Mining & Trade News

In an attempt to market potential business opportunities able to lure foreign investors into the country, the Malawi and Belgium will hold a business webinar on September 22, 2022 aimed at discussing business opportunities between the countries.

A press statement by country’s investment and trade promotion and facilitation agency, Malawi Investment and Trade Centre (MITC) says the webinar which is targeting the private sector will discuss the business climate and investment opportunities available in Malawi to attract potential investors from Belgium.

The statement also explains that the meeting will provide a platform to strengthen and promote trade links between Malawi and Belgium.

Public Relations Manager for MITC, Deliby Chimbalu has described the business webinar as an important platform for exchanging important business information between Malawi and Belgium.

Chimbalu said: “This webinar is a great opportunity for our private sector to know and understand the available business opportunities in Belgium.”

“It is also a perfect space for them to learn and understand the market requirements especially those wanting to export to Europe in general and Belgium in particular.”

The business webinar is being organized by the Malawi Embassy in Brussels in conjunction with MITC and the Belgium Chamber of Commerce, CBL-ACP.

Belgium is one of Malawi’s top export destinations and recent data from the Observatory of Economic Complexity (OEC) World indicates that in 2020, Malawi exported about $161million to Belgium.

The main products that Malawi exports to Belgium are raw tobacco, sugar and tea. 

As a promotion agency, MITC identifies, develops and packages investment opportunities in Malawi; provides a professional service to all clientele; brands and markets Malawi as an investment destination; retains and expands trade and export activities and links opportunities to the developmental needs of the Malawi community.

MITC also operates as a One-Stop Service Centre for business start-ups in Malawi.

Knowledge is power and seeing is believing. In a bid to bring awareness to farmers on the performance of different varieties of seeds, local umbrella body of all seed producers in the country Seeds Trade Association of Malawi (STAM) recently organized field days in the Central, Northern and Southern regions of the country.

During the field days, the Association showcased various seed varieties to farmers to enable them appreciate how they perform in respective areas of the country. One of the areas where the event took place was Mikundi Agricultural Extension Planning Area (EPA) in Mchinji District.

Speaking in an interview on the sidelines of the field day in Mchinji, STAM secretary general, Nessimu Nyama said the event was critical and beneficial to farmers because it (event) enabled them appreciate how various seed varieties can perform in various parts of the country with diverse climatic conditions, weather, rainfall patterns and soils.

According to Nyama, seed varieties which were used as samples in the project, were obtained from 22 seed companies which are STAM affiliates. He added that the Mchinji event was also aimed at helping farmers to move with time in as far as seed selection is concerned.

“Farmers are wise enough to make their own choices. You know there are issues of climate change that have swept across the globe. So we would like to see farmers moving with time because, they might be trusting seed varieties that cannot cope with the current climate change. As you are aware, the rains are not as prolonged as they used to be. We have short rainy seasons these days. So we are urging farmers to go for varieties that can do well even when the rainy season is short,” Nyama explained.

STAM general secretary therefore encouraged farmers to buy modern seed varieties so that they can realize bumper yields. He also highlighted that quality of seeds is not only crisped in productivity but other aspects as well that include drought tolerance and disease resistance.

Nyama who is also a board member of Africa Seed Trade Association (ASTA), challenged farmers in the country to participate in field days to learn more about hybrid varieties that are performing better than what they used to know.

Quizzed on the fairness of the exercise, Nyama said: “there is no biasness towards any company. We have varieties from all the companies for farmers to choose and there are no company names on the tag, instead code numbers were used to represent names of companies. As an umbrella and nonprofit-making body, we promote all our member companies equally.”

On this point, he applauded government through the ministry of agriculture for introducing the Affordable Input Program (AIP) describing it as one of the channels that STAM uses to convey its technologies to the farmers.

“The program takes huge quantities of maize seeds to the farmers. I would therefore like to ask the government to continue with the program which was modelled in a way that allows participation of companies that trade in seeds. Through this program farmers are also given a wide choice of seeds,” he said.

Nyama said STAM works with government in many fronts and said that the association hopes that the existing partnership between the two parties will continue so that together they can promote and take agriculture to higher levels.

Taking his turn, agricultural extension coordinator for Mikundi Extension Planning Area (EPA), Eliya Denis, said the field day helped farmers to appreciate and select best seed varieties that can do better in their localities.

He said the field day was a welcome development and that his office encourages such activities.

“I understand that Malawi is not spared from climate change. So we emphasize much on demonstrations and also field days for the farmers to select best seeds that can suit a particular area,” he said.

