potential restart of production in late 2025 when the supply gap for the nuclear utilities is forecast.” 

Lotus is looking to meet the growing supply gap in the nuclear utilities’ reported fuel coverage profile which is supported by the increase in enquiries that the Company has received over recent months from the utilities.

This target start date will depend on a number of conditions being met and the successful conclusion of the described programmes including finalising financing and offtake for the project, which will involve appointing a debt advisor to assist in the financing process.

Lotus will also need to sign potential offtake agreements with suitable parties that can strengthen its position and complete negotiations and signing of a Power Supply and Power Implementation Agreement (PSA & PIA) with the Electricity Supply Corporation of Malawi (Escom), which is key to achieving reduced operating costs announced in the Company’s Restart Definitive Feasibility Study (DFS) in August 2021.

Bowes says the Company has planned a Front-end Engineering and Design (FEED) program leading directly into the detailed engineering design phase for the execution of the restart plan.

He explains that these studies will confirm the upfront capital cost estimate for the plant refurbishment and new equipment installations such that a control budget can be prepared for the restart.   

The studies will also validate the 15-month timeline initially determined for the refurbishment programme for the plant, update the operating costs from the Definitive Feasibility Study including incorporating new quotes from suppliers, and determine long lead items and early works programs.

Bowes says: “With regards to offtake, Lotus has received an increased volume of enquiries from North American utilities, with the understanding that a significant, if not all, of the planned production from the major current producers has already been sold and that the utilities now need to approach the next tier of suppliers, such as Lotus, to meet their future demands.”

“The Company plans to complete these activities within the next six months.”

Kayelekera Mine Development Agreement

During the quarter under review, Bowes says Lotus continued negotiations with the Malawi Government on the Mine Development Agreement (MDA) for Kayelekera, which will set the fiscal regime in which the Project will operate and is one of the inputs the Company is seeking prior to making its Final Investment Decision for the restart of Kayelekera.  

He reports that during the quarter, he travelled to Malawi to meet with the Ministers of Mining and Finance, and Attorney-General to progress the MDA, and attended a meeting of the Parliamentary Sub-Committee for Natural Resources and Climate Change.

Bowes says a meeting was also held with international industry heads and representatives of the US State Department, UK, EU and Australian High Commissioner and representatives from the World Bank.

“Good progress was made on several key discussion points, with a small number of elements still requiring further clarification and discussion.  The Malawi Government representatives continue to express eagerness to finalise the MDA as soon as possible, recognising the importance of mining to the future growth of the Malawian economy and the servicing of the International Monetary Fund credit facility,” he says. 

Transfer pricing is the general term for the pricing of cross-border, intra-firm transactions between related parties. “Transfer pricing” therefore refers to the setting of prices at which transactions occur involving the transfer of property or services between associated enterprises. Transfer pricing occurs when one company sells a product or service to another related company. Because these transactions are internal, they are not subject to market pricing and can be used by multinationals to shift profits to low-tax jurisdictions.

                     1. Objectives of Transfer Pricing

Companies use transfer pricing to reduce the overall tax burden of the parent company. Companies charge a higher price to divisions in high-tax countries (reducing profit) while charging a lower price (increasing profits) for divisions in low-tax countries.

                    2.  Transfer Pricing and Tax avoidance issues identified

Like other sectors of the economy, profit shifting pose risks in the mining sector.The IGF (Intergovernmental Forum on Mining) and OECD (Organization for Economic Co-operation and Development) has released guidance for source countries on transfer pricing in the mining sector. The transfer pricing and tax avoidance issues identified in the sector are:

                  (a) Abusive Transfer pricing

May occur during the sale of minerals and/or mineral rights to related parties. Under such circumstances, developing countries may require expertise to detect and mitigate transfer mispricing in the mining sector.

                  (b) Undervaluation of Mineral Exports
Profit shifting through the pricing of mineral products sold to related parties is a major concern for many mineral exporting countries. For developing countries, these risks are elevated where government agencies lack the mineral-testing facilities required to verify the grade and quality of mineral exports, as well as technical knowledge of the mining and mineral product pricing.

                  (c) International Tax Treaties
Most developing countries consistently raise concerns about tax treaty abuses. It is envisaged that countries with abundant mineral resources may be assisted in this area, considering how treaty provisions might have a significant impact on taxes imposed in the mining sector.

                 (d) Debt shifting

This is particularly significant for mining projects that require high levels of capital investment not directly obtainable from third parties and this makes substantial related-party borrowing a frequent practice. This creates excessive interest deductions thereby causing profits shifted to offshore via excessive interest payments.

                (e).Tax Stabilisation Clauses and harmful tax incentives.
Fiscal stabilization clauses create problems in terms of taxes because they can freeze the fiscal terms in the contract such that changes in tax law may not be applicable to existing mines. While tax incentives could encourage expansion of the sector, they may also lead to excess transfers of the gains from countries. It is on record that developing countries expect that that they will forego incentives entirely due to the pressures of attracting investment. However, it is important that countries should preposition themselves to understand how mining companies are likely to respond to those incentives.

