Mining & Trade News

The role of the military in mining sector in many countries has been primarily seen as a means of securitization of the artisanal and small-scale mining sector. In many cases, the military have been used as part of state-led efforts to prevent informal mining and smuggling of minerals. In a bigger picture worldwide, military has been used to span mine clearance, for tactical purposes and for humanitarian demining, providing security for mining sites, and manage valuable mineral resources. In other countries, former military personnel also transition into civilian mining roles thereby bringing valuable skills to the industry.  All in all, the main task of a military is usually defined as defence of the state and its interests against external armed threats.

1.Selected cases of Tanzania, Ghana and Malawi

Military involvement in mining can also be viewed as part of broader strategies of the state to promote industrialization, through state-owned enterprises (SOE). An example in Tanzania is that involvement of military in mining coincided with a government turn towards resource nationalism. In Tanzania, there are theoretical frameworks that are based on three elements; securitization of the mining sector, the nature of civil–military relations, and the nature of military involvement in the mining sector. There is a direct and official involvement of military actors in mining production activities during peacetime; for example, in managing mining activities at extraction sites, providing security in and around mines, and participation in governance institutions in the mining sector. However, there have been military involvement in mining which coincided with a government turn towards resource nationalism, and that military involvement was linked to discourses and practices in Tanzania. Thus, the military is involved in direct and official involvement of military actors in mining production activities during peacetime; for example, in managing mining activities at extraction sites, providing security in and around mines, and participation in governance institutions in the mining sector.

In Ghana the government took an effort to eliminate unlicensed artisanal and small-scale mining (ASM) popularly referred to as ‘galamsey’. At a time when donors and other governments in sub-Saharan Africa are working diligently to identify ways to formalize ASM and to integrate the sector into broader economic and rural development frameworks, the government of Ghana turned to its military and police to combat illegal activity. The result was alleged military brutalities against illegal gold miners and malicious destruction of confiscated excavators and other mining equipment that became very common. Footage of such excesses by the military was on many occasions captured on videos and shown on national television. Yet, despite the aggressive posture of the military to combat these illegal activities, the country has rather witnessed a surge in the phenomenon.

In Malawi, the military's primary role in mining is security and enforcement, specifically to combat illegal mining and protect mineral resources from smuggling. While there have been calls to deploy the Malawi Defence Force to establish camps and control illegal activities, mining experts have the view that this approach should be balanced with effective civilian management. This was a reaction to where in some cases previously, the military had been involved in raids and crackdowns on illegal mining sites, such as Namizimu Forest in Mangochi District. To avoid such actions, the Malawi government initiated the signing of an MOU in 2023 that was expected to enhance security of the mining industry from the illegal miners and also ease smuggling of minerals and gemstones. At the signing of this MOU, the Ministries of Mining and Defence agreed to promote and safeguard mines. Malawians were the assured that the military will carry out joint activities with Ministry of Mining in safeguarding minerals by curbing illegal mining and help to enforce sustainable mining practices from both artisan and large-scale miners.

2. What should the Malawi government do?

•  Provide the Military with the required resources, training and operational independence devoid of any form of political interference to safeguard the minerals.   
• Involve residents within local mining communities affected by ASM activities to cooperate in providing the military with timely information on these activities. 
• Initiate cooperation and coordination among all the relevant stakeholders in the mining sector although in many contexts, local military forces are reluctant to accept coordination or instruction from a civilian authority 
• Of late, the active participation of some foreign nationals in Malawi, particularly Chinese operators especially in the gold mining sector has turned ASM activities into highly organized groups who are equipped with mechanised and efficient mining equipment and various weapons to safeguard their activities. As a result, there is need to closely monitor environmental impacts to the surrounding communities. This must be checked and the military should work hand in hand with the communities. 
• Engage the military in strategic resource nationalism process in future.

Abstract:

Ilmenite and rutile are a source of titanium pigment and titanium metal. These minerals exist as saprolite metamorphic rocks, placer deposits in alluvial environments and beaches and as float or pods and veins in basement anorthosite. These minerals have potential to transform the economy of Malawi through mining and processing to value added products.  

1.0 Ilmenite and Rutile

Ilmenite is a mineral composed of titanium dioxide and iron (FeTiO3) while Rutile is made up of titanium dioxide (TiO2). These minerals occur in igneous and metamorphic rocks. They are a primary source of titanium dioxide pigment mainly used in the production of paints, plastics, paper products and for formulating sunscreens that block harmful UV rays.  

Most ilmenite in Malawi accumulates as heavy mineral sands during stream transport and wave action along lake beaches. Ilmenite can be converted into pigment grade or synthetic rutile via either sulfate process or chloride process. Ilmenite can also be smelted to produce liquid iron and a titanium-rich slag. Rutile often appears as small needles quartz and gem stones giving asterism or cat’s eye effect. The high dispersion of rutile allows it to break up white light into multi-colored points, further enhancing its optical allure.

2.0 Occurrence

Rutile is commonly found in igneous and metamorphic rocks, often alongside other minerals such as quartz and feldspar.   . It often appears in varying reddish to brownish translucent colours.  

The paragneiss of Kasiya area hosts a weathering profile of rutile mineralisation in extensive, shallow, blanket-like formations popularly known as saprolite.  

The Kasiya rutile project will use hydro mining technic and the slurry material from the pits will undergo processing at the wet plant where the cyclones and up-current classifiers will be employed to eliminate fine particles smaller than 45µm. The heavy mineral concentrate (HMC) will be isolated using both coarse and fine spiral circuits to produce coarse and fine gravity tailings enriched with graphite. The graphite will be recovered through combined gravity separation of tailings using froth flotation, which will include polishing and the use of stirred media mills.

Tengani rutile/ilmenite project in Nsanje contains a combination of rutile and ilmenite with ilmenite in great abundance. The rutile/ilmenite deposit exist in form of place deposit derived from adjacent anorthositic rocks and as an ore in the Basement Complex anorthositic rocks.   In the basement anorthositic rock, the ilmenite appears to exist in an intergrowth with rutile, surrounded by very abundant strongly fractured reddish-brown almandine garnet (Viv Stuart Willams, 2021). This is a common occurrence of the alluvial rutile/ilmenite deposit within the alluvial plain. Further research is required into less cost production of TiO2 product.

Makanjira Heavy Mineral Sands is a weathered eluvial layer of Precambrian gneiss containing garnet hornblende biotite. The beach placer is a loose yellow medium sand containing titanium– zirconium. Its particle size varies from 0.1 to 0.5 mm. Ilmenite and zirconite are the main constituents occurring in 0.07 - 0.30 mm size fraction and 0.07 - 0.18 mm size fraction respectively. The mud content has an average value of 0.89%. The ilmenite will be recovered through a combination of gravity, magnetic and electric separation. Lake Chilwa Heavy Mineral Sands consist of beach and dune deposits that were deposited and preserved through several cycles of lake level fluctuations.  

The main HM deposits are located on a very distinct strandline where the conditions of sediment supply, lake level, and hydrological were favourable for the formation and preservation of the sand deposits.  

