Mining & Trade News

Introduction

Currently several small wind power generators are installed and supplying power to Villages in Thyolo, Chiradzulu, Ntcheu, Nkhotakota, Nkhata Bay and Mzimba. Under this Village Electrification Project the total installed capacity is 132 kW of which 90 kW is from wind. The wind/solar hybrid installations are supplying up to 150 homes within a 2km radius in each village. However this shows that there is potential for large wind turbines which can generate electricity up to 5MW each.

Project Sites for Wind Power Generation

 – Lilongwe

Four sites were visited around Lilongwe old airport and Kamuzu international airport (KIA) where the Department of Climate Change and Meteorological Services has measured wind speed at 10 meter height for more than 10 years. Out of the four sites assessed, a place near Luke Daeyang Hospital was identified as potential site. The site is 12 km from Lilongwe; 2 km from the existing grid at Kanengo and the area is bounded by M1 road and the road going to Malawi Institute of Management. The average wind speed was 5M/s at the time of the visit to the site.

Ownership of the land is not yet known but it is suspected that it belongs to Kanengo Northgate Project. Efforts are underway to check with the Commissioner for Lands to determine ownership of that piece of land.  The site is near a hospital, but it is on the wind-ward side so the noise is unlikely to have much effect on the hospital. Adjacent to the hospital is a proposed site for a nursing school, but it is still recommended that the site should be assessed further because it is near to power grid, can easily be accessed by road and both the hospital and the nursing school are on the wind ward side.

Looking at the size of land available, it is recommended that four turbines of 2 MW each can be erected on this site making a total of 8 MW installed capacity. This is based on the fact that the spacing between adjacent wind turbine towers is 7-15 times the rotor diameter. This recommendation is based on the assumption that this piece of land stretches to the east where wind speed is anticipated to be the same.

 – Mzimba

A site in Mzimba was identified at Kanombo Hills, 8 km North West of MzimbaBoma. The site has an average wind speed of 8m/s at a height of 2 metres. The site is 8 km from the existing power grid at Mzimbaboma. The hills are under customary land therefore ownership of the land may not be an issue. Houses are far from the site and therefore there will be no effect of noise pollution on the population.

Based on the same principle that the spacing of wind turbines is done in relation to the rotor diameter, four turbines of 2 MW each can be erected on this site making a total of 8 MW installed capacity.

 – Mzuzu

Kaning’ina Hills were identified as a potential site for installation of wind turbines for power generation. The site has an average wind speed of 9m/s at 2 metres height. It is about 10 km from Mzuzu city and the existing grid.  Kaning’ina Hills are gazzetted under natural forest reserve hence the land is controlled by the Forestry Department. It is situated far from residential areas.

In view of these facts therefore, there will be no noise pollution effect on the population of Mzuzu City. The only problem would be the high cost of constructing access road to the top of the hills to deliver and maintain the wind turbines.

On this site, 5 turbines of 2 MW each can be erected giving a total of 10 MW installed capacity.

 – Chileka in Blantyre

Four sites around Chileka in Blantyre were visited and assessed. Out of the four sites, a place on top of the hills near Andiseni Primary School,  west of Chileka Airport, was identified as a potential site. The site is 20 km from Blantyre and 2 km from the existing power grid. The average wind speed is 3.5m/s.

The Andiseni Hill is under customary land which means ownership of the land for installation of wind turbines may not be a problem at this site. Houses are far from the site and therefore there will be no noise pollution effect on the population around Andiseni Primary School.

Two turbines of 2MW each can be erected on this site making a total of 4 MW installed capacity.

Government says it is implementing a master plan to develop the tourism sector, which involves putting up necessary infrastructure to create a conducive business climated for existing players in the industry and intensifying promotional activities to attract more tourists and investors.

Chief Secretary in the Office of the President and Cabinet, Lloyd Muhara, said at the launching ceremony of this year’s three day Takulandirani Malawi Tourism Expo that the masterplan will be implemented over a period of 25 years and will guide planning, zoning and promotion of tourism investment in the country.

Muhara said as part of the plan, the government has constructed two access roads in the tourism district ofSalima connecting lakeshore resorts to the main road and acquired over 17 hectares of land along the lakeshore for development of public beaches which will act as a model for tourism development along the lake.

He said the Ministry has also upgraded the Kamuzu international Airport with assistance from the Japanese Government through the Japanese International Cooperation Agency (JICA).

The chief secretary also said government is implementing the Promotion of Investment and Competitiveness in the Tourism Sector (PICTS) project with financial support from the African Development Bank (AfDB) to the tune of US$10-million.

