Mining & Trade News

The Ministry of Industry, Trade and Tourism has lauded achievements in the implementation ofthe first National Export Strategy (NES I) which ran from2013 to 2018.

Principal Secretary in the Ministry Ken Ndala said during a consultative workshop in Lilongwe to brainstorm on the design of the National Export Strategy IIthat achievements of the initial phase include development of the Trade, Industrial and Small and Medium Enterprises Policies; and Control of Goods Act.

The achievements also include operationalization of the Buy Malawi Strategy; development of the National Trade Facilitation Action Plan; Construction of Standardization, Quality Assurance, Accreditation and Metrology (SQAM) infrastructure at Malawi Bureau of Standards; setting up of One Stop Border Posts; and establishment of One Stop Service Centre at Malawi Investment and Trade Centre.

Ndala said fruits of the NES I also include Simplified Trade Regimes, establishment of Online Business Registration System, establishment of the Collateral Registry, Development of the Financial Literacy Strategy, Development of the Warehouse Receipt Bill, The Credit Reference Bureau Act,and The Personal Property Securities Act.

“The NES I also yielded the Establishment of Online Investment; Development of Labor Market Information System (LMIS); Development of the National Labor and Employment Policy; Establishment of Malawi Trade Portal; and Linking smallholder irrigation schemes to seed companies,” he said.

Ndala also said the strategy resulted in the introduction of an online Oil Seed Extension Coordination Platform and Decentralization of the issuance of crop buying licenses to Agricultural Development Divisions (ADDs) across the country.

He saidthese outstanding results were achieved through Technical Working Groupswhich were set under the Trade, Industry, and PrivateSector Development Sector Wide Approachasthe implementation platform of the NES I.

Ndala said such benefits from the NES I are an inspiration to launch the NES IIadding that the first phase has provided legal frameworks for the implementation of NES II.

He said it is imperative to undertake NES II tofinalize the key investments that were supposed to be undertaken in the sector under NES I as well as deal with emerging issues that will be identified in this successor strategy.

Despite the notable achievements, the NES I still did not fully address the policies that the Ministry set in the plan.

Ndala said the under performance of the NES I was due to the deficient resource mobilization with heavy dependence on development partners and donor agencies and also low level of investment in productive sectors in terms of local investment in manufacturing projects with high value addition.

“The NES was overdesigned and too ambitious to be realized within a five-year period, given the prevailing conditions; It reflected more of an Industrial Policy rather than an Export Policy as very limited actions for effective export promotion, facilitation, export development, aftercare, and policy advocacy were planned,” he said.

Ndalaalso said week and ineffective collaborative framework between Ministries and Agencies affected competitiveness of local products and services on the international markets following the higher costs of doing business in Malawi as compared to other competing countries. 

Commenting on the challenges faced, Director of Planning in the Ministry Francis Zhuwaosaid the obstacles arose due to unpredictable financing leading to no drastic growth in exports as expected that necessitated the review and development of the successor strategy.

“With support from the Commonwealth Secretariat, we have therefore gone into the development of a successor strategy. It is my sincere hope that we will give this process the same support that we gave during the design of the NES I,” Zhuwao said.

He expressedgratitude to the Commonwealth and all development Partners in the Trade, Industry and Private Sector Development sector for technical and financial support.

In her remarks, Commonwealth Trade Adviser Yinka Bandele said the body saw it right to fulfil their duty of supporting developing countries on economic issues.

Bandele said: “The Commonwealth is very committed to supporting member countries’ efforts to achieve the Sustainable Development Goals, including through trade. We look forward to working with the Government of Malawi on a new strategy that will overcome key hurdles to growth and help transform the economy.”

She further urged the government to draw lessons from the previous NES in strategizing the new plan.

Bandele also said Malawi needs to work on economic diversification to do away with over-dependence on agricultural produce.

Malawi, whose main export commodities include tobacco and tea,is facing a significant trade deficit as it is importing about twice the value of goods it exports.

The Ministry is, therefore, working on finding solutions to issues affecting trade competitiveness, and identifying priority sectors for export development and lead markets for increased trade.

The Ministry is designing NES II and Action Plan for 2020-2025, a process which will be finalized later this year.

Cement manufacturing giant LafargeHolcim Malawi has taken the market by storm with the launch of Instacrete Ready Mix Concrete, which is the first commercial ready mix concrete to be introduced on the Malawi market.

Lafarge CEO Albert Sigei said at the launching ceremony of the Ready Mix Concrete at the Company’s Central Region offices in Kanengo, Lilongwe, that the new product will simplify the building process for contractors making it faster, better and safer as compared to the man mixing process.