Sediments, including HMs, were eroded and supplied by several streams and rivers flowing into the lake from surrounding basement gneiss and alkaline intrusion complexes.  

The HM characteristics of each deposit are determined by the proven rock types. Some deposits have local point sources contributing to the HM assemblage.

3.0 Uses of Ilmenite and Rutile

Titanium is critical for industries like aerospace, defense, and renewables. Due to its semiconductor properties, smaller wavelength (<400 nm), high refractive indices, high birefringence and high dispeion make it a raw material for production of certain critical optical elements. Titanium dioxide can be used as a cellulose that covers welding electrodes.   When converted into a metal it is used in aerospace, automotive, electronics industries, and medical devices.  

4.0 Resource Estimate

Sovereign Metals has come up with a mineral resource of broad and contiguous zones of highgrade rutile and graphite across a very large area of over 201km2 within a 15-meter depth of saprolite material. A resource of 17.0 million tonnes of rutile was estimated to exist. The ore contains an average grade of 1.0% rutile. Makanjira Heavy Mineral Sands consist mainly of ilmenite and zirconite with the ore body floor composing a weathered eluvial layer of Precambrian gneiss containing garnet hornblende biotite. The Makanjila titanium-zirconium placers consist of a reserve totaling 367.5869 million tons of which Ilmenite is 9763.676 thousand tons (average grade 42.39kg/m3).  

Crown Minerals estimates that the Tengani EPL contains 1.6 million tonnes of rutile. Most of the rutile is inter twinned with 7.2 million tonnes of ilmenite which calls for the use of Ortech Technology to take the titanium into solution and then recover Ti from the solutions. .  

The Nkhotakota- Augustino stretch along the western shore of Lake Malawi contains an inferred resource of 18.0 million tonnes at 3.7% ilmenite.  

Crown Minerals Ltd has observed pods and thin veins as a common type of mineralization in the anorthosite body. This is the main source of alluvial and eluvial ilmenite/rutile at Tengani.  

The Lake Chilwa beach placer is proving to have a large deposit of ilmenite. Chilwa Minerals has come up with an Inferred Resource of 61.6Mt at 3.9 % THM.  

A recent investigation by Crown Minerals on the basement anorthosite has shown that it hosts abundant titanium mineralization in the basal units of the complex. This mineralization has been observed in an area of 11 Km2. An inferred resource of 3.3 Mt has been estimated using a density of 1 Kg/m3 within a depth of 0.3 m. More work is required to prove that this can be another world class deposit of titanium mineralisation.  

5.0 Value addition

High-temperature chemical reaction is required to transform ilmenite and rutile into titanium dioxide (TiO2). Coal and chlorine gas are used in a fluidized bed to transform ilmenite and rutile into TiO2. Regulated high-temperature of about 1000 0C is used to turn titanium ore and chlorine gas into titanium tetrachloride, known as TiCl4. Hydrolysis and Oxidation turns TiCl4 into TiO2.  

Malawi has the potential to smelt ilmenite and rutile to form titanium oxide slag and pig iron. The titanium slag or pig iron can be converted into titanium pigment using chloride process in combination with salt and cheap power.  

Titanium metal is produced through the Kroll process, where it's reduced with magnesium.  

Mining is a lucrative business such that many large, medium, small, junior companies and new investors are drawn towards mining all over the world. As a result, they may incur huge profits and expanding market share that are further reported in Stock Exchange markets. Some mining companies start very well but end up in misery because some elements of mining as a successful business were over/underestimated. A good and significant estimation calls for mining business opportunities that can be started in the nearest future.

Mining   Business   requires   concerted   efforts,   commitment,   passion   coupled   with continuous   detailed investigations to make informed decisions on whether to proceed with the business or not. One may end up spending billions of money/ dollars on a tenement only to discover that there is  nothing on the ground. Be careful here!!! The following are some crucial elements that can be considered before venturing into a successful mining business:  

1.Mining Business Commitment

Mining business being complex, calls for processes that must be taken including but not limited to Decision   Making,   Mineral   Discovery,   Mineral   Evaluation,   Acquisition,   Excavation/Mining, Processing,   Marketing,   Manufacturing,Mine   Closure and Rehabilitation.   This   is sometimes referred to as the Mining Value Chain and one is reminded to know exactly where he is along the chain and will make decisions on how far to go in future. The next step is to check out whether the investor has the vision, passion, perseverance, finance and time to pursue mining business seriously. Other investors are on trial and error basis and this risks the business. Mining is not for the faint hearted.

2. Decision on which mineral to Explore or Mine

The earths’ crust is rich in mineral resources and only but a few are extracted for industrial use. Depending on the vision, financial potential and present stage in the mining value chain, the investor  can choose  which  minerals/metals to  extract. It   is advisable   for the  investor or  the company to choose a mineral that has a good market demand presently and beyond but should not be exhaustive in the shortest time possible. The issue of evolving industries and the driving commodities must also carefully be considered here as well .    

3. Decision on Mining Business

As an investor or a company into mining, there is need to think if there is a possibility of being successful in Discovering,Evaluation,Acquisition,Excavation/Mining and Processing, Market or Manufacturing of a chosen mineral. The company/investor must be capable of meeting costs of the chosen stage and the potential risks associated at each stage of the process.    

4. Choice of the area to mine

Minerals are found across all over the continents. To start a mining business, a geographical location of an area is  important. The choice should be based on country specific mining legislations, flexibility/ease of doing business, logistics, human capital or manpower resources, infrastructure, Energy/power, security, supply chain and marketability of end products. Considerations should also be based on whether the mining business is within the country/ continent or overseas.

5. Choice (Greenfield or Brownfield)

Mining Business ventures can either be classified as Greenfield or Brownfield. Greenfield ventures are unexplored, as a result they are cheaper to acquire as they can hardly have any previous investments.   Brownfield   ventures  are already explored, mined where investment was previiusly done and  requires   thorough   due   diligence   to   ascertain   the   mineral potential   and   hence   expensive   and   time   consuming   but   can   smartly   and   quickly   generate revenues.  

6. Acquisition/Partnership/Joint  

Mining  businesses   may   be  purchased,   acquired   or   worked   through partnerships. It all depends on the choice of the investor whether to engage a partner or run it sole. It must be noted that acquisition is driven depending on the mining laws of a specific country while partnership may be based on equity or on profit sharing. The investor is encouraged to study all these options to come up with a viable decision.

7. Due Diligence

Any high value commodity should be studied, carefully assessed and looked at if it is going to generate income by bringing profits. This is the same with minerals in a mining business. Mineral prospects are mostly lying unexplored underground. Sometimes acquisitions tend to be overrated in terms of pricing and partnership terms are written beautifully to attract investors.. Therefore site visits and due diligence must be conducted to evaluate the mining business opportunities to get a reasonably fair idea as to what the investor is getting into. A highly competent team of consultants must be engaged to carry out the Due Diligence Process and also some research is required. In this way, investment could significantly be saved from future risks.  