Muhara said: “The project seeks to build and strengthen institutional capacity in tourism statistics development and implementation of Tourism Satellite Accounting system for Malawi.”

“This will improve collection of tourism statistics to provide a better case to Government for public funding of the sector.”

The project will also build capacity of 500 Small and Medium Enterprises (SMEs) in the tourism sector through training and provision of loans to the SMEs.

It will as well enhance law enforcement in Kasungu and Lake Malawi National Parks to reduce wildlife poaching and strengthen the Malawi Tourism Council, which is the voice of the tourism private sector so that it serves its members more effectively.

He said the project will involve development of an Eco-tourism strategy to ensure sustainable utilization of Malawi’s unique nature-based attractions, support review of culture legal framework and instruments and develop tourism infrastructure at Chongoni World Heritage site which projects Stone Age rock art.

Muhara explained that with these interventions the project will not only boost Malawi’s capacity to attract foreign investment in the tourism sector but it will also enhance the country’s capacity to satisfy tourism needs.

Malawi’s travel and tourism sector contributes 7.7% to the country’s gross domestic product (GDP).

Malawi’s leading mineral sector consultants Akatswiri Mineral Resources in collaboration with Zomba-based Enviroconsult have successfully completed an environmental and social impact assessment (ESIA) study for oil exploration in Blocks 4 and 5, which are held by prospecting firm Rak Gas MB45.

The study, whose report has been submitted to the Department of Environmental Affairs for approval, involved community consultations in districts covered by the two blocks which include Machinga,        Mangochi, Dedza and Salima, and national consultations in the Capital City, Lilongwe.

Rak Gas contracted Akatswiri and Enviro-Consult to conduct the ESIA in preparation for seismic operations which will be conducted in the blocks to identify oil and gas traps.

Project Coordinator Hilton Banda says: “The seismic studies entail using a vibrator truck that sends a signal from the ground and recording truck to detect sediments and their depth. The technology uses geo phones mounted on the cable that transmits a signal to a computer.”

“There was, therefore, a need to undertake the ESIA to assess the environmental impact of the seismic exploration work and develop an environmental management plan that contains mitigation measures.”

Banda, who is CEO for Akatswiri, explains that the ESIA involved studies on Geology and Soils, Air Quality, Water and Hydrology, Waste Management, Noise and Vibrations, Transport and Energy needs, Flora, Fauna, Fish, Habitats and Land use, Archaeology and Cultural Heritage and Social Issues as key parameters that require baseline assessment in order to determine potential impacts and their mitigation approaches.

Geology and Soils

The Akatswiri CEO, who is a seasoned geologist, explains that the team conducted geological field mapping in which major lithological and soil units were mapped and sampled for subsequent mineralogical analysis.

He says the team recorded systematic measurements of structural features, field relations and cross-cutting relationships and in addition to field mapping they used existing geophysical data to interpret structural features which could not be seen on the ground as the ground is mostly covered by sediments.

The area is overlain by recent sediments of lacustrine in nature and has been affected by rift faulting which defines the Malawi Rift Valley. NE and NS trending faults, and shear zones present in the area may render critical insights into the structures which might trigger potential landslides or earthquakes.

The project site is dominated by the presence of marsh and agricultural soils. The soil fertility status is augmented through fertilisation to sustain crop production, and soils are moderately acidic.

“The impact assessment shows that the proposed project will have a low to moderate impact on the geology and soils in the study area,” Banda says.

Air quality

He says the air quality assessment was intended to characterize the existing environment and identify the environmental and social hazards associated with the seismic activities on air quality, assess the magnitude and significance of the risks (the likelihood of the hazard and the severity of the impact) and provide a description of the proposed control techniques to eliminate or mitigate the likelihood of the hazard or severity of the impact and development of plans / procedures to manage consequences of exceptional events.

“The results from the baseline survey show that levels of the major air quality parameters (total suspended particulate matter, SO2, NO2, CO and H2S) were below the guideline values according to Malawi Standards (MS737:2011) and World Health Organisation (WHO) guidelines. However, in most of the cases, levels of methane were noted to be significant, mainly arising from decomposition of livestock excreta,” he says. 

Hydrology and water quality

Banda says in order to assess hydrology and water   quality, water samples were collected from block 4 and 5 from boreholes, shallow wells, rivers and analyzed for physical-chemical parameters: temperature, pH, Total Dissolved Solutes (TDS), Electrical Conductivity (EC), Turbidity, F-, Cl-, NO3-, SO42-, carbonates, Na, Ca, Mg, Cu, Mn, Zn, K, and total hardness.