                (i) Malawi Scenario-Kayelekera Uranium Mine.

In the Development Agreement, one of the tax incentive clauses was 10 year tax holiday.Though the mine life was beyond 10 years, it was unexpectedly put to a halt just after a 5 year production due to uranium price downturn.

The danger here was that the mine could even exhaust its mineral before the life of mine. In this regard it means the company could have mined for 10 years with a tax holiday.In the unforeseen circumstances, the mine could have been at liberty to transfer the profits to overseas so easily which means a 10 year tax holiday was likely able to make huge profits.

               (f) Offshore Indirect Transfers of Mining Assets
Transfers of ownership of company assets can generate significant income, which many countries seek to tax as capital gains. Transactions may be structured to fall outside the mining country’s tax base by selling shares in an offshore company holding the asset, without notifying tax authorities in the country where the asset/company is located.

                 (g). Abusive Hedging Arrangements
Hedging is a legitimate business practice in many commodity markets. It consists of locking in a future-selling price in order for both parties to the transaction to plan their commercial operations with predictability. A problem arises when companies engage in abusive hedging with related parties. They use hedging contracts to set an artificially low sale price for production and therefore record systematic hedging losses, reducing their taxable income.

  (i). Zambia vs Mopani Copper Mines Plc., May 2020, Supreme Court of Zambia, Case No 2017/24

Following an audit of Mopani Copper Mines Plc. the Zambian Revenue Authority found that the price of copper sold to related party Glencore International AG had been significantly lower than the price of copper sold to third parties.

A tax assessment was issued where the ZRA concluded that the internal pricing had not been determined in accordance with the arm’s length principle, and further that one of the main purposes for the mis-pricing had been to reduce tax liabilities.

This form of transfer pricing between multinational corporations and their African subsidiaries is typical of the tax avoidance practices employed by corporate taxpayers primarily to reduce their tax liabilities, as Zambia’s Supreme Court made clear in the opening paragraph of its judgement:

The ruling ordered that Mopani pay a total of 240 million Zambian Kwacha in taxes assessed for the 2006/07, 2007/08 and 2009/10 tax years within 30 days, bringing to an end a dispute that has been running since 2010.

Mopani Copper Mines Plc. first appealed the decision to Zambia’s Tax Appeal Tribunal, and after a decision was handed down by the Tribunal in favor of the ZRA, a new appeal was filed with the Supreme Court.

The Supreme Court dismissed Mopani’s appeal and ruled in favor of the Zambia Revenue Authority.

                   (h). Inadequate Ring-Fencing
It is possible that mining companies will have multiple activities within a country, creating opportunities to use losses incurred in one project (e.g., during exploration for a new mine), to offset profits earned in another project, thereby delaying payment of corporate income tax. Ring-fencing is one way of limiting income consolidation for tax purposes; however, getting the design right is critical to securing tax revenues while attracting further investment

The Ministry of Mining has pledged to continue supporting the Artisanal and Small scale Mining (ASM) sub-sector in the country to ensure that it adequately contributes to social economic development.

In her speech during the ASM Annual Mining Indaba in Lilongwe, Minister of Mining Monica Chang’anamuno said ASMs in the country play a major role of exploiting resources that would otherwise not have been commercially exploited by the medium and large scale mining investors. 

She said Government wants to address the challenges that the ASMs are facing including; low meaningful participation: Illegal mining operations and inadequate financial support.

“As part of the efforts of promoting local participation in the ASM sub sector, my Ministry has and is implementing a number of initiatives including formalisation of the ASMs into cooperatives. This financial year alone, the target is to train six groups and currently we have managed to train four groups out of six in good mining practices.”

“We worked hand in hand with Export Development Fund (EDF) to establish the structured market for buying gold and gemstones from small-scale miners, thereby providing readily available market.”

“We are also facilitating the construction of a salt production facility in Ngabu, Chikwawa district, however, inadequate financing and the recent tropical Cyclone Freddy are the main challenges to this initiative.”

Chang’anamuno said her Ministry is also working with the Technical Entrepreneurial and Vocational Training Authority (TEVETA) to develop a curriculum which will be used to train the ASMs in the country’s technical colleges; and sought technical assistance from the Canadian Government, for development of the ASM policy.

She said the Ministry has also taken a stand in ensuring that there is transparency and accountability in the process of issuing licences.

Chang’anamuno said the Ministry is giving equal opportunities to all Malawians who are interested in investing in the mining sector including the women and youth and also ensuring that the system employs a first come- first serve policy.

She said: “All Malawians are eligible to apply for a licence for mining, exploration or buying and selling of minerals and all the applications for licences are scrutinized by a committee which recommends either to grant or not.

“My Ministry has a web-portal, known as mining cadastral portal, where everyone including all applicants or holders of licences are able to see the category of application, type of mineral(s) being applied for, location of the licence, size of the area of the licence, date of grant and expiry of a licence. This web-portal is accessible by everyone, for free, at any time and any place.”

