Mining & Trade News

Mining expert and former Minister of Mining Grain Malunga has called on government to promote recycling of scrap metals locally other than allowing people to export the metal.

Malunga observed in an interview that the exported scrap metals are the ones used to make iron bars and other metal components which the country purchases at a very higher price.

“We need to put things in order and see where we can generate more money and even jobs. By exporting the metals we are killing ourselves twice. You sell the metals cheaply and buy iron bars at a very exorbitant price. I think we can do better on this since we are not producers of iron materials,” said Malunga.

When put to him that government has been trying its best to put in place a ban on scrap metal exports, Malunga said the bans do not yield anything because they are always temporary

“The authorities must treat this issue with the utmost seriousness it deserves. We do not need temporary bans because it leads to the buyers circumventing the system and continuing trading in metals for copper, iron and aluminium production,” said Malunga.

When contacted for comment, Trade and Industry Minister Sosten Gwengwe disclosed that there are new procedures on the issue which government put in place but he could not divulge a lot as he was not in office.

“Let us talk after the holidays, but there are new procedures in place,” said Gwengwe.

Meanwhile, the emergence of scrap metal buyers on the local market is said to be one of the reasons some car breakers are now leaving the business as they are unable to compete with scrap metal exporters on the market

The scrap metal buyers are targeting old or accident damaged vehicles for breaking and then exporting the parts for recycling in China.

When car breakers purchase an old or accident damaged vehicle they dismantle the car and sell part by part while scrap metal buyers just sell the whole car in one piece for chiseling before exporting.

Mining and Trade Review investigations indicate that the trade of buying damaged or old vehicles is now even being done by foreigners with more money a thing which has automatically lead to soaring prices.

Lilongwe based veteran car breaker John Nkisi of MJ Multitraders   claimed that the growing demand for scrap metal in countries such as China, has distorted car breaking business.

 “We used to buy old or accident damaged vehicles at low prices but the story is different. If we identify a vehicle to buy we are outbid by scrap metal buyers. In the end some car breakers are closing shop due to stiff competition,” said Nkisi.

As a way of survival Nkisi is now diversifying his business by investing in agriculture because he claims that the future of car breaking is gloomy.

“It could have been good if more investors were allowed into mining of precious metals used to make aluminium and steel. By doing this the country could be getting enough forex while creating sustainable jobs instead of exporting metals bought on the market cheaply,” Nkisi said.

 Nkisi also urged his fellow car breakers to look into the issue of forming an association seriously so that they can be speaking with one voice.

“An association for car breakers will help us speak with one voice and easily lobby with authorities on how they can protect us. We are of the view that businesses which can be done by Malawians must be left in the hands of Malawians.

An association can help them have a strong voice for lobbying and dealing with issues including that of foreigners dominating the trade and export of metals with ease.

“If we sell car components bit by bit, we can make a lot of money because these scrap metal buyers get the stuff cheaply. Imagine a kilogramme going at K200, and when processed into bars we pay as high K6000 per kilogramme, this is sad,” said Nkisi.

Mining Solutions Africa says it is pursuing strategic measures aimed at fostering growth and collaboration within Malawi’s mining sector.

Director Fredric Josiya says in an interview the Group, which operates as either contractors or sub-contractors specializing in mining engineering, will in 2024 expand its portfolio in areas such as mine designing and blasting with an ambitious vision to start own mining operations.

“We are mining engineers, and our current projects involve diverse aspects of the mining process, from design to execution. Our next step is to have our own tenements, allowing us to engage in actual mining operations,” he says.

As part of its growth strategy, Mining Solutions Africa has established a branch in Mozambique, expressing keen interest in expanding their operations beyond Malawi’s borders.

Josiya urged the Malawi government to invest in mining sector through allocation of adequate funds in the budget for exploration projects, specifically targeting gold and lithium.

He said the government would profit from the investment by selling exploration results to potential investors.

Reflecting on the current state of the industry, Josiya acknowledged the challenges faced in 2023.

He said; “It has not been a good year for us, as construction activities have been passive. However, we have observed a quiet resumption of construction works by the government in the last quarter, which is a positive sign, considering they are the main buyers of our focal jobs.”

Mining Solutions Africa is currently engaged in preliminary prospecting in various areas, with a particular interest in gold and gemstones.

Josiya outlined the company’s approach, stating, “After the preliminary results are out, we intend to engage government entities to process various licenses for robust explorations.”

Discussing mining financing and economics in Malawi, Josiya expressed concern about the lack of expertise in key offices.

He said; “As a country, we are not doing very well in mining finances and economics. We have just received two cohorts of professional mining engineers in our tertiary education institutions, and we lack experts in key offices, including lending institutions.”

Josiya highlighted the significance of having professionals with robust knowledge in mining issues in key positions, both in government and lending institutions.