“The results were compared to the World Health Organization (WHO) and Malawi Bureau of Standards (MBS) standards to ascertain the water quality. Analysis of the data indicates that the major water quality parameters are deemed within guideline limits indicating that the water is generally unpolluted. The impact assessment shows that the proposed project will have a low to moderate impact on water resources in the study area,” Banda says. 

Waste Management

The ESIA Project Coordinator also assures that the   seismic surveys are not expected to generate waste streams with high environmental and social impact.

The common sources of waste streams pointed out in the study include presence of workforce, seismic survey activities and vehicle maintenance wastes.

Banda says the expected non-hazardous wastes include domestic wastes (garbage and sewage) and effluents, paper, line cables while hazardous wastes include pharmaceuticals, waste oils, spilled fuel and lubricants and used batteries. The potential impact of wastes is deterioration of water and soil quality affecting terrestrial and aquatic ecosystem (fauna and flora).

In mitigation, he says Rak Gas will implement a Waste Management Plan (WMP) in line with Open Government Partnership (OGP) guidelines for waste management (OGP, 1993; 2008).

Banda says: “As far as practicable, Rak Gas will use existing sanitary facilities in the target areas (otherwise mobile toilets should be used). Solid wastes will be segregated at source in terms of recyclable, reusable, biodegradable and non- biodegradable, hazardous and   non-hazardous, or disposal as appropriate. The Seismic Team will make sure that it does not leave behind any solid waste during the seismic activities.”

“Buffer zone distances between water and seismic lines, sanitary and biodegradable garbage pits will be observed as per International Association of Geophysical Contractors (IAGC) guidelines in order to protect the surface water bodies. Non-biodegradable, flammable wastes may be burned and the ashes buried with the non-flammable wastes. This burial should be at least one meter deep, with due consideration to the area’s water table.”

“All hazardous wastes will be isolated and collected for disposal in regulated municipal facilities. Although, the likelihood of major impacts from accidental spills is low, it is recommended to ensure that requirements of oil spill and emergency plans must be met before operations commence.”

Power utility Electricity Supply Corporation of Malawi (Escom) says it is making great strides in its preparations to start importing power from the Southern Africa region through the Mozambique – Malawi Power Interconnector.

CEO Alexon Chiwaya lauded the progress made on   the project after Escom signed five agreements with Mozambique power utility Electridade De Mozambique (EdM) to operationalize the interconnector.

The agreements include; Project Implementation, System Operating, System Maintenance, Wheeling and Power Purchasing.

The project will in its initial phase see Malawi importing 50 Megawatts (MW) from Mozambique.

Chiwaya said: “The signing of these agreements manifests that we are making satisfactory progress in the project.

“The Power Purchase Agreement (PPA) is for a period of five years while the Wheeling Agreement will take 20 years to cover the estimated period for the cost recovery of the investment for the line by EDM and renegotiation will take its course after the agreement period.”

Under the Wheeling Agreement, Escom will be paying EdM for the full cost of investment for the Mozambique portion of the interconnector, and the latter will in turn give Escom rights over the line.

He stressed that, if any other party wants to wheel power through the line, including EdM, appropriate      compensation will have to be worked out to Escom to offset the full cost that Escom will have been paying for the line.

Chiwaya also said though the project is intended to import 50 MW, the power demand-supply balance for Malawi shows that, due to delays in the implementation of major power supply projects in the country in the medium to long-term, Malawi will need to import about 200MW of power from Southern African Power Pool (SAPP) for two to three years after the interconnector is commissioned to cover the projected power supply deficit.

“Kindly be informed that ESCOM has already engaged ESKOM of South Africa on the proposed power imports for a short period of three years and required agreements are being drafted,” he said.

Chiwaya said availability of adequate power through the interconnector will make significant contribution to the growth of economic sectors in Malawi including manufacturing, agro-processing, the service sector and tourism.

He commended both EdM and Escom personnel for tirelessly working on the project preparations and responsible ministers from the two countries for the policy direction.

The CEO also thanked World Bank, German’s KfW, European Union and Norwegian Trust Fund for financial support towards the project.

“Let me assure the financiers and all stakeholders that we will sustain the investment and ensure that Malawi works towards attracting Southern Africa Development Committee (SADC) Member States to trade in power with the country,” he said.

Mozambique’s Minister for Mineral Resources and   Energy, Ernesto Tonela, said he was happy that the project that involved prolonged negotiations between the two countries has culminated into the signing of the necessary agreements.