8. Budgeting and Financing

To achieve a successful mining business it is better and important to seek advice from geology,mining, mineral evaluation experts before clicking the business. Preparations of budget plans, financial capability/stand and development of a budget are of utmost significance to take care of expenses on   site   visits,   consultanting   fee,   data   analyses   and   document   purchase,   exploration,  and  mining.

All in all what the investor/company needs to do is to start and take steps to turn the mining business 

Abstract

The mining sector has a tremendous potential to create wealth for the country and create economic linkages that will boost urbanization and the development of commercial agriculture. There is need to introduce effective economic infrastructure and governance systems that resonate with all stakeholders. Quick wins are in the development of uranium, niobium, rare earths, rutile and graphite.

1.0  INTRODUCTION

Malawi Vision 2063 states that “Mining has tremendous potential to  develop and support the inclusive wealth creation agenda”.   This is through three pillars that are in this paper.  These are Agriculture Productivity and Commercialisation, Industrialisation including Mining, and Urbanisation including Tourism.

The author believes that under

Pillar 1, Agriculture Productivity and Commercialisation, mining can provide a market for agriculture products to feed the mines through technical and financial support to cooperative farming in food crops, livestock, and fisheries production. Rock phosphate is available for extraction and for the production of phosphoric acid.

Pillar 2, Industrialisation through Mining, offers an opportunity for mineral value addition, research, science, and innovation. There is an opportunity to export highvalue mineral products such as uranium, niobium, rare earths, graphite, and titanium (rutile/ilmenite). There will be massive direct and indirect job creation and foreign reserve generation (wealth creation).

Pillar 3, Urbanisation including Tourism, will benefit from the creation of mine towns and cities with improved health, education, and reticulated water facilities. The towns and cities will also trigger high consumption of agricultural products. Urbanization will increase demand for industrial minerals such as cement, sand and aggregate, iron and steel, and ceramic clays.  

2.0  ENABLERS OF THIS TRANSFORMATIONAL AGENDA

The above scenario can be achieved in the medium to long term if the following enablers are prioritized and given special attention.     

2.1   Economic Infrastructure

Provision of modern transportation links such as tarred roads and rail lines, electricity, and financing mechanisms through development finance will go a long way towards speeding up the development of the mining sector.     

Transport infrastructure

Mineral resource endowment is spread throughout the whole country. There is a need to develop cheaper transport modes such as lake services and rail linkage to Monkey Bay Port. Chilumba and Nkhata Bay ports need to be rehabilitated. Migowi –Nambazo, Migowi – Songwe, Mangochi – Makanjira, Likuni – Malingunde, Makawa – Njereza, Chitipa Junction – Kayelekera, Kasungu – Chikowa, and Chamono – Kanyika roads need to be upgraded to provide easy transportation of mineral products.      

Electricity Connectivity

Provision of electricity for mine development is a backbone for mineral development. EGENCO has a total installed generation capacity of 441.95MW, with 390.55MW from hydro power plants and 51.4MW from thermal power plants.  The mining sector requires about 500MW in the medium term, and this is posing a big challenge for mine development. This energy demand is required by 2025. Efforts for regional power interconnection, thermal power development and green energy production are recommended.        

Financing Mechanism

The realization of wealth creation from mining requires long term financing instruments. On average projects earmarked to kickstart the wealth creation agenda for the country require a capital of US$ 200 million per project. This will need long term financing instruments of loan payback period of between 3 and 6 years. There is need to establish a Development Finance Institution (DFI) with credible lines of credit and State-Owned Enterprise (SOE) to manage state equity and diversification of mature projects to Malawians.  

Key players that should finance the sector include Malawi Agriculture and Industrial Investment Corporation (MAIIC), Standard Bank, FDH Bank, National Bank and yet to be recommissioned Malawi Development Bank. We need to understand that apart from monetary gains from mining, there are also other benefits such as urbanization, job creation and economic infrastructure and social services.   

 2.2  Effective Governance Systems

The mineral sector in Malawi faces a negative public perception on how it is governed and how government has arranged its fiscal regime. There is need to relook at the mining legal framework to be relevant with private sector growth and bring about institutional transformation and restructuring that brings efficiency and transparency in the management of revenue from the mining sector.      

Community engagement

Public perception shows that government has no capacity and human resources to govern and monitor what is happening in the minerals sector. As a result, it is losing revenue through smuggling of minerals and illicit financial flows. This needs to be corrected. There is a formal sector and informal sector.  The formal sector is made up of exploration companies and industrial minerals mining companies. Exploration companies have been sending samples for analysis to accredited laboratories. This has been viewed as exporting mined minerals in the name of samples. Companies mining industrial minerals such as coal, limestone and aggregate are doing it in a formal setting and reporting their production and revenue to Ministry of Mining and Malawi Revenue Authority.  We now need civic education to prove to the nation that these samples are necessary and have put Malawi on the map in discovering high value minerals such as uranium, niobium, rare earths, graphite and rutile.

The informal mining sector is made up of artisanal and small-scale miners (ASM). These are mining gemstones and gold. These are characterized by smuggling and social decay and illicit financial flows. Unfortunately, their activities are denting the whole mineral sector.  Government needs to come out to explain what is happening and how it is going to deal with this sector in terms of formalization, support to training, financing, and marketing.    

We need to protect our exploration companies from undue criticisms and apathy. The hold the key to wealth creation for the country.    

Fiscal regime

The fiscal regime determines how the revenues from mining projects are shared between the government and companies. Fiscal tools are used to create a fiscal regime to govern mining projects. These tools include fees and taxes are in form of royalties, income tax, resource rent tax, withholding tax on dividend and interest, import duty, VAT and state equity. In order to foster equitable benefit to government and the resource company, there is a need to come up with an exclusive taxation act that also be backed up by a customs procedure code that is exclusive to mining. Any fiscal item capping needs to be removed from the Mines and Minerals Act in order to be flexible in coming up with equitable benefit sharing.

In totality, the total government revenue should not exceed total investor revenue as this will attractive the investor to invest in mining as he bears the risks associated with mining.      

Mindset change

This is a serious issue in Malawi. The public thinks resource companies are rich and smugglers. These are a group of risk taker businessmen who mobilise capital from syndicated banks and stock exchanges. They create jobs, stimulate economic linkages and bring skills development and technology. Let’s engage them on evidence-based issues not speculation. There are laws and regulations that spell out offences and penalties.  

Let’s promote positive thinking to develop the mining industry. 

3.0  PRIORITY PROJECTS

Recent and current exploration activities place two groups of mineral projects that can take off within the next three years. These are for export and import substitution. Export and valuable projects include Kayelekera uranium, Kanyika niobium, Kasiya rutile and graphite while those for import substitution include cement, coal, iron and steel, glass sand and ceramic clays. Import substation minerals will play a big role in promoting growth of towns and cities.  