He said: “These professionals are crucial for scrutinizing possible mining projects and facilitating their financing, similar to the situation in our neighboring countries.”

“For Mining to develop in Malawi, there is a need for the government to invest more in exploration works, with the help of well-versed professionals who can take charge of vital areas including budget allocations.”

Indian investors say there is a need for the governments of Malawi and India to sign a Double Taxation Treaty in order to prevent the taxation of the same income or assets in both countries, which is a stumbling block to investment.

A representative of the investors who is also MD for Trinity Ventures Inc. K.S. Gurulingaswamy says in an interview with Mining & Trade Review that it will be beneficial for Malawi to have a Double Taxation Pact with India in order to attract huge investments from that country.

Gurulingaswamy says:  “There are large number of rich Indian business people who are interested to invest in Malawi due to the good opportunities available.”

“They are interested to invest in sectors such as Agriculture, Tourism, Mining, and Renewable Energy.  However, due to the non-existence of a Double Taxation Treaty between the countries and the uncertainty faced due to it, such investors are hesitant to invest and start businesses in Malawi.”

Double taxation treaties offer several benefits to investors including avoidance of double taxation, which is done by specifying rules on how income should be taxed in each country to ensure that taxpayers are not unfairly taxed on the same income or assets in both countries.

Gurulingaswamy, whose company is prospecting for black granite in Mchinji, also explains that such a pact plays a role in the promotion of cross-border trade and investment by providing clarity and certainty to individuals and businesses regarding their tax liabilities in different countries.

“This clarity reduces tax-related uncertainties and promotes international economic activities,” he says.

Gurulingaswamy says tax treaties can also make a country more attractive for foreign investors by providing favourable tax treatment, such as reduced withholding tax rates on dividends, interest, and royalties explaining that this can incentivize foreign companies to invest in the country by making it more financially appealing.

Tax treaties also facilitate cooperation and exchange of information between countries’ tax authorities.

He says: “This helps in preventing tax evasion and ensuring compliance with tax laws by allowing the exchange of information between the signatory countries.”

“By providing clear guidelines for determining tax liabilities in cases involving cross-border transactions, tax treaties can reduce administrative burdens for taxpayers. This clarity simplifies tax compliance procedures, saving time and resources.”

Currently, South Africa, Ethiopia, Botswana, Namibia, Mozambique, Kenya, Tanzania, Zambia, Uganda and Morocco, which are enjoying massive investments from India, have a Double Taxation Treaty with the Asian economic giant.

Malawi has signed double taxation treaties with Botswana, Denmark, France, Kenya, Mozambique, Netherlands, Sweden, Switzerland, United Kingdom and United States of America.

There are also pending treaties with Egypt, Mauritius, Norway, China, Seychelles, Zambia and Zimbabwe.

Malawi taxes at source unlike countries like the United States that tax worldwide income on its citizens.

Artisanal and Small-scale Miners (ASMs) have identified a gold mining site in Milepa, Chiradzulu district which is attracting scores of miners, and local and foreign gold buyers.

One of the Miners Misheck Galaja confirmed in an interview with Mining &Trade Review that the ASMs are purchasing or renting land from smallholder farmers in the area for gold panning purposes.

Galaja said they are selling the gold grains, which he said are of good quality, to middlemen who have markets abroad or in turn sell to Export Development Fund (EDF) in Mangochi, because EDF officers are yet to come to the site to buy gold.

“We are selling to these buyers because we are looking for a ready market as we are in need of money for survival. We do not have money and time to take the gold to as far Machinga or Mangochi where EDF officers are buying gold,” he said.

Galaja said the ASMs started mining at the site in November, and they continue to land on good quality gold particles.

However, Galaja expressed concern over poor sanitation at the site due to shortage of clean water and toilets.

“We are at a high risk of contracting diseases such as cholera as we do not have toilets as well as potable water to drink, we just use the bushes as toilets putting ourselves at a high risk,” he said.

Galaja called on government to assist the ASMs at the site by ensuring that they are licensed and trained in sustainable mining practices.

Malawi has a number of ASM hotspots including Makanjira in Mangochi, Tukombo in Nkhata Bay, Bua River area in Kasungu, Machinga, Balaka, Neno, Nsanje and Matapira in Lilongwe.

Besides poor sanitation, other issues at the sites include child labour, alcoholism, marriage breakages and pupils dropping out of school to indulge in mining activities. 

Chegutu is a district in Zimbabwe where the first President of Malawi Hastings Kamuzu Banda stayed at one point in the 1960’s before Malawi’s independence.

In the 1960’s Chegutu was known as Hartley. But as one way of keeping history, Entrepreneur Cassim Alli has opened Chegutu Lodge in Dedza.

Alli says he wants to still be connected to Zimbabwe where his father once worked in the mines.