He, however, bemoaned the use of recycled seeds in his area by most farmers, saying the practice negatively affects the volume of their harvests. He also complained that some farmers are duped by some traders who sell to them counterfeit seeds that consequently have a negative bearing on the yields.

“We deal with this practice through advising farmers to use only certified seeds for them to realize higher productivity. There are some traders who sell fake and uncertified seeds to farmers, but I commend government for the job well done in conjunction with STAM to curb the malpractice by putting security features on seed packs to ensure that farmers use certified seeds,” he explained.

One of the farmers who attended the field day, Agatha Siveriyani from Kapalamula Village in the area of Traditional Authority (T/A) Nyoka in the district said, the event was helpful because it was an eye opener to farmers particularly when making decision on the types of seeds they should use in their area.

“In the past, we were just buying seeds without knowing their attributes which consequently affected our yields. The demonstration farm, has helped me to select right seeds and I am expecting more yields this season,” said Siveriyani.

One of the profound hiccups that prevent local farmers from realizing their dream of creating for themselves heaven on earth through farming is their inability to access high-quality farm inputs. Financial and cash flow constraints exacerbate the situation and for local farmers, getting such inputs on credit has tremendous potential to boost their activities. One Acre Fund is working in Malawi to bridge this very gap.

One Acre Fund has been operational in Africa since 2006 and came to Malawi in 2013. The organization is passionate about alleviating local farmers’ plight and therefore allows them to access farm inputs on credit to ease the hurdles they experience. Currently, One Acre Fund is operating in the southern region of Malawi: Zomba, Machinga, Mulanje, Blantyre, Chiradzulu, and Thyolo districts, serving over 62,000 farmers and is planning to expand to other parts of the country as well so that more farmers can benefit from its credit schemes.

One Acre Fund Client Acquisition Lead, Nandi Bwanali said in order to ensure that farmers benefit from their activities, the organization closely follows up with its clients throughout the year with pieces of trainings. According to her, through One Acre Fund’s service, maize farmers are able to improve their yields by up to 50 percent.

Over and above the provision of farm inputs to farmers on credit, One Acre Fund strives to provide farmers with access to alternative profitable markets through its commercialization program. Bwanali elaborated that One Acre Fund facilitates the sale of harvests from farmers at premium prices: providing them with a cut and dry market.

“We ran a trial where we partnered with private buyers to buy eight (8) metric tons of groundnuts and 136 metric tons of paddy rice in 2021, mostly from Zomba and Machinga rice schemes,” Bwanali said.

In a ploy to serve the marginalized, underserved, and rural-based farmers, One Acre Fund concentrates its credit program only on people in rural areas.

“We welcome competition from other organisations that provide credit to farmers because it means that our farmers get the best, most pocket-friendly product and ever-improving service. We try to set ourselves apart by going a step further to provide training and additional extension advice after we provide the inputs on credit,” she mentioned.

The organisation does not only offer inputs on credit but also delivers them to farmers; thereby making their products easily accessible and affordable. She explained that taking the product to the farmers’ doorstep reduces the time that they invest to acquire the inputs as well as ensures timely access to the high-quality inputs.

On guaranteeing that farmers get genuine fertilizer, One Acre Fund only buys from reputed companies, ensuring that each lot or batch of fertilizer comes with the right quality certificates and lab reports. The organization does not have its own brands of products but procures fertilizers which it sells to farmers from national and global suppliers. The organization abides by the relevant standards set by the Malawi Bureau of Standards in order to ensure that there is good stock management and quality checks so that farmers get the best and most cost-effective products.

“We track each lot down to the site so that we know that no ‘outside’ fertilizer has suddenly entered our supply. One Acre Fund stores all fertilizer centrally and then delivers it directly to farmers, meaning that the fertilizer does not pass through many hands – we maintain the chain of custody very tightly, essentially reducing the chances that any counterfeit fertilizer could enter our chain,” she elaborated.

Bwanali added that the organization has a very engaged client base that is supported by its field officers, all of whom are empowered to call ‘Customer Engagement,’ toll-free number immediately if there are any issues.

“We are proud to say that in eight years of operating in Malawi, we have had almost no cases of fertilizer quality problems. This is also a testament to the established manufacturers and suppliers in the Malawi market, most of whom are Fertiliser Association of Malawi (FAM) members,” Bwanali said.

The organization is thankful to its customers for choosing to buy farm inputs from them, out of the other available players on the market. They plan to reach more farmers and bring more impactful products and services to farmers.

