Mining & Trade News

In the wake of a rising number of accidents that are resulting in loss of lives of Artisanal and Smallscale Miners (ASMs), experts have tipped the Malawi Government on how to address occupational safety, health and environmental (OSHE) risks dogging the ASM subsector.

Mining industry expert James Chatupa observes that the lack of a coordinated regulatory framework is a key factor fueling ASM safety and environmental challenges stressing that institutions such as the Ministry of Mining, the Department of Environmental Affairs, and the Malawi Police Service are not working effectively together to monitor and enforce regulations.

“There is a major issue with how data on OSHE is collected. Most of the data is informal and lacks a structured database, making it difficult to track down the scale of the problem and develop targeted solutions,” says Chatupa, who is a veteran geologist and MD for local geological consultancy firm Craton Resources.

He also says the exclusion of ASM from mining reserved minerals is one of the reasons miners resort to illegal activities as it forces miners into dangerous and unregulated environments, which directly contributes to fatalities.

Chatupa calls on the Government to expediate the process of decentralizing mineral licencing activities.

He says:“There are already mandatory provisions in the Mines and Minerals Act, 25 of 2023 and in the Local Government Act of 1998. There is scope of taking the granting of the Artisanal Mining Permits to Chiefs/Village Heads. This would facilitate collection of data of ASM activities. The Village Head would charge the licencee a fee as instructed by the District Council.”

“The Chief would retain 50% of the fee to cover own expenses and send the other 50% to the DC, with a record showing the entity licenced, GPS location, commodity being mined and estimate of amounts to be mined. The Mines Department officers at the DC would compile the records for subsequent analysis. It would also be possible then for the technical officers to assess risks and provide advice to the miners, as a way of reducing accidents.”

Chatupa also bemoans the widespread use of mercury in gold extraction by ASM, often without any safety measures; which is exposing miners to toxic fumes and increasing the risk of respiratory diseases, including tuberculosis.

“Miners often work in poorly designed tunnels or caves, and without proper training and personal protective equipment, they use dangerous chemicals and equipment. This leads not only to fatal accidents but also to long-term health problems,” he said.

He also suggests linking ASM cooperatives with larger mining companies to provide guidance and ensure sustainable practices.

“By formalizing ASM operations, we can reduce environmental and financial losses, and even create more jobs for communities,” Chatupa said.

Biswas Ismael of the Natural Resources Justice Network, an umbrella body of civil society groups working in the extractive sector in Malawi, expresses concern over the deteriorating security situation in ASM hotspots such as Makanjira in Mangochi, where armed foreign nationals are reportedly engaging in illegal mining and destroying land.

“These illegal miners are often armed, and local communities are unable to stop the destruction of their land and resources. The government’s efforts to regulate mining are simply not enough.” Ismael says.

He also recommends that the Reserve Bank of Malawi, which is buying gold from ASMs thorough its structural market programme being implemented by its subsidiary Export Development Fund,  invests in OSHE projects to improve the working conditions of miners and reduce the negative impacts on the environment. Ismael emphasizes the importance of stronger laws that focus on the welfare of people and the environment rather than profit.

“We need comprehensive and enforceable laws that not only address illegal mining but also promote sustainable mining practices that protect both the workers and the land,” he said.

Director for Mines and Minerals Regulatory Authority Samuel Sakhuta reportedly admitted to Mining & Trade Review that enforcement of OSHE regulations in ASM operations has been ineffective, with illegal miners constantly finding ways to circumvent the law.

“We need to be more proactive in curbing illegal mining and ensure that law enforcement agencies are properly resourced to deal with the problem,” Sakhuta said.

In a recent tragedy in Nkhotakota, nine small scale gold miners were killed in a cave-in at an illegal mining site. The miners, who had entered the cave near the Bua River, were reportedly from Chief Kapichira’s area. Deaths of miners due to accidents have also been reported in a number of other ASM.