4.0 STIMULANTS FOR FAST TRACKING MINING CONTRIBUTION    

TO WEALTH CREATION

The following interventions need to be undertaken with speed and patriotism to get out of the current economic mess:

• Mineral Development Agreements require a short consultative process not exceed six months. This helps to take advantage commodity price increase.
• Special consideration is required to speed up mine development agreements (MDA) through cabinet and parliament. There is need to fasttrack the of Niobium, Rare Earths, Uranium, Graphite, Rutile and Heavy Sands to boost wealth creation.
• Community engagement through social contracts (community development agreements) is key to building trust between resource companies and beneficiary communities. Periodic consultation with the community is key to foster good coexistence.
• Initial exploration programs do not significantly impact on the environment. These are restricted to pitting and trenching, therefore need to be exempted from rigorous environmental and social impact assessments (ESIA) as they delay mineral deposit discovery and increase risk capital that would be used in future for from pre-feasibility study level.    

5.0 KEYS PLAYERS IN THE IMPLEMENTATION OF THIS INITIATIVE  

Ministries, Departments and Agencies

For the mining sector to contribute to wealth creation in the shortest time possible there is need to respond positively in terms of building positive relationship between government, the public and resource companies. The key players are the Ministry of Mining, the Ministry of Finance and Economic Planning, Ministry of Trade and Industry and Malawi Revenue Authority. These need to come up with a fiscal regime that offers equitable economic and financial benefit sharing.     

Private Sector

The keys players for making this vison to be realized and effective are resource companies, formalized ASMs in form of Cooperatives and Development Finance Institutions. Offshore financing can be leveraged though local banks through management of lines of credit. This is possible with Standard Bank, National Bank, First Capital bank and New Building Society bank.     

Academia

The role of academia and research institutions is crucial in providing relevant skills and technology necessary to sustain the development of the minerals sector. Academic and research institutions should build partnership with the private sector through internship and opportunities for collaboration with academic institutions in solving the industry’s problem using undergraduate and postgraduate students during their research assignments. Possible collaboration partners in this area are Malawi University of Business Applied Sciences, Malawi University of Science and Technology, and University of Malawi. Research Institutions involved soil science and geotechnical studies are key to provide solutions in various stages of mineral development.  

Development of high value mines are possible through building Public Private Partnerships (PPP) and building trust between stakeholders in mining. These include government, resource companies and the public. Promoting value addition in partnership with private sector and academia will build strong economic linkages for job creation.  

6.0 CONCLUSION  

Mining offers great opportunity to industrialize the country and promote urbanization. Through mining, countries create wealth and skills necessary to bring technological innovations. Job creation and improvement of goods and services in the agriculture sector get boosted.  

Collective effort to support this sector will promote good governance, economic growth, economic linkages, development of economic infrastructure and favourable macroeconomic conditions that will bring confidence to the private sector and the country’s citizens.  

The country needs to unite for a purpose of graduating from poverty to prosperity. Let us all bring the change that all we need to be in. 

Malawi is endowed with a vast mineral resource base. Most of the areas are being explored for various minerals including the critical minerals, rare earths, HMS (Heavy Mineral Sands), coal, gold, precious and semi-precious minerals(gemstones), dimension stone, rutile, graphite, niobium, uranium, bauxite, limestone,  just to mention but a few. Malawi has witnessed an influx of exploration and mining companies scrambling for these minerals.

There have been Mining Development Agreements (MDAs), Community Development Agreements (CDAs) signed and of late Lindian (an Australian mining entity) is carrying out construction in Balaka district ready to start mining  rare earths. Other developments that are of interest to note are the establishment of Malawi Mining Investment Company (MAMICO), a state-owned mining enterprise and Mining and Minerals Regulatory Authority (MMRA). All these developments have progressively been implemented and it is anticipated that the coming in of the new government shall foster such initiatives and also continue bringing and leveraging new insights into mining operations, activities and ventures. 

1. What does the Mining Sector expect from the new government?

While admitting that there have been positive and negative impacts arising from implementation of mining activities and interventions, it must be noted that the positive impacts are the ones that can shape and bring the economic base to achievable limits. The new government must at all cost aim at addressing some challenges in the mining sector by bringing sanity.

The following are expectations to the new government regarding the mining sector development:

•  Continuation of the Ministry of Mining as a standalone Ministry. This is because there are a lot of developments taking shape in the sector including opening of mining and metals production companies. These are anticipated lato change the country’s economic landscape  including increasing the Gross Domestic Product. 
• Facilitate formalization of Artisanal and Small-Scale Miners (ASMs). To integrate into the formal economy, the government should create legal frameworks and support systems to help illegal and small-scale miners meet legal requirements. The government facilitates  formalization of ASMs but nothing much is done on the ground. The reasons include lack of capacity building, limited funding, among others.
• Allocate more funding to the mining Ministry and institutions. These institutions include the Geological Survey, MMRA and MAMICO. Pumping more funds to these entities will boost mining activities and governance in the country. Due to underfunding of these entities, there is a slow pace at which the mining sector is transforming. The new government must embrace the culture of funding the mining sector to make things happen.
• The Government should come up with interventions to promote value addition and beneficiation of the mineral resources with the view to create higher-value products, increase exports, create more jobs and drive industrialization and diversification.
• Urgently lift the ban that was imposed in February 2025 on gemstone exports. This ban has affected the economy of the country by increasing forex shortage, facilitated gemstone smuggling, affected people’s livelihoods who depend on these gemstones as a means of income and revenue base of the government has also been affected.

2. What should the government do on illegal Gold Mining?

There is a proliferation of gold mining hotspots in the country. Almost in every district, gold has been discovered by ASMs and is being mined illegally. Combating illegal gold mining requires a multifaceted approach, including formalizing artisanal and small-scale mining (ASM) to integrate into the legal economy, strengthening regulatory and enforcement mechanisms through improved legislation and oversight, and leveraging monitoring using modern technology such as drones. The government needs to come in to sensitize these groups on the importance of licensing.  ASMs must also be encouraged to form partnerships in form of cooperatives. Offering grants or low-interest loans to encourage cooperatives formation can improve safety and operational standards of mining activities. The government must also facilitate designation of gold mining hotspots as formal areas and must be well mapped and monitored by the government.

3. Impact of law enforcement on illegal Gold Mining

In the context of illegal gold mining, law enforcement must not only focus on punishing offenders but also addressing the underlying socio-economic conditions that drive individuals into illegal gold mining activities. Many small-scale miners turn to illegal mining due to poverty, lack of employment opportunities, and limited access to formal mining permits. Without viable economic alternatives, enforcement actions such as arrests may not necessarily solve the problem and may also be liable to harm marginalized communities leading to increased poverty and social unrest. To align with sustainable development principles, enforcement efforts should include a focus on poverty reduction and the provision of alternative sources of livelihoods.

Federation of Artisanal and Small Scale Miners (FASMM) President Percy Maleta conducted an educational visit to Tanzania’s small scale gold mines. Mining & Trade Review’s Tawonga Nyirenda Mayuni engaged Maleta to find out what he learnt from the visit. Excepts

• What were the primary objectives of your educational visit to Tanzania’s small scale gold mining sites?