Sigei said; “Building solutions around the world have been evolving; and the same needs to happen in Malawi. As a country with one of the highest urbanization rates in the world, it is expected that the demand for infrastructure development will be high.”

“Building solutions that provide faster and higher quality materials for the development of that infrastructure are, therefore, critical at the current stage of our country’s development.”

Instacrete Ready Mix Concrete will be produced by InstaCrete Limited, a subsidiary of Lafarge.

Lafarge also launched a concrete laboratory that will support InstaCrete through provision of technical services by ensuring that the concrete mix designs are innovative and tailored for different building projects.

“This laboratory has the capability to develop concrete mix designs, test aggregates and provide technical expertise for major concrete structural work. The laboratory is open to all customers that may wish to use these services,” he said.

Lafarge’s Head of Marketing and New Solutions ChikondiNg’ombe, urged building contractors to start using Instacrete Ready Mix Concrete saying it is far much better than the man mix process which on some occasions has resulted in the collapse of the structures due to poor mixing.

“It is difficult to control quality using the man mixing process as some mixer’s overdose on some materials,” she said.

Lafarge has only introduced the new product in Central Region but Ng’ombe said the Company has planned to introduce the Concrete in Northern and Southern Regions since there is rising demand for the product which shows that the market is ready for it.

“We have a readily available market for the product and we have already started supplying to some major Lilongwe construction works including Area 18 interchange,” said Ng’ombe.

Formerly Portland Cement Company, LafargeHolcim Malawi has been a leading building solutions provider in Malawi for over 60 years providing innovative building solutions serving masons, builders, architects and engineers.

Lafarge’s cement brands include Supaset (CEMII 42.5R), Duracrete (CEMII 32.5N), Kumanga (MC 22.5X), and Khoma (MC5).

The Company also produces SupaLime (hydrated lime) and, according to Ng’ombe, other innovative products are in the pipeline.

There are two to three types of wastes that are generated by mining activities. These are Waste Rock that is stored, secured in waste dumps and can be used as fill material, road construction and other infrastructure, Processed Rock commonly known as Tailings (containing chemicals) that is stored in construction facilities and where possible, these chemical solutions together with pulverised rock are    recycled in order to be used before being pumped into the storage facilities and also Mine Water which will not be discussed in this article.

1.            Mine Tailings

Mine tailings are finely grounded residual materials that remain after removing an ore of economic value from a process plant. Tailings is usually a by-product of mineral recovery processing and is mostly in form of liquid slurry made up of very fine particles from crushed, grounded, and processed with water and possess no any financial gain at the point of disposal. Tailings are processed from the mill and are diverted to storage built structures that are commonly referred to as Tailings Storage Facilities (TSF).

These storage facilities are in form of dams, embankments and other types of surface impoundments. It must also be noted that the material that goes to tailings facility might also contain significant amount of metal due to very poor recovery and that at some stage some mining companies may wish to reprocess to recover it, although this is not a common practice in most mine ore processing.

2.            Tailings Management

Tailings are usually stored using the most effective way inorder to meet specific regulations and standards. It must be noted that tailings structures are built in a differing fashion to suit a particular environment and specific mineral processing method. The ground conditions and   the environment are the most crucial parameters that control the storage of tailings hence geotechnical analysis at feasibility study is of very fundamental importance.In cases where    tailings do not contain substances that are harmful or toxic, water is sometimes diverted inorder to retain the physical stability of the facility by way of covering with soil, reshaping and planting vegetation cover and subsequently put into land use in the long term.

Tailings management is the primary responsibility of a mining company both during and after mining operations. Subject to advanced statutes, tailings management needs to be very cost effective throughout the mine life even beyond post closure period. Management of tailings include enhancement of mine workers on safety and health and also the nearby surrounding communities, developing new approaches for environmental protection, devising new ways of assisting the communities etc.

3.            Tailings Dam Failures

Tailings dam failures are caused by numerous factors among others the most occurred from past experience include:

(a) Unusual rainfall

✓ Too much rainfall leading to oversaturation thereby yielding rainwater that can overflow carrying with it the tailings away from the dam onto the downslopes.

(b) Foundations and Structure

✓This can be caused by design errors, structural inadequacies and failed decantation. Also foundations with insufficient investigations that fail to guide enough support to the weight of the dams.

(c) Seismic liquefaction due to earth tremors/earthquakes

✓ Structure is destroyed by continuous shaking of the ground motion and since dams are designed to withstand such vibrations, there is instability created if the movement is larger than anticipated.