“We will make sure that Mozambique exports power to Malawi and in future Malawi will also be able to export power to other countries as it connects to the power pool,” he said.

He assured Malawians that though the project will initially be selling 50 MW to Malawi his government is willing to increase supply according to Malawi’s demand.

The scope of the project is to interconnect Malawi-Mozambique power systems at 400kV through              transmission line from Matambo substation in Tete province in Mozambique to Phombeya substation in      Balaka District in Malawi.

The project will by default connect the nation to the SAPP thereby enabling the country to not only buy power from Mozambique but also from the Region.

The total distance from Matambo to Phombeya is 210km with 140km in Mozambique and 70km in Malawi.

The cost of the project is pegged at US$127-million, out of this US$$92-million will cater for the Mozambique side and US$35-million for Malawi.

Malawi, which depends on power generated from its hydro stations on the Shire River, is banking on the           interconnector to solve its power supply challenges emanating from low water levels.

Abstract

Malawi is a land of sunshine and areas of potential for solar energy installation span from north to south along valleys and lake shore region. Chitipa, Kasungu – Lilongwe Plain and the rift valley regions offer a lot of opportunities in investing in solar energy.

Solar energy installation is one way of improving Malawi’s energy mix to foster security of supply. Administrative procedures for obtaining licences and land need to be improved to ease the way of doing energy business. The paper provides initial data for investment decision making.

INTRODUCTION

Malawi continues to struggle to offer reliable and quality power supply. The Electricity Generation Company (Malawi) Limited (EGENCO) has an installed generation capacity of 406.6 MW out of which 335.15 MW is available. There has been a loss of about 165MW due to environmental degradation in the Shire River catchment area leading to low water levels and trash accumulation at hydro power plants.

In order to improve security of supply several solar power purchasing agreements (PPAs) with independent power producers have been signed to improve energy supply mix.

SOLAR ENERGY GENERATION

Solar Energy Generation was initially popularized by Mission Stations in rural areas. Government has installed solar systems in rural trading centres creating solar villages such as Chikweu in Machinga, Kansonga in Ntchisi, and Eswazini in Mzimba.

These targeted mostly key rural facilities such as Health Centers, Community Day Secondary Schools, and Community Halls. Solar Villages involving hybrid systems (Solar and Wind) were installed providing up to 21kW to provide power for a maximum of 150 homes. Even piped water supply systems were served by this hybrid system.

Recently the Japanese Government provided .83 MW of solar installation for electricity generation at Kamuzu International Airport in Lilongwe. Domestic installations are now common as a solution to prolonging load shedding of up to 10 hours experienced in most towns and cities.

Commercial supply of solar power systems are now encouraged.

Success of this initiative requires solar resource mapping so that large installations can be properly located. Detailed information on direct and diffuse radiation, sunshine days and periods of cloud cover help to appropriately size the large power generation solar systems. This solar resource assessment data is essential to understand the magnitude, geographic distribution, characteristics, and variability of the solar resources.

ESCOM is able to generate about 362 MW and has the capacity to accommodate 70MW of renewable energy in its grid. Off grid supplies are also viable.

AVAILABLE SOLAR DATA

The Department of Climate Change and Meteorological Services has recorded solar data for over 30 years using solar recording equipment.

Malawi has the most sunshine hours from April to November. The average annual sunshine hours of 7.5.

The World Bank did some solar resource mapping for Malawi between 2015 and 2018. The assessment was based on satellite-data analysis, global datasets and solar measurement at Chileka, Kasungu and Mzuzu.

There seems to be high levels of photovoltaic power potential in Chitipa, Karonga, Mzimba, Kasungu, Lilongwe, Salima, Ntcheu, Lake Chilwa area, Chikwawa and Nsanje.

The Roads Authority (RA) says it has acquired K1-bilion from the World Bank to carry out maintenance works on roads which were damaged by floods in 15 districts of the country.

Public Relations Officer (PRO) for Roads Authority Portia Kajanga told Mining and Trade Review that the African Development Bank (AfDB) has also shown interest to bankroll the exercise and is still negotiating with the government on amounts to be disbursed and other logistics.

“The damage caused by floods on the country’s road network was quiet big especially in the southern region of the country such that some roads had to be closed and some areas were cut off for a number of days,” she said.

Districts which were heavily affected by floods include Chiradzulu, Thyolo, Mulanje, Phalombe, Blantyre, Zomba, Nsanje, Chikwawa, Mwanza, Neno, Machinga, Balaka, Mangochi, Ntcheu and Dedza.

Kajanga said government already spent around US$866,000 to repair most of the affected roads by providing diversions for World Food Programme to access cut-off areas with relief items.