The main objective was to learn from Tanzania’s successful approach to formalizing and empowering the artisanal and small-scale mining (ASM) subsector. Tanzania has established strong institutional frameworks, including cooperatives and partnerships between government, miners, and private investors. For us in Malawi, this visit aimed to draw lessons on how to organize, regulate, and commercialize ASM operations to ensure miners benefit fairly from their work while contributing meaningfully to the national economy.

• What key insights or knowledge have you gained from this visit so far?

We have learnt that structured organization, policy consistency, and supportive infrastructure are key to ASM success. In Tanzania, the presence of gold trading centres, mineral associations, and strong collaboration with the Central Bank ensures transparency and better pricing for miners. We have also seen the power of value addition and local beneficiation, where miners do not just extract but also process and refine their minerals locally.

• In what way does this experience support the development of Malawi’s ASM subsector?

This visit provides us with a practical roadmap to improve our own ASM ecosystem. We have seen how decentralization of licensing, creation of mineral markets, and technical support can uplift small-scale miners from survivalist activities to sustainable enterprises. These lessons will help FASMM engage policymakers and advocate for a more enabling environment for ASM operations in Malawi.

• How important is regional knowledge sharing and capacity building among artisanal miners across neighbouring countries?

It is extremely important. Our challenges in ASM are similar—lack of access to finance, equipment, markets, and technical expertise. Regional collaboration allows us to exchange ideas, technologies, and solutions that have already worked elsewhere. It also builds solidarity among miners, ensuring we grow together as a region rather than in isolation.

•  How can exposure to international mining exhibitions and interactions with officials benefit Malawian miners?

Such exposure opens up new possibilities. Our miners can learn about emerging technologies, safer mining practices, and access to markets beyond our borders. Interacting with officials and experts helps build networks for investment and technical support. It also boosts confidence among our miners, showing them that they are part of a global industry with real opportunities for growth.

• During your visit, you met Tanzanian officials from the Ministry responsible for mining and gold dealers. What specific outcomes or collaborations did you  achieve through these engagements?

We hope to establish partnerships for training, mentorship, and knowledge exchange. We also aim to explore possibilities of linking our miners to established gold dealers and refineries in Tanzania for fair trade and better value realization. Furthermore, we want to harmonize cross-border trade policies to make it easier for ASM operators to benefit legally and transparently from regional markets.

• Are there particular policies, practices, or technological approaches from Tanzania that Malawi could consider adopting?

Yes, several. Tanzania’s establishment of Mineral Trading Centers is a game changer—we would like to replicate that model to reduce smuggling and increase local revenue. Also, their cooperative model, where small miners work under registered associations with shared equipment and government support, is something Malawi can adopt. On the technology side, Tanzania’s small-scale gold processing facilities and mercury-free recovery systems are worth introducing in Malawi.

• In your opinion, how can mining exhibitions and international interactions foster partnerships, facilitate technology transfer, and improve market access for artisanal miners?

Exhibitions create direct linkages between miners, equipment suppliers, financiers, and buyers. They expose our miners to innovations that make mining safer, cleaner, and more productive. Through these events, we can attract investment into Malawi’s ASM sector, build partnerships for training, and open pathways for our gemstones and gold to reach fair international markets.

• Are there specific innovations or technological advancements you were interested in exploring during this tour?

Yes, we are particularly interested in small-scale processing technologies that are environmentally friendly, such as mercury-free gold recovery systems, and affordable gemstone cutting and polishing machines. We also want to understand how Tanzania has integrated digital systems in licensing and mineral traceability, which enhances transparency and market confidence.

• How do you envision regional cooperation among Malawi, Tanzania, and other neighboring countries strengthening artisanal mining industries?

Regional cooperation can create a powerful block of shared knowledge, fair trade, and stronger bargaining power in global markets. By aligning our mining policies, sharing geological data, and standardizing pricing mechanisms, we can protect the interests of small miners and ensure they benefit fully from their labor. It can also reduce illegal cross-border trading and promote responsible sourcing.

• What strategies or steps can be implemented to enhance cross-border collaboration and facilitate effective information exchange?

We propose creating a regional ASM platform or network for continuous dialogue among miners’ associations, ministries, and the private sector. Joint training programs, exchange visits, and shared research can enhance learning. Governments can also formalize bilateral agreements to support legal trade, harmonize taxes, and simplify procedures for small miners moving goods or equipment across borders

1. Introduction

Human societies have always depended on minerals for their survival and development. From the Stone Age to the Industrial Revolution and today’s digital economy, each phase of progress has been shaped by the minerals it relied upon. What has changed is not the importance of minerals, but which minerals matter most. In recent decades, a group known as critical minerals has come into sharp focus. Minerals such as rare earths, copper, graphite, and rutile are now needed with global demand expected to double by 2040. Unlike other commodities, CM have supply chains that are geographically concentrated, technically complex, and politically sensitive, making them strategic assets increasingly influenced by geo-politics rather than market forces alone. As major economies move quickly to secure these minerals and setting up well documented strategies, attention has turned once again to African countries including Malawi.  Yet, despite its endowment of CM, Malawi has yet to clearly define its role in this global supply chain. Without a deliberate strategy, the country risks repeating the historical pattern where resource wealth fails to translate into lasting economic benefit.

2. What are CM and why have they become strategic

There is no universally accepted definition of CM. In most developed economies, they are defined as minerals that are essential to advanced manufacturing, clean energy technologies, and defense systems, but whose supply chains are vulnerable to disruption. While these minerals often overlap with those used in renewable energy, CM are frequently and incorrectly treated as synonymous with green energy transition minerals. In truth however, CM extend far beyond renewable energy in fact, around 60% of the minerals listed as critical by the European Union and United States have no direct energy-transition use. Their criticality instead lies beyond their importance but more towards their vulnerability to supply chain disruptions. This narrow framing has increasingly been challenged by mineral-producing countries, particularly in Africa, through a simple but important question: critical to whom? Most global critical mineral lists reflect the needs of importing countries, not the development priorities of mineral rich countries. South Africa, for example, has challenged this narrow view by including coal in its list of CM despite its exclusion from most Western lists. Malawi faces a similar situation. Agro-minerals which Malawi imports such as phosphates and potash for fertilizer production hence at the core of food security, and economic stability, are rarely included in global critical mineral discussions. Yet, from a national perspective, these minerals are more critical than some globally prioritised battery minerals.

Two perspectives therefore dominate the CM debate.

2.1 Importing industrial countires  

The risks of concentrated CM supply became evident in 2010, when China imposed an unofficial restriction on rare earth exports to Japan following a maritime dispute near the Senkaku Islands. At the time, China dominated global rare earth supply, and the disruption led to sharp price increases, exposing the vulnerability of narrowly concentrated critical mineral supply chains. It is against this background that import-dependent industrial economies define criticality primarily in terms of supply security, hence driving policies focused on diversification, stockpiling, recycling and strategic partnerships.  

2.2 Resource rich countries

They have increasingly defined criticality by economic opportunity. They are using mineral endowments for long-term economic resilience, job creation and industrialization. This has led to a push on policies that support downstream investments. Several resource-rich countries have moved beyond simply identifying CM to actively shaping how these resources support national development through deliberate policy choices. One thing stands out CM strategies are shaped by national priorities, not one size fits all global templates.