(d) Subsidence of the mine

✓ Sometimes the dam is built above an underground mine; the underground mine may collapse and the mine workings can absorb water and overflow when the subsidence is filled to capacity.

(e) Seepage and Erosion

✓ Due to rainfall, there may be erosion of the face of the dam that may be difficult to maintain or repair. Besides, erosion of dam/embankment materials due to seepage or underground drainage to areas that were designated as dry, may cause dam failure.

In all these causes of dam failures, the potential impacts is on biodiversity and associated ecosystems. These, in the long run cost companies massive financial compensations and also reconstructions projects to stabilize the dam structures.

4.            Examples of Tailings Dam failures for the past 5 years

Worldwide, there have been numerous catastrophic dam failures over the years. The most recently noted is the deadly dam burst due to mudslide at the Corrego do Feijao mine in Brazil operated by iron ore mining giant, Vale and happened in January, 2019. It is alleged that 13 Vale employees and a German Auditor TUV SUD are involved in a tussles where Brazilian Authorities are accusing them of fraud by presenting fake documentation backing the dams’ stability where about 250 people were nearly killed and mine waste tailings (about11.7 cubic metres) spilt all over to close by mining towns and the countryside below. It is also alleged that homicide and environmental damage case could not be ruled out. In another development, Vale has set aside $107 million for compensation and also projects to spend $471 million on dam stabilization projects by 2023.

On the same note, there have been tailings dam failures in Brazil like the Samarco iron ore dam failure mined by a giant BHP Billiton that killed 19 people, displacing 700 people and the Doce river valley was highly devastated and contaminated in 2015. This was considered the worst environmental disaster. Following this catastrophe, a lawsuit was served at Liverpool high court by a law firm SPG and over 200,000 Brazilians claimed damages of about $5 billion which was the largest in United Kingdom’s history.

In Canada, the Mount Polley gold and copper Mine run by Imperial Metals Corp collapsed in (2014) where toxic water from the mine tailings spilt over the Lake Polley. About 24 million cubic metres of tailings waste and sludge was deposited into nearby creeks causing an environmental concern and charges related to Fisheries Act were to be laid down under the Federal Law. These are but only a few examples of dam tailings failures and if these are not properly managed, they bring huge financial costs and implications to the mining company and great care should be exercised when operating these structures though some of the causes are natural in nature.

5.            Waste Rock

Waste rock is unwanted rock material that has been removed/excavated from the pit after mining and does not have a metal content of economic value. Waste rock is also a high volume of material that also may originate from chemical processing of metalliferous and non-metalliferous minerals by either opencast, adit and underground mining .The waste rock may however contain metal that is too way far below the cut off value. Usually the volume of mine waste is larger than the metallic ore and this mostly depends on the stripping ratio (ratio of waste to ore).  For example, a stripping ratio of 4:1 means that 4 tonnes of waste rock needs to be mined inorder to mine 1 tonne of ore. Generally, in open pit mines, the stripping ratio is on a higher side than in an underground mine for the obvious reasons and the waste rock is often stored close to the mine to minimize transports. The waste rock is deposited in stockpiles.

The amount of waste rock that needs to be removed from the pit depends on the rock geometry, location of the ore body along with the mining method used, the composition and stability of the rocks as well.

6.            Environmental impacts of waste rock

Mined waste covers a considerable area as such, issues of groundwater contamination are very common. In most mines, mining waste rock is also used as an earth road/work fill material and this can be a long term potential water contaminant.

However, when the rocks contain certain minerals in enough quantity combined with poor management of the waste, it can become a large risk to the environment and health of local communities. In some cases, the mine uses certain chemicals such as cyanide in the processing stage. These chemicals often account for a small volume of the total waste, but can pose a large risk due to their high toxicity.

In areas where coal mining takes place, the rock waste contains sulphurous compounds that are susceptible to Acid Rock Drainage formations. This causes both ground and surface water contaminations. Sulphide minerals are easily weathered when in contact with oxygen. When sulphide minerals break down, they can produce acid water. The acid water further speeds up the weathering of the minerals, called chemical weathering. The result is an acid water with high metal content. This is now referred to as acid rock drainage (ARD) or acid mine drainage (AMD).In terms of groundwater, the acid leachate affects water quality due to high concentrations of some elements in the saturated zones

7.            Managing Waste Rock

✓            Included in the Environmental Management Plan.

✓            Environmental audit and inspections are vital

✓            Following relevant legislative guidelines on environment

✓            Consider future landform uses e.g. during rehabilitation and post closure period.

✓            Development of infrastructure e.g mine roads, landfills, buildings.