She said as an emergency response, RA has deployed emergency contractors to provide temporary routes in all areas where roads were washed away.

“Currently we are in the procurement process of acquiring other contractors to grade the roads once we access funding from AfDB,” she said.

She pointed out that among the affected roads, the most important is the M1 Road in Chikwawa which remained cut for about one and a half days which negatively impacted on travel plans for lots of people and organizations.

Kanjanga said the wash-aways on the Makanjira road also affected many people as the road          remained cut for three days before completion of construction of an alternative route.

Besides repairing the roads damaged by floods, the Roads Authority has lined up a number of road projects including construction of the 25.9km Nsanje-Marka Road which is part of a regional route connecting Malawi with the Port of Beira in Mozambique and beyond.

RA also plans to reconstruct and widen the Kaphatenga – Dwangwa Road in Nkhotakota  District and the work will involve replacing single lane and temporary bridges with permanent two lane bridges for the section spanning from Nkhotakota – Bua Bridge.

The other project on the cards is the rehabilitation of the 45km Mzimba – Mzarangwe which is of the key roads in the Northern Region of Malawi.

RA will also reconstruct and upgrade the Chiringa-Muloza road in Mulanje and Rumphi-Nyika-Chitipa road in the northern region which is currently of earth standard and will be upgraded to bitumen Class 1.

Malawi’s public road network coverage by end June 2016 remained 15.451km out of which about 28% are paved and 72% is earth/gravel surface.

Road re-classification studies done in 2016 identified about 9,478km of undesignated road network that serve the rural communities.

Road handles more than 70% on internal freight and 99% of passenger traffic, and more than 90% of international freight and passenger traffic.

Studies indicate that in Malawi, 55% of the costs of production are taken up by transportation costs as compared to 17% of other developing countries.

The condition of paved road network as indicated in a study conducted in June 2014 is 38% good, 40% fair and 22% poor.

Electricity Generation Company of Malawi (Egenco) has described effects of deforestation as the major hindrance to uninterrupted generation of electricity in hydro-plants on the Shire River where Malawi generates 98% of its power.

Speaking at the Role of Trees, Forests and Resilience Symposium in Lilongwe, CEO for Egenco William          Liabunya said effects of deforestation including soil erosion, aquatic weeds and trash disrupt the work of turbines in the reservoirs at the power stations.

“The suspended silt particles lower the volume of the reservoirs and reach the turbines to choke power production operations. They also block the cooling water system machines for the generation units,” Liabunya said.

Liabunya also said climate change related problems such as floods are a big threat to power production saying this year floods that hit the lower Shire affected many generating power stations resulting in power outages for almost a week in the month of February.

He said such occurrences are a stumbling block to the Government in the implementation of the Energy Policy which aims to improve efficiency, reliability and affordability of energy supply systems for socio-economic growth.

Liabunya, therefore, urged the Forestry Department to scale up implementation of the National Forest Policy which aims to control deforestation and promote sustainable management of forests in order to enhance socio-economic development.

He explained that if both the Energy Policy and National Forestry Policy are seriously implemented and harmonized with other policies namely Agriculture and Food Security Policy; National Land Policy; Land Resources Management Policy; Water Policy; Climate Change Policy and National Environmental Policy; deforestation can be prevented which would help EGENCO in sustaining uninterrupted power production.

In its reforestation drive, in January this year EGENCO launched a trees planting exercise at Chibwana Village Traditional Authority Sitola in Machinga district.

By the end of this rainy season, EGENCO plans to plant 25-thousand trees along Shire River and tributaries.

Meanwhile, the Department of Energy Affairs says deforestation is a major concern in Malawi because the country lacks affordable and reliable alternatives to biomass, which is a major source of energy in the country catering for over 80% of the requirements.

Biomass energy is mainly used in water heating (cooking), tobacco curing, brick kilning, wastage in terms of charcoal residues, and in extreme cases of lighting.

In a presentation made at the Trees, Forests and Resilience Symposium in Lilongwe, Principal Energy Officer for the Department Cornwell Chisale observed   that almost all wood fuel and charcoal used for domestic requirements in Malawi is from natural forests which take long to regenerate and also due to frequent harvesting, regeneration is actually impossible.

Chisale, however, said the Department is promoting   alternative sources of energy including electricity (grid electricity and off-grid options including mini-grids), Gas (Liquid Petroleum Gas, natural gas and biogas), Bio-ethanol and Briquettes whose utilization will keep the country free from carbon emissions.