One Acre Fund is a non-governmental organization that aims to serve smallholder farmers through the provision of inputs on credit, agricultural training services, market access services, and the provision of high-value trees. Its sole purpose is to help reduce hunger and poverty in the lives of those it serves and to ensure higher levels of resilience among farmers.

Hospitality group Blantyre Hotels plc says it is progressing with preparations to construct a hotel in Lilongwe as part of its expansion plans.

In a summary of audited consolidated and separate financial statements for the fifteen months ended 31st December 2021 signed by Board Chairperson Emily Makuta, the group says it has finalized a subscription agreement and capital raise in respect of a majority portion of the estimated project cost.

Makuta states: “During the year, the project was granted planning permission approval by the Lilongwe City Council to develop the property.”

 “The Malawi Environmental Protection Authority also granted the approval to proceed with the project in accordance with the requirements of the Environmental Authority Act (no 19 of 2017).”

“The project developer is now finalizing the main contractor agreement and planning for site mobilization in fourth quarter of 2022 based on the revised development agreement.”

 The group said it is committed to the implementation of the project, despite challenges caused by the Covid-19 pandemic and the recent devaluation of the local currency.

“The Group is finalizing the planning for its capital raise for the purpose of funding furniture and equipment for the new hotel,” says Makuta.

She also says the first four months of 2022 have started off positively as the group has performed better than projections for both revenues and expenses.

“We will continue to build on this strong momentum,” she says.

Makuta also says the macroeconomic outlook for the next twelve months looks promising as domestic and international travel gradually resumes and with the Government relaxing Covid-19 protocols therefore 2022 will be a year of recovery for the group.

“Our strategy is to drive operational excellence while personalizing the experience for our guests through the Marriot Bonvoy rewards loyalty program which will grow our business and drive profitability. We will continue to deliver excellent food and beverages and also improve efficiency,” she says.

Group revenue for the 15 months amounted to K1.97 billion which was 6% lower than the revenue realized in the 12 months ended 30 September 2020. Hotel occupancy averaged 23% in the period compared to 20% in the previous period. The decrease in revenues was due to the impact of the Covid-19 pandemic. 

Malawi’s largest publicly listed conglomerate Press Corporation Limited (PCL) says it is seeking equity investors to take over its stake in Malawi Telecommunications Limited (MTL).

“The PCL Group has decided to exit MTL and discussions with equity investors in the fixed telephony business are at an advanced stage,” says PCL in its summary of audited results for the year ended December 2021.

Meanwhile, the conglomerate has cast a dark shadow on Malawi’s economy doubting that the country will meet its projected 4.1% Gross Domestic Product (GDP) growth for 2022.

PCL says the invasion of Ukraine by Russia has adversely impacted on the commodity market of petroleum, fertilizer and food products.

In the statement co-signed by Chairman Randson Mwadiwa and Acting CEO Lyton Chithambo, the conglomerate, however, says despite the challenging operating environment, it is geared to continue restructuring the business portfolio so that the momentum gained in 2021 is translated into even better performance for 2022.

Mwadiwa and Chithambo say: “Although the operating environment remains challenging considering the key macroeconomic fundamentals such as inflation, foreign currency depreciation and interest rates, the Group will keep adapting,”.

“The focus of the Group is to expand its portfolio by investing in viable new projects, implementing turn-around strategies in its business and consolidating gains made in the existing restructured and streamlined portfolios.”

They say the Group has made a remarkable performance in 2021 during a tough operating environment when the country was still managing the effects of Covid-19 pandemic related challenges and forex scarcity.

The Group delivered an exceptional performance underlined by a 126% growth in profit after tax to K45.131 billion when compared to K19.974 billion achieved in 2020.

Among its subsidiaries, National Bank of Malawi performed strongly in 2021 as the Bank’s profit after tax grew by 48% to K33.3 billion (2020: K22.5 billion) driven by a K44% increase in net interest and investment income and a 45% growth in non interest income.

“This was a result of the growth in assets, mainly the loan book which grew by 20% and Government securities by 63%,” states Mwadiwa and Chithambo.

The telecommunications segment, which comprises mobile phone company; TNM, and the fixed telephony and broad band company; MTL, also performed strongly with the segment registering a 54% growth in its profit after tax of K8.3 billion (2020: K5.4 billion).

TNM registered a profitability growth of 24%, thus signalizing the potency of the various recovery initiatives put in place, while MTL on the other hand reported a significant improvement in its results driven by improved gross margins and cost containment, which resulted in a loss reduction of 46% from prior year. The PCL Group has decided to exit MTL and discussions with equity investors in the fixed telephony business are at an advanced stage.

As world business is becoming more digital, different enterprises in Malawi including the civil society are also embracing automation to improve productivity and sustainability. 