✓            Erosion maintenance

Another Management is to adopt a risk-based management approach. The risk management process is based on Risk Assessments. The risk assessment identifies risk pathways (unwanted event and the associated environmental receptor/factor), which may cause material impact to key environmental factors. It also identifies the level of uncertainty associated with a risk pathway, which can be low, moderate or high depending on the degree of uncertainty.

The Electricity Generation Company (EGENCO) will from September 8th to 10th host the 2019 African Hydro Symposium (AHS) at the newly built Sunbird Mount Soche Hotel’s SocheInternational Conference Centre in Blantyre.

The theme for this year’s symposium, which is the 29th, is “Quality Power for Sustainable Development in Africa.

Senior Public Relations Officer for EGENCO Moses Gwaza says in a Press Statement that EGENCO is currently inviting various organizations and individuals in the country to participate in the symposium which is a beneficial platform for sharing vital information with foreign hydro energy experts.

“The symposium which is held annually, is a regional forum where hydro power plant operating experts              representing various electricity utilities and Independent Power Producers (IPPs) in Africa, meet to share experiences and deliberate on developments, operations, maintenance and management of hydro power plants in the continent,” Gwaza explains.

He says the meeting will attract approximately 150 delegates from power utilities across Africa and some international stakeholders from various energy sectors, equipment manufacturers and suppliers from Europe, Asia and America.

Gwaza says the hosting of the great conference is a collaboration of both EGENCO and the Secretariat of the African Hydro Symposium based at Kafue Gorge Regional Training Centre in Zambia.

He urges organizations wishing to participate as joint sponsors and organizations in the power and related industries to register their individual employees as delegates to attend the symposium.

Meanwhile, various companies and organizations in the country have come up to provide financial assistance to the event.

The companies include the NICO Group which donated K4.5-million to the power utility for the event, which will explore strategies to develop the energy sector for economic growth.

EGENCO CEO William Liabunya thanked NICO for the support saying it manifests that the insurance company is a good corporate citizen who want to help EGENCO overcome the country’s power     generation woes.

The symposium will provide a room for sharing of viable ideas to move Africa’s electricity access from an average of 30 to 35%.

EGENCO was founded in 2017 as an electricity generation utility after the unbundling of the Electricity Supply Corporation of Malawi (Escom) into two entities with Escom responsible for power transmission and distribution.

The company, which recently launched its strategic plan, has planned a number of power generation projects including the construction of Mpatamanga hydro plant on Shire River.

EGENCO is seeking financing to execute the US$473-miillion project which will be supplying 309 MW to the national power grid.

German Consulting firm, Fichtner GmbH and CO KG, already conducted a feasibility study for the project with funding from the World Bank as part of the Energy Sector Support Project.

Besides Mpatamanga project, EGENCO is also sourcing funds for three other generation projects including the 138MW Kholombidzo Hydroelectric Power Plant which will be constructed on the Shire River upstream of Zalewa Bridge.

The US$511.5-million plant to be constructed over a period of 5.5 years will be uppermost in the cascade of the hydro-plants in the river.

Egenco is also planning to construct the 180MW Songwe Hydropower Plant on Songwe River through        cooperation between the Governments of Malawi and Tanzania.

The utility is also working on the expansion of Wvowe Mini Hydropower Scheme to add 4.5MW to the power grid.

EGENCO also plans to install a solar PV plant close to a load center at Nanjoka in Salima to maximize benefits to the national grid and satisfy the afternoon peak demand. The project scopes installation of a 20MW solar power plant to increase the generation capacity and introduce a diverse power mix in the generation system.

Trash interruption is the one of the contributing factors hindering power generation in the country so EGENCO is also conducting trash river diversion projects in many power stations on the Shire River.

In September 2017, the company commenced an 18 months project of dredging and diverting a tributary that was depositing a lot of slit at the Tedzani intake pond, a project that consumed about MK5-billion.

With funding from the US government energy compact through the Millennium Challenge Corporation, in January 2019 EGENCO acquired a brand new dredger for Kapichira power station to remove silt which covered over 70% of the generating dam.

Siltation lowers the water levels in the dams making it difficult to generate electricity matching the demand.

Currently the country has 406.6MW installed generation capacity but only 335.15MW is available to cater for 18.63 million people.

The utility’s hydro-power plants include Nkula A and B, Kapichira I and II, Tedzani I, II and III and Wovwe. 

EGENCO is also planning to construct a coal fired power plant as one way of diversifying the power sources.