2.2.1 Asia

Indonesia provides one of the clearest examples of how policy can reshape a mineral value chain. By restricting exports of raw nickel ore and implementing a coordinated industrial policy to support domestic processing, Indonesia has successfully promoted the growth of downstream industries and positioned itself as a global hub for nickel-based battery materials. Mongolia, while operating in a different political and economic context, has also sought to strengthen state oversight and maximise national benefits from its mineral resources through strategic licensing, infrastructure development, and tighter control of mineral exports.

2.2.2 Africa

Across Africa, several countries are beginning to adopt more strategic approaches to CM. Ghana’s green minerals policy emphasizes stronger state participation and align-ment of mineral development with national industrial goals. Ethiopia has focused on tightening licensing regimes and formalising artisanal and small-scale mining to im-prove governance and value capture. Meanwhile, countries such as the Democratic Republic of Congo and Zimbabwe have used export bans or quotas on certain miner-als to encourage domestic processing and increase leverage within global markets.

3. Malawi’s’ strategic role in the global CM value

Malawi’s economy has traditionally been anchored in agriculture, particularly tobacco exports, with mining playing a relatively minor role, contributing less than 1% to the GDP. In recent years however, Malawi is increasingly emerging as a country with significant potential in the global CM landscape. The country hosts a wide range of critical mineral reserves. According to the Malawi Economic Monitor (2025) published by the World Bank, Malawi is estimated to host around 2% of global rare earth element resources. It is also home to the world’s largest known natural rutile deposit and the second largest flake graphite deposit. Furthermore, Malawi’s average uranium concentration per square kilometer is nearly three times the global average. Although most of these discoveries remain at the exploration stage, their scale and diversity are difficult to ignore. Table1: Some of the notable CM projects in Malawi. Modified from malawi economic monitor 2025: The rising cost of inaction

4. Overview of what Malawi’s CM Strategy Could Look Like

Malawi hosts a wide range of mineral commodities, but not all have high potential to advance national economic objectives. While the Agriculture, Tourism and Mining (ATM) strategy identifies mining as a growth sector, effective policy requires prioritization. Limited institutional capacity and capital mean that efforts must focus on CM where Malawi has scale, comparative advantage, and a viable pathway to value creation.

We also need to understand that criticality is not static. Demand shifts as technologies evolve, substitutes emerge, new reserves are developed, and supply chains diversify. In the mid-20th century, tin was essential for food packaging and electronics and was heavily stockpiled by governments. As aluminium and plastic substitutes as well as new technologies reduced tin use, demand declined sharply. By the mid-1980s, prices collapsed, leaving large stockpiles devalued. Mineral endowment alone creates no value; reserves sitting idle generate neither income nor influence. Only extraction, processing, and market integration convert geology into economic benefit.

To realize tangible gains from the current CM cycle, Malawi needs a clearly articulated national CM strategy. This strategy should guide government policy, coordinate institutions, and align investment toward activities that maximize long-term national benefit rather than short-term extraction.

A Malawi-specific CM strategy could be built around the following pillars:

• Strategic mineral prioritization

Malawi must define its own list of CM based on national development objectives, industrial potential, and geological advantage. An adaptive process should be established to regularly review and update this list as markets and technologies change.

• Targeted and predictable policy instruments

Policy tools such as export controls, “use it or lose it” licensing conditions, and fiscal incentives can accelerate exploration and project development when applied in a targeted and predictable manner. Broad, abrupt, or undifferentiated interventions risk discouraging. It is also imperative to account for cross-border policy interactions when designing domestic CM policies. While the goal is Malawi-specific policies, measures implemented without regard to actions taken in neighboring or competing jurisdictions may fail to produce the intended gains.

• State participation and domestic capital mobilization

Institutions such as MAMICO should be adequately funded and strategically deployed to participate in exploration and downstream processing. Policies should also encourage foreign companies to list on the Malawi Stock Exchange to deepen local ownership and mobilize domestic capital.

• Skills development, research, and institutional capacity

A successful strategy requires sustained investment in skills and knowledge. Universities and technical colleges should develop specialized mining related programmes, while fostering R&D. At the same time, government human resource capacity in mineral valuation, revenue management, and contract negotiation must be strengthened.

• Environmental, social, and governance (ESG) leadership

ESG must be treated as a core pillar of Malawi’s CM strategy, economic gains cannot come at the expense of the very same communities we want to uplift, we must prioritize environmental safeguards and community engagement. ESG compliance comes with economic benefits, For example, Malawi can leverage its hydropower potential to position itself as a low-emissions producer of CM which could enhance marketability and competitiveness in international markets.

• Infrastructure development and value addition

CM development must be supported by investment in energy, transport, and logistics infrastructure. Without reliable infrastructure it will be difficult to link CM to markets as well as develop downstream processing and manufacturing. Drawing lessons from other resource-rich nations, value capture lies in midstream and downstream processing and manufacturing, a direction Malawi must take. However, to be successful, downstream positioning must be incremental and selective, not aspirational across the entire value chain.

• Proper Management of Critical Minerals Revenues

A critical minerals strategy must give equal weight to how revenues are captured and managed. Proper mineral valuation and effective revenue monitoring systems are essential to curb illicit financial flows and ensure Malawi receives fair value from its resources. Fiscal discipline and a clear plan for investing critical minerals proceeds into other productive sectors are necessary to diversify the economy and reduce vulnerability to volatile mineral prices.  

• Strategic international partnerships

As a relatively new mining jurisdiction, Malawi cannot achieve its objectives in isolation. Strategic partnerships can attract investment, support technology and skills transfer.

4.1 Existing initiatives

Malawi has already signaled intent through initiatives such as the establishment of the Malawi Mining Investment Company (MAMICO), the plans of creating a sovereign wealth fund, and the ban of raw mineral exports. But intent without strategy achieves little. Recent export bans, implemented without a clear downstream plan, slowed exploration activities while failing to deliver value addition. This is precisely what a strategy is meant to prevent.

5. Conclusion

A successful CM strategy will require discipline, political courage, and patience. It must balance national control with investment momentum, and ambition with realism. The opportunity is real, but it is not permanent. Malawi can either act now with purpose or watch the CM moment pass it by. Additionally, a national critical minerals strategy must move beyond paper and be implemented with urgency. Without action, Malawi will remain policy-rich but outcome-poor. This paper is a call for government, the private sector, development partners, and all Malawians to act together and ensure that Malawi uses its own mineral resources to develop itself sustainably.

A Call for Pragmatic Reform in the Gemstone and Gold Subsectors

Introduction

The recent bans on the exportation of raw gemstones and other minerals — most notably the 12 February 2025 directive — have reignited debate across Malawi’s mining sector. While the government’s stated goal is to promote value addition and maximize domestic beneficiation, the practical realities show unprepared systems, limited capacity, and unintended harm to the Artisanal and Small-Scale Mining (ASM) subsector.