“You may also wish to know that my Ministry is ascribed to Extractive Industries Transparency Initiative (EITI) standard through the Malawi EITI as a key reporting entity in the extractive sector, and I am proud to indicate that compliance by mining companies in terms of data disclosure on production and revenue has increased.”

“Additionally, the validation score for 2022 for the extractive sector reporting was at 80%. This achievement is an indication that the Ministry of mining is now being recognized as one of the most transparent and accountable Ministries.” 

Meanwhile, ASM licences can be accessed at an application fee ranging from K10,000 to K50,000 for Malawians and as one way of easing long distance traveling, all clients seeking to access payable services can pay their fees for various services through direct bank deposits at their location of convenience. 

However, the Minister expressed concern over the spreading of false information about mining in the country and asked the masses to consult the Ministry for verification of information before dissemination.

She said: “My Ministry has noted with great concern that some people spread only bad news about mining activities in the country.”

“I am not disputing the fact that there are instances where some people are involved in illegal mining operations. However, our concern is that many people do not take their time to ask for and obtain correct information from my Ministry on issues concerning mining operations.”

“Instead they spread false information through various communication platforms especially social media.”

“There have been instances where by my Ministry has come across a lot of information on the media and used public resources to carry out investigations based on what has been circulating in the social media only to find out that it is not true.”

“Surprisingly, many people take pleasure in spreading such false information but do not take an initiative to find out the truth of the matter from my Ministry.”

In his address, Coordinator for Chamber of Mines and Energy, Grain Malunga said the efforts to promote and develop the ASM sub-sector do not only depend on the Ministry but require multi-stakeholder approach.  

Malunga said to put to an end to some challenges being faced in the sub-sector, there is a need for proper coordination between Ministry of Mining, Ministry of Trade, Chamber of Mines and Energy and financial institutions.

The ASMs Mining Indaba was organized under the theme of ‘Promoting Local Participation and Investment in Mining.’

Artisanal and small scale miners (ASMs) have urged authorities to put in place measures that will facilitate that they develop their businesses in order to graduate into mechanized medium or large scale mining.

Mining & Trade Review established in random interviews with ASMs that despite continued discovery of minerals in many parts of the country, local miners are not substantially benefiting because of lack of expertise, proper equipment and start-up capital.

Mylord Jere, a gold miner at Chimbiya Village in Traditional Authority Wimbe’s area in Kasungu, laments that despite that the area has potential for gold mining, he is failing to expand his business due to limited capital.

Jere, who runs a firm called Angoni Mining Company, also urged the Ministry of Mining to expedite processing of mineral licenses so that ASMs are able to easily acquire licences.

Said Jere: “It is through empowerment of local miners that Malawi can develop other than only relying on foreign investors.”

“If we, small scale miners, access capital and develop our operations, we will employ more Malawians hence contribute significantly to the government’s job creation agenda besides generating foreign exchange through the sale of minerals.”

“With the potential that the mineral sector has, it is sad that we are complaining of lack of forex. What is needed is to empower locals through provision of training opportunities and start-up capital to develop their businesses.”

Jere said with adequate capital, gold miners can benefit by procuring gold detectors which can help in identifying the minerals and mine other than just panning ignorantly as is the current scenario where by the process is labour intensive with minimal gains.

He said: “If Malawians can get machines and adequate start-up capital, they can go deeper in search of minerals rather than waiting for the stones to be washed to the surface by water. We are losing a lot because we do not go deep enough. To make matters worse we are not even aware of the real origins of the gold so it is like we are just groping in the dark.”

Administration and Marketing Manager at Maleta Gems and Jewels Ashley Simbeye commented in a separate interview that there is need for government to lobby cooperating partners and the financial sector to support small scale mining activities like it is doing in other economic sectors such as agriculture where by government is implementing the Agricultural Commercialization project to facilitate that small scale subsistence farmers graduate into commercial farmers.

“Many ASMs live a hand to mouth life. This needs to change if the country is to develop with mining as one of the key economic drivers as stipulated in Malawi 2063. If ASMs can get proper financing and expertise, I believe mining can compete with agriculture in raking in forex,” said Simbeye.

Simbeye also advised the ASMs to acquire relevant training on the trade from her institution in order to understand the true value of gemstones so that they are able to sell at a profit. 

“At Maleta Gems, we train artisanal miners on how to cut, polish, grade and know the value of each gemstone just by looking at it. Minerals come in different forms and colours and if you are not careful you can lose precious resources through wrong identification,” she said.

Minister of Mining Monica Changa’namuno said during the opening of the ASM Indaba in Lilongwe in December last year that government is doing all it can to empower ASMs as one way of taking many Malawians out of the poverty.

“The fact that we have minerals all over the country should be good news to all because we cannot just be relying on agriculture to bring in forex. We will continue engaging all stakeholders involved in the mining sector including banks to see how ASMs can get financing easily.” said Chang’anamuno.

Malawian banks shy away from lending money to ASMs because they consider the mining sector as risky.