The Malawi Energy Regulatory Authority (MERA) has established a new Installer’s Permit Committee (IPCO) and mini-grid egulatory framework which it has described as a vital tool in preventing accidents that occur due to poor electrical installation.

Board Chairperson for MERA KhwauliMsiska said at a sensitization workshop for the new framework in             Lilongwe that the revised electrical installation assessment framework recognises that installers are usually good at specific installations that need to be certified for the safety of the installed buildings.

He said in the old framework experience was missing as criteria for certifying installers but the new framework will be considering both experience and qualification as chances for upgrading and certification of the installers.

“In order to reduce incidences in form of fire, electrocution and equipment damage, those doing                installations need to be only those that have the right qualifications and experience,” Msiska said.

He urged all the electrical installers to acquire permits from MERA observing that many electrical installers in the country are operating without possession of valid permits which is putting people’s properties at high risk of catching electric fire.

Msiska also expressed concern over the existence of a number of mini-grids developed by both Government and non-governmental organizations which have been handed over to communities, without relevant training, on management, operation and maintenance.

 “You can agree with me that mostly ownership and organizational structures of the mini-grids are not clear and accountability and transparency procedures are not clearly defined, which presents challenges for authority institutions to manage supporting and regulatory structures,” he said.

Msiska said the new framework for mini-grids intends to achieve sustainable development and operation of the mini-grids in Malawi in strides towards providing modern energy to remote areas where grid extension does not offer an economically feasible extension solution.

He said MERA recognizes the significance of engaging Government and stakeholders in ensuring effective regulation of the energy sector and understanding on matters relating to the regulation of the mini-grids.

Msiska thanked United Nations Development Programme (UNDP) country office for financial support towards the development of the mini-grid framework.

“The preparation of the regulatory framework for mini-grids in Malawi was a commitment and devotion   from many stakeholders of whom we are highly grateful for their valuable contributions,” Msiska said.

Commenting on the development, an electrical contractor PempheroNazombe lauded the new framework saying it will assist experienced electrical engineers in upgrading their licenses.

“This workshop is important as the new permit has included experience as one of the aspects for one to upgrade while the past permit only centered on qualifications like university degrees leaving out the experience that one has,” Nazombe said.

He said the development will also assist in marketing brands of certified installers since organizations will be considering legal permits before deploying the contractor.

Nazombe pleaded with fellow electrical contractors to comply with the framework in so doing assist in preventing people’s properties from electrical accidents.

MERA is mandated to regulate the energy sector in Malawi in a fair, transparent, efficient and cost effective manner for the benefit of the consumers and operators.

The Electricity Generation Company (EGENCO) says it is exploring alternative power sources to supplement power that it currently generates from hydro-plants.

EGENCO CEO William Liabunya said in an interview at the launching ceremony of the Company’s 15 years strategic plan in Blantyre that EGENCO wants to have diverse sources of power in order to do away with load-shedding due to unsteady supply of power as the hydro sources are prone to climate change related problems including diminishing water levels in the Shire River.

Liabunya said: “There are a lot of avenues which EGENCO is exploring to boost electricity generation and one of them is diversification.”

 “We strongly believe it is time to diversify to other sources of power because as you are aware 90 % of the electricity being generated is hydro-electric power.”

“The biggest challenge we have is that each time the water level goes down, electricity generation is affected and in-turn power supply is affected. We, therefore, need to find alternative sources that are sufficient and reliable.”

Board Chairperson for Egenco Lloyd Muhara told Mining & Trade Review at the same function that as stated in its strategic plan, EGENCO will explore and promote the use of clean energy in order to deal with the problem of deforestation due to excessive use of biomass as a source of energy.

“We want to start generating reliable and diversified power by investing in new power plants in a sustainable manner,” he said.

In the plan, EGENCO has set an ambitious target of increasing its installed electricity generation capacity from 367.37 to 1,687.5 MW by 2033 and overcome the country’s electricity woes in 14 years. The strategic plan is for 2018 to 2033.

Meanwhile, the Economic Association of Malawi (ECAMA) has asked the Malawi Government to increase funding to the energy sector starting from the next budget in order for EGENCO and Electricity Supply Corporation of Malawi (Escom) to achieve their plans of ensuring stable and adequate supply of electricity.

ECAMA president, Chikumbutso Kalilombe made the statement during a pre-budget consultation meeting which was organized by the Ministry of Finance, Economic Planning and Development in Lilongwe and was presided over by Minister of Finance Joseph Mwanamveka.

Kalilombe said EGENCO’s ambitious plan to increase power generation will only be fully implemented with adequate funding.

“It is high time government invested directly into power production. Even if we do not sort out all woes now, we will have started,” he said.