He says though construction of the lodge is yet to finish with the structure now 90 percent, he has been pressured by clients yearning for quality accommodation in the district to open earlier than planned.

Charges for the eight rooms that are operational range from K10,000 up to K15,000 and they are all self-contained, fully tiled, spacious and cozy.

With a fully stocked restaurant, customers can order any meal they want for breakfast, lunch and dinner.

Said Alli in an interview: “Dedza being a frontier town needs modern facilities and I was compelled to build the lodge here because of demand. Travelers from Zimbabwe, South Africa and even Mozambique pass through Dedza. In some instances, the travelers spend a night or two here and they need quality accommodation. The town is growing and on top of that there are tourist attractions such as Chongoni painted rocks, Dedza Pottery and Kungoni, sites that attract tourists.”

Dedza is also home to renowned secondary schools such as Dedza and Marist.

The two schools have produced distinguished individuals in society including top politicians and presidents.

“Dedza has a rich history and there are many individuals who have shaped their careers here or live in this district. We want to expand this facility and currently a hall is under construction and once completed we will be holding conferences, weddings and even other social gatherings,” said Alli.

The lodge is situated along the Blantyre-Lilongwe M1 road very close to the dip tank. It is also near a service station, shops, banks and other important facilities in Dedza including Ashley’s Bar, the Dedza Stadium and a coffee shop.

A regular customer to the facility Elliot Joloza was candid and frank in his assessment of the new lodge saying it has brought new standards in the hospitality industry in the district.

“This place is secure, close to the main road, has modern facilities and the staff are also very friendly. Every time I am sleeping over in Dedza I spend my nights at this lodge,” said Joloza.

He then called on government to assist up and coming businesses with loans so that they can expand and offer more employment opportunities to Malawians.

“When we talk of 1-million jobs we want Malawians such as Alli to be able to access loans so that they can employ many people. In that way they will be able to help government reduce unemployment,” said Joloza.

The National Construction Industry Council (NCIC) has announced plans to host the 7th international construction Conference and Exhibition next year, as one way of enhancing skills development and capacity building in the industry.

Acting Regulatory and Enforcement Director at NCIC,  Dorothy Nyongo’nya told Mining and Trade Review in an interview that they expect more international participants this time around compared to previous conferences.

“The conference is indeed on. This time around we hope to have more international participants even those from outside Africa. We have put fliers at our airports and we are using various platforms to share information regarding this event,” said Nyongo’nya.

She disclosed that previous conferences have attracted mainly participants from Southern Africa Development Community (SADC) countries but there is hope that the situation will be different this time around.

According to a statement in circulation, the conference which will take place from 7th to 8th August 2024 in Mangochi, will provide a platform for stakeholders to share experiences, develop solutions to challenges while positioning the construction industry in its rightful role of attaining the Sustainable Development Goals (SDGs) and the Malawi Agenda 2063.  

Reads the statement: “In keeping with its mission and goals, NCIC is planning to host the 7th International Construction Conference and Exhibition in August 2024 in Mangochi.

“The conference shall provide a platform for dissemination of research results from researchers, practitioners, developers and persons engaged in the construction industry,”

Objectives to be achieved during the conference include: sharing and taking stock of current best practices for construction excellence, adopting resilient and inclusive strategies in infrastructure development as well as fostering dissemination of practical research results.

During the conference delegates will also consider harnessing the formal and informal sectors in the construction industry, share and take stock of current best practices for construction excellence and consider issues of quality and standardization for the industry.

Conference sub themes will also include among others ,: innovation in the construction industry to promote efficiency and import substitution, adaptation of the construction industry to changing environment, climatic and social conditions as well as collaboration for sustainability and adaptation for accelerated infrastructure development.

Illovo Malawi Sugar Group says it is exploring the possibility of investing in power generation.

In the extracts from the audited financial statements for the year ended August 31 released on November 29, 2023 signed by Chairman Jimmy Lipunga and MD Lekani Katandula, the Group says it wants to develop a power supply scheme with the potential to supply excess power to the national grid and other major projects, thereby ensuring robust business improvement and fair returns for all stakeholders.

Lipunga and Katandula reports that the Group is currently in negotiations with the Malawi Government regarding water abstraction from the Shire Valley Water project.

“The refinement of approaches to the agricultural recovery program, factory optimization initiatives, cost reduction efforts, and execution of commercial strategies will remain pivotal to the group’s efforts to continually grow and transform the business,” say Lipunga and Katandula.

They state that the group acknowledges the valuable contributions of its people and will continue to invest in talent growth and development for the benefit of both the business and the Malawian Community.

Meanwhile, Illovo’s business’s profitability continues to be impacted by the ongoing depreciation of the local currency, the Kwacha, against major trading currencies; significant increases in electricity and diesel prices; global supply chain disruptions for essential commodities on account of geo-political tensions adverse economic and climatic factors; regulatory changes; and other external shocks.