Emotion Over Evidence:

The Gemstone Dilemma

When the export of raw gemstones was prohibited, the aim was to push for local processing and job creation. However, the implementation was reactive, with limited sector consultation and little recognition of the technical, financial, and structural readiness required. The September/October 2025 extension of this ban to all unprocessed minerals deepened the crisis, especially within a gemstone value chain that is fragile but full of potential. A few small processors and entrepreneurs - myself included - have demonstrated that value addition does pay off, through better prices, job creation, skill development, and increased credibility in international markets. However, challenges persist, including:

•  Lack of cutting, polishing, and grading   equipment.
• Shortage of skilled gem cutters and   valuers.
• Absence of gemstone certification and   regulatory standards. Unstructured markets with limited local   demand. Irregular production that impedes   consistent supply.

The True Art and Science of Gem Valuation

It is important to understand that gemstone processing and valuation go beyond mere cutting or polishing. The value of a gemstone reflects a combination of qualitative factors, including rarity, origin, market and fashion trends, craftsmanship, historical significance, and certification through credible laboratories.

“In today’s global gem trade, trust is the new market currency.”

Unfortunately, Malawi currently has very little of that trust due to inconsistent systems and the absence of internationally recognized certification mechanisms.

Tikuyenera kudekha komanso kuyika ndondomeko zoti zitipititse patsogolo komanso kupindulira dziko — surely not khambakamwa ayi!

We must be patient, structured, and deliberate if we truly want to position Malawi as a credible player in the global gemstone arena.

A Needed Reality Check: Credibility and Global Perception

Let us be honest with ourselves — at times, we have become a laughing stock in the global gemstone community. Having been privileged to work with world leaders in the ethical gemstone trade and as part of the Ethical Gem Show and Chicago Jewellery Transformative Family through my work with Virtu Gem (USA), I have seen firsthand how credibility, transparency, and responsible partnerships define market success.

The ongoing Columbia Gem House (CGH) case — involving Malawi’s purported $309 billion claim — illustrates serious misunderstanding of global gemstone market realities. Consider that Gemfields, the world’s leading ruby producer, has generated around $1 billion in revenues over 13 years — roughly 70% of global premium ruby output. The total global ruby and emerald market is estimated at just $1–2.5 billion per year, making Malawi’s claim economically implausible.

This lawsuit risks damaging our global reputation before we have even established a significant presence. My sincere advice to government is simple: engage, not antagonize. Build bridges with global players like CGH — they bring expertise, ethics, and access to high-value markets, particularly the U.S., the world’s largest gemstone destination. Sustainable value addition is impossible if we isolate ourselves from such critical relationships.

A Smarter Approach: Capacity Before Control

Rather than an outright export ban, Malawi needs a tiered policy approach. Institutions like the Export Development Fund (EDF) could lead gemstone processing initiatives and training programmes while ASMs continue limited exports under transparent frameworks. That way, we promote structured growth rather than pushing small miners into survival mode. Ultimately, the growth of this subsector hinges on building trust, technical expertise, and internationally recognized systems — not blanket prohibitions.  

The Gold Story: Policy Contradictions and Missed Lessons

Parallel to gemstones, the gold business in Malawi has experienced rapid growth. Reports indicate over 90 gold hotspots, with estimated daily output of around 10 kilograms. Through the EDF, the Reserve Bank of Malawi (RBM) has positioned itself at the center of domestic gold trading since 2021, reportedly acquiring about 500 kilograms in total.

However, these official figures raise concerns. Either production estimates are inflated, or significant quantities of gold are being traded illegally, as RBM’s buying prices cannot match parallel market rates.

Adding to the confusion, gold has been removed from the Reserved Mineral Licence (RML) framework - effectively stopping licensed dealers from trading in gold to “protect” RBM from competition - while the same bank buys from unlicensed miners. This contradiction undermines formalization, transparency, and investor confidence.

No genuine investor - local or foreign - will commit to gold mining when they cannot export or access foreign currency. Our policies, though well-intentioned, may be chasing capital out of Malawi instead of attracting it.

Towards a Formalized Gold Economy

Malawi can learn from models such as Tanzania, whose smart regulation and government-private cooperation have turned gold into one of its major forex earners. Malawi should:

1.  Reinstate gold under dealer licences  (RMLs) for structured private sector   participation.
2. Enforce a partial retention scheme,  requiring that 20% of gold be sold to RBM before export — balancing national interest and market freedom.
3. Establish licensed gold markets in all  major hotspots in collaboration with  Federation of Artisanal and Small-scale  Mining in Malawi (FASMIM), Mining and Minerals Regulatory Authority (MMRA), Reserve Bank of Malawi  (RBM), Malawi Revenue Authorit  (MRA), and local councils.
4. Implement a robust certification and  traceability system for legal sourcing. 
5. Adopt digital oversight tools rather  than over-policing artisanal players.

If managed effectively, gold could easily contribute 40–50% of Malawi’s foreign exchange earnings, making it one of the country’s strongest economic levers.

“We need systems, not suppression — structure, not reaction. The potential is clear if only we let capacity lead policy.”

Building the Foundation: Systems that Work

Both the gemstone and gold subsectors require deliberate, systemic reform. Moving forward, Malawi should:

• Establish training and processing   centers for gemstone cutting, polishing,   and gold refining.
• Promote Public–Private Partnerships  (PPPs) to build value-addition facilities  and markets.
• Create a Gemstones & Precious Metals   Certification Authority aligned with   international industry standards.
• Transition policies gradually, engaging   stakeholders throughout the process.
• Encourage research, innovation, and   global partnerships to strengthen   confidence and credibility.

Conclusion

Malawi’s mineral wealth can transform lives and drive structural industrialization — but only through credible systems, realistic policies, and collaborative leadership. Emotion-driven bans may appear patriotic, but they risk killing opportunity and trust. We must invest in skills, certification, and partnerships, grounding policy in practicality rather than passion. That is how Malawi can move from being a reactive observer to a respected participant in the global gemstone and gold trade.

Though Malawi’s mining sector contributes a staggering one percent to Gross Domestic Product, the country continues to make exciting mineral discoveries.

These discoveries mostly by foreign listed firms include those of the much sought-after critical minerals by the World’s leading economic superpowers such as the United States of America and the European Union crucial for the new energy revolution.

The most exciting prospects include Kasiya Rutile-Graphite Project in Lilongwe where an Australian listed firm Sovereign Metals is conducting feasibility studies after discovering the world’s largest rutile deposit and the second largest flake graphite deposit, with mining expected in a few years’ time.

Exciting enough, the company has just discovered rare earth minerals as part of the resource envelope at Kasiya.  

The other major prospects include the Songwe Hill Rare Earths Project which UK Firm Mkango Resources is pursuing in Phalombe and the Kangankunde Rare Earths Project in Balaka.

Australian-listed Lindian Resources is preparing to start mining works at Kangankunde, which is one of the largest rare earth prospects in the world, within the year.