Glue Up, is a global software company with offices based in South Africa. It specializes in providing member-based organizations with digital solutions focused on automation and engagement. The company is offering to bridge the divide by providing solutions that are already integrated and tested so that customers benefit more. 

Itumeleng Selowa, a Sales Development Representative at Glue Up says the company has merged automation solutions and digitalization applications to enable different tools that most organizations use every day to communicate and interact with each other. These integrations will make work easier for staff and give members better digital experiences. 

“We have an all-in-one platform, which has proven to be the easiest way to cost-effectively retain, engage, grow, and build institutions’ beneficiary communities. This is achieved by consolidating the best event management, membership management, community engagement, email marketing, CRM, finance, analytics, tasks, and mobile apps on one easy-to-use platform,” says Selowa. 

The membership management ecosystem helps in identifying outstanding membership payments and sends renewal reminders through automated emails and push notifications. Selowa says the platform also has an application that promotes an institution’s public events by sharing them via email campaigns and on social media. 

“We also make it easy for community members to find like-minded people and topics that matter to them so they can network with each other and exchange their opinions,” she adds as she points out that Glue Up also includes a community engagement module that connects members to the organization and to each other. 

“The ‘My Glue’ community engagement module is a database with a member directory, member benefits, member profile, subscription management, community networking and event information,” says the sales rep.

She adds that the community engagement module also provides latest news as well as gives members the opportunity to modify their profiles, register for events, read email campaigns, network, and more. 

Realizing that members may be found in different locations, Glue Up has flexed its finance module by allowing members to pay using their favorite payment methods with full visibility into all their digital transaction history. 

“Automatic invoices and receipts are issued and members are assured of refund where necessary as we have a customizable refund policy,” Selowa points out. 

The Glue Up platform not only offers improved services for members or customers of an organization, it also creates surveys, quizzes, and polls to help organizations measure and understand feedback so that they can improve their services and show members that their opinions are valued. 

The Glue Up application can manage registrations, review member applications, collect payments, make quick edits, and facilitate smooth check-ins onsite to carry out successful events from anywhere. 

Glue Up has a team of customer success experts ready to support new organizations. Glue Up also provides hands-on training to equip organizations with full knowledge of the software.

My Community, My Responsibility (MCMRO), a local civil society group, says that apart from the economic depression being experienced across the world, some of Malawi’s policies contribute to the country’s stagnation as they do not support youth participation by offering conducive business start-up incentives.

The organisation’s director, Brian Khembo, says prohibitive business regulatory requirements frustrates aspiring youths from registering and operating formal businesses in the country.

Khembo told Mining and Trade Review  that MCMR will soon be engaging government to consider revising some business regulatory policies that pose unreasonable challenges to setting up businesses.

He points out that one of the challenges include business certification processes which he says does not support youth economic transformation.

“Young entrepreneurs and youth led organisations in Malawi are finding it difficult to operate in Malawi due to unrealistic lengthy and costly business regulatory processes,” Khembo says noting that the development is retrogressive to fighting the country’s high unemployment levels.

“There are business registration requirements which expect a start-up by an upcoming entrepreneur to possess similar facilities and liquidity with an established entity before getting a business license,” he observes citing challenges encountered by the youth-led businesses that want to enter the financial industry, regulated by the central bank, the Reserve Bank of Malawi. 

Khembo says to tackle some of these challenges, MCMR has launched a project dubbed “youth empowerment and entrepreneurship initiative,” aimed at highlighting youth business obstacles including human rights. 

Meanwhile, as one way of fighting for the economic rights of the youth, MCMRO has proposed for a Solidarity March to show that it stands with young entrepreneurs in Malawi.

Khembo says the march highlight the plight of Kondwani Phiri, CEO of Greenlights Portfolio, who is said to have been dragged to court by the Reserve Bank of Malawi for allegedly operating in the financial sector without a license. 

“We are of the opinion that this is a compliance issue, which the RBM would have just advised,” he opines.

Despite local heavy mineral sands being lauded as superlative due to abundance in mineral content of 13% on average as compared to deposits from other countries, Malawi is yet to reap its benefits as energy and lack of proper transport systems continue to cripple operationalization of Makanjira heavy mineral sands mining project in Mangochi.

The deposit whose exploration started in 2002, was initially pursued by Australian engineering company Millennium Mining before Chinese firm MAWEI Mining took over and conducted feasibility studies from 2009 to November 2017 when it obtained the mining licence.