He explained that the drive to promote the alternative energy sources involves sound policy direction; lobbying for tax waivers for clean energy generation equipment, curriculum change to accommodate pro-clean energy subjects; introducing regulations that support clean energy use; and training communities, extension workers and institutions on alternative fuels.

He said the department is also conducting awareness campaigns on biomass utilization technologies through radio advertisements, cleaner cooking camps, open air functions, symposia and panel discussions.

The Department has, meanwhile, embarked on projects to promote alternative energy sources including         Malawi Rural Electrification Program (MAREP) which is extending the national electricity grid to rural areas, National Cook Stove Initiative to disseminate 2-million cook stoves by 2020; and increasing clean and affordable decentralized energy services to selected vulnerable areas of Malawi project which is to promote clean energy mini-grids as a means of electrifying rural areas.

Malawi is, currently, importing 3MW of power from Mozambique through Mandimba to Mangochi and 20MW from Zambia through Chipata and Mchinji.

The country is in discussions with Tanzania to import gas through Karonga to support the development of a 100MW Gas Fired Power Plant either to be operated by EGENCO or an IPP.

LAND AND ITS PEOPLE

Malawi is situated in south-eastern Africa and shares its boundary with Mozambique, Zambia and Tanzania.

The country occupies an area of 118,484 square kilometres and has a population of nearly 18 million.  About 20% of the population lives in urban areas.

The main official languages are English and Chichewa.  The warmth and hospitality of the Malawi people earned the country a name “The warm heart of Africa”.

His Excellency the president, Dr. Arthur Peter Mutharika, acknowledges the need to diversify the economy of this country through the development of the mineral sector. The investor is encouraged to venture into this sector which already consists of a disciplined mining labour force that has wide experience from South Africa, Zimbabwe, Zambia and Tanzania.

ECONOMY

Malawi has an open economy and the government’s role is to facilitate and regulate private investment to increase current mining contribution to GDP from 3% to 20%.

Malawi government’s pursuance of stable macro-economic policies by exercising fiscal and monetary discipline has encouraged the stabilisation of the Kwacha currency and the decrease in inflation rate from of 21.8 percent in 2016 to a current figure of about 9%.  The Kwacha is now one of the most stable currencies in Sub-Sahara Africa. Mining will contribute substantially this year from post Kayelekera Growth Domestic Product of 1% to about 4% due to increased activities in exploration and mining.

Malawi’s prudent economic management supported by more transparency in tracking revenue and expenditure has led to reduction in bank interest rates from 25% in 2018 to a current 15%.

EXPLORATION AND MINING OPPORTUNITIES

Exploration work continues to intensity since the 2013 – 2014 national airborne geophysical survey identified potential exploration targets for gold, platinum group metals (PGMs), nickel-copper-chrome, rare earths, bauxite, vermiculite, kimberlites, sulphide-gold-graphite, base metals and coal-uranium-petroleum.

Geological maps, magnetic contour maps, radiometric maps, electromagnetic maps, airborne geophysical interpretation maps are available at Geological Survey in Zomba.  These offer excellent support to exploration activities.

Minerals which require feasibility studies include Linthipekaolinitic clay, Mchinji and Lake Chiuta glass sands, Tengani and Lake Shore heavy mineral (titanium) sands,Kangankhunde rare earths (monazite), Chimutu graphite andMalingunde graphite, Tundulu rock phosphate.

Bankable Feasibility Studies are being done for Mabulabo niobium deposit (Mzimba), Songwe Rare Earths (Phalombe) and Malingundesaprolite graphite (Lilongwe).

Mining activities include coal in Rumphi and Karonga, Limestone for cement production in Kasungu and Mangochi; and semi-precious stones in Ntcheu, Mzimba, Rumphi, Chitipa, Mangochi and Chikwawa (corundum, aquamarine, amethyst and agate).

Kayelekera Uranium Mine is under Care and Maintenance since June 2014. Construction of nuclear energy plants in China, India, United Kingdom and United States of America are giving hope to increased demand for uranium and improvement of prices.  This gives hope to reopening of Kayelekera mine in the near future.

ATTRACTIONS

Government no longer neglects exploration and it has increased exploration expenditures.

Malawi has a new Mine and Minerals Act (2018) replacing the 1981 Act. A mining taxation Act was enacted in 2016 and offers a stable regime for 10 years to support the new Mines and Minerals Act.

The legal framework now adequately defines the investor’s rights and obligations to encourage community benefit sharing within a radius of 20 km.