Besides, there is the Kayelekera Uranium Mine in Karonga. Another Australian-listed firm Lotus Resources has just resumed uranium mining at Kayelekera after its predecessor Paladin Africa suspended production in the aftermath of the Fukushima Nuclear Disaster in Japan, which resulted in the closure of several nuclear plants in Asia hence a global price slump of the yellow cake.

Another advanced project that is moving into mining stage is the Kanyika Niobium Project in Southern Mzimba District bordering Kasungu where the resource firm Globe Metals & Mining is mobilising to launch mine construction.

Globe Metals already finalised feasibility studies and just like Mkango and Lotus, signed a Mining Development Agreement (MDA) with Malawi Government.

Besides these projects, resource firms are pursuing several smaller ventures and potential large-scale mining projects at preliminary exploration level.

Benefits to Malawi Nation

The questions that click in the minds of many Malawians when there is talk about these projects are; how is Malawi benefitting or poised to benefit?

The Mines and Minerals Act (2023) has a number of clauses to ensure that Malawi benefits from mining projects. To begin with, the law includes a stipulation that the Malawi Government has the mandate to acquire shareholding in these projects as a minority shareholder. The Act gives the Minister responsible for Mining the authority to decide on the shareholding arrangement in coordination with the Minister of Finance.

Before the project reaches production stage, the Malawi Government negotiates and signs a Mining Development Agreement (MDA) with the resource firm which stipulates the shareholding percentage for the Malawi Government. Being a shareholder, the government is, therefore, entitled to get dividends from the mining company when the mine starts generating profits.

For example, in Kayelekera Uranium Mine which is in production stage, the Government has 15% shareholding while the MDAs for Kanyika and Songwe Hill give 10 percent free equity to Malawi Government.

Besides government shareholding, the other benefits for Malawi from a large scale mine as stipulated in the Laws and the signed MDAs include royalties charged at 5% of sales revenue from the mined product for industrial minerals such as these critical minerals.

The Government also rakes in revenue through the 30 percent corporate tax and other taxes including Pay as You Earn and withholding tax.

In addition, the large-scale mining company is mandated to sign a Community Development Agreement (CDA) which commits the company to commit at least 0.45 percent revenue from the mine to development projects in the locality recommended by the local community.

On top of all these benefits, the large-scale mining project creates numerous jobs and business opportunities for skilled and unskilled Malawians mostly members of the local community since the Act mandates a large-scale mining company to prioritise Malawians in its recruitment. This is also reflected in the signed MDAs.

Current challenges in mining sector

With the current administration in power for over 100 days now, a number of challenges have continued to dog the minerals sector dashing hopes that the sector will play a key role in the nation’s industrialisation drive underlined in the national vision, Malawi 2063.

It appears despite continued political rhetoric on overwhelming potential of mining to transform Malawi’s economy, the action from the government in reforming the sector is not enough with the “as usual scenario” syndrome vivid.

There was indeed excitement from the Malawi public when State President Arthur Peter Mutharika announced a ban on export of raw minerals in order to maximise gains for the nation through export of finished products.

But the results of the directive has clearly shown that though the ban was made with a good intention to ensure local value addition in order to stimulate economic growth and increase job creation for the locals, it has largely worked as a political gimmick. Arguably, the situation on the ground has shown that the timing was wrong as the ban was made without any prior stakeholder consultation.  

In addition, there are no guidelines for the implementation of the ban as the Government has just drafted the regulations for the implementation of the Executive Order this time after the ban had already negatively impacted local mining businesses.

Besides the ban, the other action by the new administration over the first 100 days is the appointment of the new Board of the Mining and Minerals Regulatory Authority (MMRA) and new Director General replacing those appointed by the previous administration.

Muthurika seemed to have scored highly in efforts to win investor confidence when he included former Minister responsible for Mining and current Coordinator of Chamber of Mines and Energy Grain Malunga in the board, which is responsible for overall governance of the minerals sector in Malawi, as Vice Chairperson.

But this action also seems to have diluted the role of the Authority in policing the private mining companies with Malunga also a Director for Lotus, running Kayelekera. Basically, how can a mine owner police the mine he owns? How can a Coordinator of the Chamber of Mines and Energy that represents the plight of the mining companies police the same companies? Such questions bring to light the Mines and Minerals Act 2023 which emphasizes on independence of MMRA.

The MMRA was created in the new Act, which was formulated by the previous Malawi Congress Party (MCP) leadership with little or no stakeholder consultations. They said the reason for amending the Mines and Minerals Act 2019, which was in force that time, was to remove hurdles in the process of granting mineral licences in so doing making it easy for mining investors.

Before MMRA took over this task, the Mineral Resources Committee which was headed by an official from the Ministry responsible for Mining and included officials from other Departments such as Environmental Affairs, Finance and the Police was responsible for granting of licences in accordance with the 2019 Act.

However, it appears other than meeting the objective for its formation which was to create sanity in the minerals sector, the formation of the MMRA has just created  loopholes for political manipulation of the sector with any political administration   appointing its royalists to head the Authority.

What Malawi needs to do    

The “doing things as usual attitude” will not help the sector to grow. Malawi Government needs to react to current global mineral market trends and implement measures to ensure that the nation adequately captures the benefits of the sector.

With the world’s superpowers jostling for critical minerals that Malawi is endowed with, it is important for Malawi to formulate a Critical Minerals Policy now that will help the country adequately benefit from these mineral resources.

The global scramble for these minerals including those important for the green energy revolution must not just be left with the foreign listed firms. With other governments including economic superpowers such as the United States and Australia partnering private companies to pursue mining projects for critical minerals, Malawi Government also needs to invest in this direction.

State-owned Malawi Mining Investment Company (MAMICO) needs to be given sufficient funds to pursue mineral prospecting ventures for the critical minerals and also partner private companies involved in prospecting projects.

In order to create sanity in the sector, it is also important to revert to the previous Mines and Minerals Act 2019.. The current 2023 Act, developed  without adequate stakeholder consultation, has created chaos in the sector, which is an impediment to growth and by giving much powers to the Minister carries similar traits to the abolished 1981 Act which gave absolute powers to the Life President.  

The MMRA, which was created by the new Act, seems to be handling the duties which were under the jurisdiction of the Department of Mines and Geological Survey Department (GSD) which is creating chaos in the sector.

In the 2023 Act, there is also this issue of giving a line Minister powers to decide on whether Malawi Government should acquire a percentage of free equity or not and the amount in a specific large scale mine. This is a glaring loophole for corruption created by politicians to make quick gains from mining projects.  It is dangerous for the country and stakeholders including some mining companies raised concern over it. We must remove this and revert to a law that specifies a percentage of free equity for government in a large scale mine as is the case with the abolished 2019 Act which gives the right to government to acquire at least 10 percent free equity in a large scale mine. Such a provision in the 2019 Act was investor friendly as it assured security of investment with the investor knowing beforehand the amount of equity to be offered to government.

On the ban, it is important for Government to expedite the process of developing regulations and gazette them as soon as possible to do away with the madness the ban has created so that the sector, including Artisanal and Small-Scale miners who are heavily impacted, continues to move ahead.

Mining can indeed significantly contribute to economic growth if drastic reforms are implemented.