But PRO for the Ministry of Mining Christopher Banda told Mining & Trade Review that despite obtaining the mining license the company is yet to commence mining operations due to challenges in sourcing adequate power and lack of proper transportation models to ferry the minerals to the seaports for export to the world market.

Banda explained that initially the company planned to start mining in either late 2019 or early 2020 as it hoped the power and transportation woes would be sorted out by that time.

The company requires approximately 3MW to kick-start the project and 10MW for the rest of the mine life, and there is also a need to operationalize lake transport services from Makanjira to Chipoka to connect to the railway to Nacala for exporting.

Banda said: “MAWEI Mining obtained the mining license in 2017 but then in the year, they did not complete their environmental impact assessment report until last year when they were fully granted the mining license, and when inquired why they remained dormant they cited heavy rains, insufficient power and transportation constraints as key setbacks.”

“Heavy mineral sands have the highest potential to boost revenue generated from local extractive sector as these type of minerals are in a class of ore deposit which is an important source of zirconium, titanium, thorium, tungsten, and rare-earth elements, which are also fairing good on the market.”

Banda, however, stressed that the Ministry will continue monitoring all sector players to revoke and repossess all dormant licenses, and give them to serious investors.

Mawei Mining is expected to inject US$38.8-million in the first phase of the mining venture to run for one to 10-years years where, among others, it will be mining 10mt of ore per year producing Ilmenite ; 215,793 tonnes , Magnetite; 63,600 tonnes, Zirconite; 8300 tonnes and Rutile; 1,100 tonnes.

It is projected to rake in an approximate of US$29.2Million in annual revenue with a profit of US$5.4Million.

The feasibility studies Mawei Mining conducted at the cite affirms the availability of over 354 million tonnes ore containing Ilmenite; 9.48mt, magnetite; 1.648mt, Zirconite; 0.358mt, Rutile; 0,04mt and Monazite 0.017mt.

Information collected from survey reports indicates that Malawi’s heavy mineral sands have an average mineral content of 13%, which is higher compared to 10% for Richards Bay, in South Africa, 4,77% for Hillendale, in South Africa, 4,8% for Dongara, in Australia, 10,4% for Tamil Nadu, in India and 3% for Kwale, in Kenya.

Meanwhile, in a bid to increase electricity supplied against the increased demand for power Malawi President Lazarus Chakwera has engaged the Mozambican power supply company EDM to increase by 60 MW the electricity it will be supplying the country under the Malawi-Mozambique interconnection deal.

If approved, the extra 60MW will add on the initially agreed 50MW, providing the local electricity distributor the Electricity Supply Corporation of Malawi (Escom) an additional 110MW into its grid from the Interconnector.

Malawi’s mineral sector contributes less than one percent to the country’s gross domestic product with a number of medium to large scale mining projects failing to take off or realise their full potential due to a myriad of problems including power challenges, lack of adequate transport infrastructure and delays by authorities in approving mineral licenses and environmental impact assessment reports.

ILLOVO Sugar Malawi says it expects that medium-term agricultural operations and yields will improve following recovery from the impact of Cyclone Ana.

It, however, says in the short term reduced power supply from Electricity Generation Company (EGENCO), following the damage to Kapichira Hydro-Electric plant is anticipated to adversely impact operations.

In its unaudited financial statements for the six months ended 28 February 2022 co-signed by MD Lekani Katandula and Chairman Gavin Dalgleish, the leading sugar producer says a return to better weather patterns and the benefits of drip irrigation are expected to further support the agricultural yield improvement programs.

Katandula and Dalgleish state: “It is expected that medium-term agricultural operations and yields will improve following recovery from the impact of the cyclone. In the short term, reduced power supply from EGENCO following the damage to Kapichira Hydro-Electric Power Plant is anticipated to adversely impact operations.”

“However, a return to better weather patterns and the benefits of drip irrigation are expected to further support the agricultural yield improvement programs. Following the successful off crop maintenance program, additional focus on optimal factory recovery and preventive maintenance should enable both plants achieve better throughput for the rest of the year.”

Illovo sugar also says Inflation, bank interest rates and exchange rates for the Malawi Kwacha against major trading currencies will continue to have a notable impact on profitability for its business.

Katandula and Dalgleish, nonetheless, say the Group will continue to apply significant effort at cost reduction, operational efficiency, and sales growth in the interest of continued increase in profitability and a marked contribution to a thriving Malawian community.

 “The business will continue to invest in commercial and logistical operations through commendable product and service quality, direct delivery of sugar to the end consumer, refinement of approaches to the very challenging deep water and other export markets, marketing promotions and other sales activation initiatives as it tries to maximize value for all its stakeholders.”