Security of tenure is guaranteed to give maximum security to the investor e.g. protection against loss of mining rights. The Mining Cadaster system has been put in place to firm up accountability and transparency in grant of mineral rights. Malawi is member of Multilateral Investment Guarantee Agency (MIGA) and subscribes to International Centre for Settlement of Disputes.

Access to foreign exchange and repatriation of capital and profits are guaranteed after satisfying tax obligations.

Government continues to provide basic geological, legislative, economic and fiscal data.

Minimum ministerial discretion is practiced thanks to a capable Minerals Licencing Committee under the Comissioner of Mines and Minerals. Malawi continues to improve its road and telecommunication networks INSTITUTIONAL SET UPTHE MINISTRY OF ENERGY AND MINING:- This is responsible for broad policy direction on mining and legislation. It coordinates with other ministries on minerals, energy and mining issues. DEPARTMENT OF MINES:- It issues licences and administers exploration and mining licences.  It compiles production statistics and inspects exploration, mining and environmental work compliances. GEOLOGICAL SURVEY DEPARTMENT:- This undertakes reconnaissance geological mapping and mineral exploration.  It publishes geological bulletins, maps, and technical reports.  It is also responsible for compilation and maintenance of geological data base. MALAWI INVESTMENT ANDA TRADE CENTRE:- Other support institutions include Malawi Investment and Trade Centre (MITC) which helps register companies and negotiates investment incentives for the companies thereby streamlining the investment process.

Malawi has engaged the Commonwealth Secretariat to provide technical assistance in developing the upstream petroleum sector following encouraging results that have emerged in oil and gas exploration across the country.

Multinational firms are conducting exploration for oil and gas in Malawi focusing on the country’s stretch of the African Rift system, which is an area with proven potential for oil and gas discoveries.

Government demarcated the stretch into six prospecting blocks and awarded Block 1 located in Chitipa and part of Karonga to South African firm EFORA Energy formally SacOilHOldings, Block 2 and 3 in Karonga, Rumphi, Nkhatabay and NKhotakota to Hamra Oil, Block 4 and 5 located further South covering Dedza, Ntcheu, Mangochi, Machinga, Mulanje, Phalombe and Blantyre to RakGas MB45 and Block 6 located in the Lower Shire Valley area to Pacific Oil and Gas.

Results from exploration work by Hamra Oil and RakGas have indicated great potential for oil discovery in Malawi.

“As a nation, we are very excited with the incoming results from oil exploration work being conducted by these tenement holders.  The likelihood of finding commercial petroleum discoveries in these potential sites is high with average values in the range of 16.8% – 20%, exceeding the typical international oil industry threshold of 10%,” says Head of Oil and Gas Desk at the Department of Mines in the Ministry of Natural Resources, Energy and Mining, Cassius Chibambo.

Chiwambo says the government has, therefore, resolved to re-engage the Commonwealth Secretariat to provide technical assistance in the development of a regulatory framework that will ensure that there is a win-win situation between Malawi as a country and the investors when oil is discovered.

He says a delegation of the Commonwealth Secretariat already visited Malawi for a scoping mission which was conducted from January 28 to February 1, 2019 as a first step in responding to Malawi Government’s request to provide technical assistance for the Oil and Gas upstream sub-sector.

The Malawi Government, specifically, requested for technical support in the following areas: Review of            Petroleum (Exploration and Production) Act of 1983;finalisation of the development of Petroleum Policy; developing a model petroleum sharing agreement (PSA); re-negotiation of the PSA that it signed with RAKGAS; development of a community engagement strategy; and capacity building.

Delegates from the Commonwealth Secretariat led by Victor Kitange, an Economic Advisor and AlacheFisho, a Legal Advisor held meetings with officials from the Oil and Gas team led by Chiwambo who briefed them on the status of the activities in Malawi.

They also met the Minister of Natural Resources, Energy and Mining AggreyMasi and other officials from his Ministry, and also officials from Department of Mines; Geological Survey Department; Ministry of Finance, Economic Planning and Development; Ministry of  Justice and Constitutional Affairs; Environmental Affairs Department; National Oil Company of Malawi (NOCMA); Ministry of Foreign Affairs and International Cooperation; and Ministry of Trade and Industry.

“In all the meetings conducted, participants were requested for their inputs in order to make the scoping mission comprehensive enough for successful implementation of the technical assistance,” says Chiwambo.

Some of the issues raised during the scoping mission include the need to have robust environmental management framework as most of the citizens have fears over Oil and Gas exploration and production activities.

It was also observed that there is lack of relevant work experience since the petroleum sector is just new in the country, as such there is need for trainings to enable civil servants and other stakeholders manage the petroleum sector.