“The Group will persist in implementing strategies to ensure resilience and growth remain fundamental to its operations, with a particular emphasis on safety as a foundation for achieving these objectives”, reads the statement

The Group reported K272 billion in revenue for the year, setting a new record-high for the group representing a notable 46% increase over prior year. Profit before tax was recorded at K81.8 billion, represented a 113% growth over the previous year.

Malawi’s power stability is expected to improve following the launch of the country’s first-ever Automatic Generation Control (AGC) system which is aimed at automating generation controls and boosting customer care services.

The United States Agency for International Development (USAID) funded Southern Africa Energy Programme (SAEP) to implement AGC whose end-users are Electricity Supply Corporation of Malawi (ESCOM) and Electricity Generation Company (EGENCO).

The AGC system adjusts the output of generating units in response to changes in the load demand and system conditions while also allocating load demand among available units in a cost-effective way.

This is achieved by adjusting the output of the generating units according to the changes in the load demand and the system conditions.

Speaking in Blantyre during the launching ceremony, a representative of ESCOM’s board chairperson, Jacob Muzalale, emphasized the significance of adopting the innovation saying the technology is vital as it allows the company to serve more customers easily as well as manage power supply and demand loads.

Muzalale said: “The launch is very important to us as ESCOM since one of our objectives is to provide a reliable supply of power, so reliability comes with a continuous supply of power to our customers. AGC is here to automate the process of communication between the supply and the demand including the management, and will go a long way whereby instead of manually calling technicians to increase or decrease the power supply the system will be done automatically hence improving power reliability.”

CEO for EGENCO Maxon Chitawo hinted that the new AGC system has been adopted to bring a balance between the power supply and load demand, frequency as well as power interchange with other systems.

Chitawo said; “The AGC is there to balance the power supply to the end users, we generate it in EGENCO then ESCOM takes it from us to transmit and distribute to the end users but within the system, there is variability in terms of loads through which they are deployed. Example one; a customer may switch on his maize mill while the other may be switching off so that causes an imbalance in the system in terms of frequency, so this AGC is there to control the frequency whereby when the load rises our generators should pick up and when it decreases our system should also produce less in line with the demand.”

“This is a good development as previously we were relying on making phone calls to give commands on the specified power to supply so it was inefficient. The motion has also rekindled the mutual working relationship with ESCOM as we both serve the same people.

“EGENCO is also set to introduce another system called the generation control monitoring system which will be used to measure water levels in all our hydro-generation sites so that we are always well-informed and make necessary adjustments.”

Previously, ESCOM managed generation control through its National Control Centre with EGENCO performing a similar task through its Generation Control Centre whereas local power plant operators do so through their generation sites using telephones.

Minister of Energy Ibrahim Matola expressed excitement with the development saying the innovation signifies the visionary leadership the country has to transform the economy through the creation of a robust energy sector as a pillar that holds productive sectors.

Matola said: “Initially, we were losing time as ESCOM used to wait for customers to call so that they are made aware of where the fault is but with AGC, the system will be able to reflect and detect all fault areas and have them rectified effectively therefore achieving optimum efficiency on time and resources.”

“So it is imperative that we experience such innovations in the energy sector as it is the pillar that holds all other productive sectors.”

The introduction of the AGC system is in line with ESCOM’s Integrated Strategic Plan for the period 2023 to 2027 launched in Lilongwe last week under the theme: ‘Driving value by building positive stakeholder relationships and partnerships.’

AGC also coordinates the economic dispatch of the generating units, which means allocating the load demand among the available units in the most cost-effective way.

The Sugarcane Growers Association of Malawi (SUGAM), which is the mother body of smallholder sugarcane farmers, has appealed to the Malawi Government to table the long awaited sugar industry bill in the national assembly

Robert John Dziwani, Chairperson for SUGAM said in a Press Statement that when enacted, the sugarcane industry law will help to bring sanity and fairness to the industry.

Dziwani said: “Malawi is the only sugar producing country in the Southern Africa Development Community (SADC) region that does not have any appropriate laws to govern the sugar industry.”

“This, in our informed and considered view is the cause of all problems that have dogged the industry since independence in 1964 and continues to disadvantage small sugarcane growers up to this date. “.

He revealed that in September 2023, several consultative meetings were held between growers, millers and the government but it is surprising that since then there has been a worrying silence from government on the progress of the tabling of the bill in parliament.

SUGAM was established in the year 2014 and was registered with the government of Malawi in 2018. The Association has over 7,200 registered growers drawn from Salima, Dwangwa, Nkhotakota and Chikwawa. Outgrowers grow sugarcane which is processed into sugar by sugar millers in Dwangwa , Chikwawa and Salima.