He also said the government needs to be aggressive in its campaign to attract investors in power generation by speeding up the ongoing policy changes to accommodate independent power producers.

Malawi’s electricity demand is expected to grow to 600 MW in 2018, 950 MW in 2020, and 1,200 MW in 2025.

The energy sector spending as a percentage of GDP remained below one percent between years of 2016/17 and 2018/19, and is projected to average around one percent by 2030.

Though only less than 12% of the Malawi population is connected to the electricity grid, blackouts are the order of the day as Escom conducts a load shedding programme to ration power supply especially in dry season when water levels are low in Lake Malawi and the Shire River.

Various studies have identified lack of reliable power as the main factor hindering investment in major economic sectors including mining and manufacturing.

Egenco, which was born from the unbundling of Escom into two entities in order to enhance efficiency in the power sector, started its operations in 2017.

Since its formation, the Company has been active in carrying out maintenance and expansion of power plants including the Nkula A which has been modernized with funding from US’s Millennium Challenge Corporation.

EGENCO is also constructing Tedzani IV with funding from the Japanese Government and has planned a number of generation projects including the setting up of a coal fired power plant to generate 300MW.

Imports grab 30% cement market share Local manufacturers cry foul

There is a growing influx of imported cement brands, mainly the popular Dangotecement, on the Malawi market which is continuing to pose stiff market competition to the local brands in so doing threatening the future of Malawi’s cement manufacturing industry.

Investigations by Mining & Trade Review have revealed that Dangote Cement is emerging as a dominant foreign brand on the local market mainly in the major cities of Blantyre, Lilongwe and Mzuzu, squeezing out brands for local producers Lafarge Holcim Malawi, Shayona Cement Corporation and Cement Products Limited (CPL).

Statistics from local cement manufacturer Lafarge Holcim Malawi indicate that the imported cement has grabbed up to 30%   cement market share.

Malawian traders are mainly importing Dangote Cement from Zambia where the African giant manufacturer has a plant in the City of Ndola.

Cement shop owners Mining and Trade Review interviewed in Lilongwe said the diminishing presence of locally produced cement on the market is due to higher prices of the local products as compared to imported brands of similar quality and strength.

“In my shop, you would find that a local cement brand of lesser strength is being sold at MK6500 which is the same price for Dangote cement with a grade 42.5R. So the local buyers prefer Dangote other than the local brands which entices us to order more quantities ofDangote cement,” said a cement distributor interviewed in Lilongwe Old Town, who preferred anonymity.

Mining & Trade Review got similar sentiments in random interviews with shop owners in Blantyre where besides Dangote there is an influx of other foreign cement brands including Ultra-Semi, PPC, Shuwa Cast and Sinoma, whichis manufactured by China Materials Company Limited Group – a Chinese multinational with branches in a number of African countries including Tanzania and Zambia.

Our investigations in Blantyre also revealed that some foreign cement brands are being smuggled in huge tonnage into Malawi from Mozambique, mainly through the Muloza boarder in Mulanje.

We also established that Dangote is a preferred choice for some construction companies which are hired by government to undertake large-scale construction projects which manifests that the government is issuing licenses to traders to import huge quantities of the foreign brand.

“We, contractors, opt for Dangote because of the pricing aspect. Ordinarily, the difference in prices between Dangote and local cement of the same strength needed not to be that much,” said a Blantyre-based Construction Entrepreneur Christopher Beula.

In Mzuzu and Mzimba, our investigations showed that though local brands mainly for Shayona Cement are in abundance in shops, Dangote is also emerging as a big    competitor.

The Mzuzu Hardware shops are selling DangoteCement 42.5R at K7,000 and Shayona’s brands Thanthwe 42.5R and Akshar 32.5N at K6,000.

“We are used to the popular brands such as Akshar here though over the past few years Dangote seems to be winning a market share,” said a consumer in MzimbaVincent Gondwe.

Shayona Cement Corporation Operations Manager PrajeeshPadmanabhan commented on Mining & Trade Review readers’ forum that locally produced cement brands are encountering stiff competition from foreign brands because the taxation regime in countries such as Zambia from where most of the Dangote cement is imported is more favourable to manufacturing and export business while that of Malawi supports imports.

Padmanabhan said: “Zambia is already charging surcharge and duties if you have to import cement but Malawi does not charge any other tax a part from VAT (Value added tax).”

“Countries such as Zambia are also giving long tax holidays to manufacturers so any investor will be interested to invest in Zambia and export to its neighbouringcountries where there are no any duties.”