“On the issue of reviewing legal framework, it was stressed that the essence is to ensure best practices in the sector so that the country is fully benefiting from the petroleum operations,” he says.

Some of the issues that are being reviewed in the Act include; licensing procedures, PSAs, and environmental management.

Chiwambo says that after the Petroleum Policy is developed, drafting sessions for the Petroleum Act will be intensified and the Ministry of Justice will need some support from Commonwealth.

He explains that though the Petroleum Policy is in the final development stages, the Petroleum Act will address issues stipulated in the policy as such the policy has to be finalized before drafting the new Act.

Previously, the Economic and Legal Section of the Commonwealth Secretariat provided technical assistance for the development of the Draft Petroleum Policy, which started with a situational analysis of the country’s Oil and Gas Sector.

Secretary for the Ministry for Natural Resources, Energy and Mining PatrickMatanda is quoted in the Draft Policy as saying that through this expert analysis, the problems and gaps in the upstream petroleum sector were identified, which assisted in the drafting of the policy.

“The draft policy was formulated through reviewing of policies from other countries particularly those sharing similar geological setting as Malawi, extensive consultations with various stakeholders including other government institutions, local authorities, private oil companies, civil society organisations and the academia,” says Matanda.

Among other grey areas identified in the Draft Petroleum Policy is the failure by the government to recruit the Commissioner for Petroleum Exploration and Production.

The Policy reads: “The current Petroleum (Exploration and Production) Act provides for the Minister for Natural Resources, Energy and Mining toappoint a Commissioner for Petroleum Exploration and Production within the Ministry to administer the Act. The post has never been filled and the functions of this office have been performed by the Commissioner for Mines and Minerals and the Department of Mines.”

“Thus, the oversight, development and delivery of an upstream petroleum policy in Malawi fall within the remit of these offices. But when it comes to the broader energy policy, the Commissioner for Mines and Minerals and the Department of Mines would work with the Department of Energy.”

The Draft Policy also points out the need to clarify the role of the National Oil Company of Malawi (NOCMA) which was established under an Act of Parliament and empowered to promote upstream and downstream petroleum activities.

“There would be need to clarify the exact functions and powers of NOCMA to ensure that they are not in conflict with those of the Geological Survey Department regarding oversight of petroleum exploration,” it reads.

The new law is expected to give NOCMA the mandate to manage government’s interest in oil production investments with preliminary proposals indicating that the parastatal will have at least 20% shareholding in the investments.

In a meeting with the Commonwealth delegation, CEO for NOCMA, Gift Dullah, recommended that relevant personnel from his organization, GSD and Departments of Mines acquire necessary training by, among other things, visiting countries that are doing well in the oil and gas field like Norway and Nigeria.

He said it is important that Malawi works on capacity building in the subsector to ensure the investment decisions are done properly in the field so that adequate returns are accrued for the nation.

Dullah also stressed the need for local content by ensuring that the oil ventures are buying local resources and where possible employing capable local people.

He said NOCMA is, currently, working with Malawi University of Science and Technology to introduce relevant courses in the field of petroleum.

Comsec is also expected to initiate communication with other countries to help in terms of training.

The Draft Policy has a section on local content which it highlights as a path to development through petroleum activities in addition to a sound fiscal regime that ensures sufficient revenue collection.

“Oil and gas companies, when purchasing goods and services for their operations, should be required to give first preference, at comparable quality, delivery schedule and price, to goods produced locally and services provided by Malawian citizens, or businesses, subject to technical acceptability of the relevant goods and services in the country,” reads the Policy.

It also calls for the participation of Malawians and Malawian companies in oil exploration, exploitation and related sectors.

The Policy provides opportunities for local companies to buy stakes in oil ventures and NOCMA to buy additional shares in the oil investments.

The Draft Policy also recognizes the need for the oil companies to carry out corporate social responsibility (CSR) programmes and sign community development agreements (CDA)with the communities in their respective project areas.

The Policy statement reads: “Government shall include CSR and CDA requirements in all contracts and in the petroleum legislation, encourage CDAs between the oil companies and affected communities, consider CSR history of companies when awarding contracts and encourage the participation of civil society organisations in oil exploitation issues.”

It says government shall also train or hire monitors to oversee the fulfillment of CSR and CDA obligations, impose stiff penalties for non-compliance, and engage international experts in the development of minimum requirements for CSR and educate local communities on the companies’ responsibilities.

In the drafting session, the Ministry will need capacity in the following areas; legislation drafting or second eye, vetting of the drafted legislation, and contract negotiation.