“Already Zambia has an excess production capacity while Malawi continues to saturate the market with imports that are draining foreign exchange.”

Responding to comments by Mining & Trade Review readers who raised the point that Malawi Government is not protecting the local cement industry as a way of abiding by the Common Market for Eastern and Southern Africa (Comesa) and Southern Africa Development Community (Sadc) free trade rules, Padmanabhan said it is possible for Malawi to protect the local industry by charging surcharge or through licensing as countries such as Zambia are doing.

CPL Chairman Aslam Gaffar concurred with    Padmanabhan in bemoaning the current business scenario for local cement manufacturers describing it as unhealthy.

Gaffar said: “There is a problem with Sadc and these other regional treaties. Imports are tax free and yet locals in same field are heavily taxed.”

“Malawi will remain forever a dumping ground if we do not activate the Anti-Dumping and countervailing rules provided in these treaties.”

“Zambia charges a 40% import excise duty, plus 5% surcharge then 16% VAT for any cement imports, in Malawi not even VAT because our country has got its own Guptas.”

Lafarge Holcim Malawi’s Head of Marketing and New Solutions ChikondiNg’ombe said it is imperative for the government to ensure that there is a level playing field so that cement imports do not get an upper hand over locally produced products and also for Malawian exports to be   supported.

“The level of cement imports into Malawi has risen over the recent years to account for close to 30% of Malawi’s cement market. While we appreciate the importance of competition, an unfair playing field in favour of imports will have the adverse effect of discouraging local manufacturing investments with consequent negative impact on employment and other manufacturing-linked economic activities,” she said.

Ng’ombe explained that in order to ensure that there is a level playing field on the market, the government needs to deal with smuggling by traders who do not pay taxes hence have undue advantage over local production, and crack down on apparent dumping of product from foreign players.

“As an example, cement brands coming into Malawi from Zimbabwe are sold at prices that are below the selling price in Harare. It would appear that such players are simply aiming at extracting the already scarce forex from Malawi into Zimbabwe,” she said.

Ng’ombe also said the government has to address the issue of uneven tax regimes between Malawi and its neighbours which is there in spite of belonging to the same Sadc bloc.

She explained that imports of cement into Malawi are not subject to any special tariffs but in spite of Sadcmembership, most of the neighbouring countries have placed cement on their list of sensitive products and apply special tariffs on the same to protect their local industry.

Ng’ombe said: “Malawi must look at the treatment by the different countries and, at the minimum, apply the same treatment to achieve a level ground. Failure to do this will continue discouraging Malawian exports while giving undue advantage to imports from those countries.”

She urged Malawian customers to keep up with Lafarge cement as their product of choice despite the market challenges saying the company places a heavy focus on quality to ensure that it has repeat business from its customers.

Ng’ombe said as a locally based cement manufacturer Lafarge ensures that local (MBS) and international            accreditations (ISO 9001:2015) are maintained.

She said: “Importers cannot be subjected to the same level of scrutiny and accountability as it is difficult for customers to trace what they have bought back to the manufacturer.”

“Having said this, it should be notedthat the cement industry has in Malawi brought down prices significantly in real terms over the recent years. This is in spite of major escalation of key cost items such as power and fuel and other challenges such as power rationing. We hope that lasting solutions can be found on these issues in order to allow the industry to bring down production costs and make cement more affordable.”

However, spokesperson for the Ministry of Industry and Trade, MayesoMsokera, told Mining & Trade Review in an earlier interview that government gives licences to traders to import some cement to supplement the deficit from local production.

Msokera said, “As Government, we have the mandate to balance the needs of both the producers and the consumers with regard to availability of this essential commodity as well as its price, and the current cement importation does not amount to an influx.”

He explained that it is the government’s duty to stabilize supply and prices of cement so that they do not destroy the construction industry, which also employs many people and is an integral part of Malawi’s infrastructure and industrial development as it provides a growth impetus to other sectors of the economy through backward and forward linkages.

“We have had situations where cement prices rose to around MK12000 in 2017. Therefore, it is, essential that, cement availability and affordability is safeguarded for the healthy growth of the Malawi economy,” he said.

He, however, acknowledged the fact that some cement is being smuggled into the country and said, as Government, they are considering additional measures of curbing the problem.

“The Ministry is discussing with other Government agencies such as the Malawi Revenue Authority and the private sector stakeholder institutions so that issues of smuggling are addressed holistically. As a Ministry, we would like to appeal to the private sector to hold hands and collaborate with Government in order to loot out this malpractice bedeviling our manufacturing sector,” said Msokera.

He advised local firms to extend their distribution channels to supply their cement to all angles of the country including bordering districts where traders prefer importing from neighbouring countries as a cheaper option.

Msokera assured the local industry of Government’s   support saying the Ministry is advocating for growth and development of local industries through the Buy Malawi Strategy, which encourages consumers to purchase locally produced products which are equally of good quality.

Both Shayona and CPL have invested in multibillion-kwacha construction of clinker producing plants at their factory areas in Kasungu and Mangochi respectively.

Shayona, which has a workforce of over 1200 mostly locals, has a comprehensive CSR programme which has seen the company constructing school blocks at a primary school    close to the Kasungu factory, making drug donations to government hospitals and clinics, and planting trees annually in the factory locality to assist in environmental conservation.

Though its factory is relatively new, CPL also boosts of a CSR programme that has involved donating cooking oil making machines to members of the community in the factory area, constructing school blocks and procuring a transformer to electrify the area that hosts the factory.

Shayona Cement Corporation produces cement brands of various strengths including: Akshar, Buildplast and Thanthwe while CPL’s brands include Mkope and Njati.

Lafarge Holcim Malawi, whose cement brands include Khoma, Kumanga, Duracrate and Supaset, has continued   to show commitment to Malawi with recent investments of close to MKW 1.5billion in a Soil Stabilized Blocks factory (14 Trees) in partnership with the Commonwealth Development Corporation (CDC).

The company is executing the investments in line with its ‘Kumanga Malawi’ programme which is aimed at supporting the Government and other stakeholders in developing Malawi.

Pillars in this program include sustainable building solutions, Small and Medium Enterprises support, Road and Workplace Safety, Employee empowerment and Product usage awareness/ training.

Records from the National Statistical Office indicate that in 2017 alone, imports of cement and clinker amounted to MK28.76-billion.

Dangote Cement, owned by Nigerian billionaire AlikoDangote, is Africa’s largest cement producer with a production capacity of 45.6-million tonnes per year.

Government is progressing with preparations to construct an international airport in Mangochi as part of its plans to turn the district into the centre of tourism in Malawi.

This is contained in the State of the Nation Address that State President Arthur Peter Mutharika delivered in parliament in Lilongwe at the opening of the 2019/2020 budget meeting.

He said: “My Government recognizes that we need more investment in the tourism sector, In that regard, I want to report to this House that we will vigorously pursue our program to transform Mangochi into a tourism capital of Malawi.”

“We have a plan for a five-star hotel, an international airport, a golf course, shopping malls and modern roads and other top facilities.”

He also pledged to develop tourism facilities on Mulanje and Zomba mountains including cableway cars to attract more visitors to Malawi.

Mutharika said as part of tourism development, his government has also undertaken extensive rehabilitation at Chileka International Airport.

“The resurfacing of the main runway is underway in order to improve the airport so that we increase its air traffic activity,” he said.

Mutharika told the House that his government has also rehabilitated and expanded the Kamuzu International Airport (KIA) using proceeds of a grant from the government of Japan.

The project involved the expansion of the current terminal building, construction of international and domestic departure and arrival terminals, and installation of a radar system.

Mutharika said government’s plans to construct new international airports in Mzuzu and Mangochi are also on course.

On water transport, Mutharika announced that his government has started construction of a MK10 billion port at Likoma Island, and the works will be executed in 18 months.

He said the project comes in the wake of the recent improvement of NkhataBay Port and the installation of light beacons which have enhanced the safety of passengers and vessels.

He said plans are also underway to link Nkhata-Bay and Mbamba Bay Ports under the Mtwara Development Corridor which is 400 kilometres shorter than the Dar-es-Salaam route in order to have additional access to the Indian Ocean.

On rail transport, Mutharika said his Government, in collaboration with Central East African Railways (CEAR) Limited, is rehabilitating the 399-kilometre railway section from Nkaya in Balaka to Mchinji.

“Under the same arrangement, we are also in the process of reconstructing the 72-km Limbe-Sandama railway,” he said.

On road construction, he said his government is working on construction of several major roads including Zomba-Jali-Phalombe-Chitakale,  Thyolo-Thekerani-Muona-Makhanga Road, Njakwa –Livingstonia, Dual Carriage way between Parliament     Round-about and Bingu National Stadium in Lilongwe,  Thabwa-Chitseko-Seveni     Road,  Ntcheu-Tsangano-Neno, Lirangwe-Chingale-Machinga, Lumbadzi-Dowa-Chezi, Kawere-Mkanda, Jenda-Edingeni, Rumphi-Nyika turn-off-Hewe Road, and Blantyre Ring Road.