By Marcel Chimwala

ASX-listed resources firm Sovereign Metals has announced that it has successfully completed the mining trials stage of its Pilot Mining and Land Rehabilitation Program (Pilot Phase) at the Kasiya Rutile-Graphite Project in Lilongwe, Malawi.

Hydraulic mining trials at Kasiya were successfully concluded as part of the Kasiya Optimisation Study. Prior to the hydraulic mining trials, a dry mining trial successfully excavated a test pit to a depth of 20 metres. The mining trials confirm that the soft, friable Kasiya ore can be efficiently mined.

MD and CEO Frank Eagar commented in a Press Statement: “I am pleased with the results of the mining trials at the test pit and now look forward to the rehabilitation demonstration stage, with the backfilling of the pit already underway.”

“Our findings from this Pilot Phase are continuously improving our understanding of Kasiya and how to optimise operations at this genuine Tier 1 project.”

Eagar reports that following the conclusion of mining trials, land rehabilitation demonstrations are now underway commencing with the backfilling of the test pit.

The test pit, which was excavated using conventional dry mining techniques and a simple mobile excavator fleet, covered an area of 120 metres by 110 metres and was mined to a depth of 20 metres through the weathered ore at Kasiya.

Eagar reports that mined material is being placed back into the pit and all areas will be graded. The backfilling stage is expected to conclude in December 2024.

He says as part of the Pilot Phase, the Company has constructed small rehabilitation demonstration pits that will be used to demonstrate various rehabilitation processes.

“Sovereign’s objective is to restore land after mining to conditions that achieve the same or better agricultural yields than prior to mining operations,” he states.

The Pilot Phase will demonstrate to local communities the successful rehabilitation of land for agricultural use post-mining. Eagar explains that results will also allow Sovereign to determine optimal approaches, providing critical information for Kasiya’s Environmental and Social Impact Assessment.

Eagar says: “Sovereign remains focused on becoming a leading global supplier to the titanium and graphite industries. Kasiya is the world’s largest natural rutile deposit – the purest, highest-grade naturally occurring titanium feedstock – and the world’s second-largest flake graphite deposit – a battery mineral essential for the energy transition.”

Fraser Alexander, a global industry leader in hydraulic mining, conducted the trial which commenced in August.

The dry mining trial confirmed Kasiya can be efficiently mined to depth using standard mobile excavators and trucks.

The Pilot Phase program continues to progress with oversight from Sovereign-Rio Tinto Technical Committee.

Rutile

Rutile is the purest, highest-grade naturally occurring form of titanium. Kasiya is the largest rutile deposit in the world with a Mineral Resource Estimate of 1.8Bt at 1.0% rutile resulting in 17.9Mt tonnes of contained natural rutile.

Titanium is found in nature in two main feedstock forms. Natural rutile (95%+ TiO₂), which requires little-to-no beneficiation from its natural form and Ilmenite (30-60% TiO₂), which requires energy and is carbon-intensive upgrading before it can be used in titanium metal or pigment production.

Rutile is the preferred feedstock for the high quality-titanium industry. Titanium serves a range of industrial markets due to its remarkable properties. Titanium is highly corrosion resistant and chemically inert while offering a high strength-to-weight ratio. In its form as titanium dioxide, titanium feedstock is also essential for pigment manufacturing, for example in paints and paper.

In its metal form, titanium is as strong as steel, but 45% lighter, and twice as strong as aluminium, but only 60% heavier. As a result, the metal is used extensively in aerospace, defence, healthcare, and technology applications.

Current sources of natural rutile are in decline as several operations’ reserves are depleting concurrently with declining ore grades. These include Sierra Rutile in Sierra Leone and Base Resources’ Kwale operations in Kenya.

Additionally, global rutile supply is projected to decline sharply beyond 2023 and there are limited new deposits forecast to come online, meaning supplies of natural rutile are likely to remain in extreme structural deficit.

Despite being the preferred feedstock for the higher-quality titanium product industry, due to its scarcity, natural rutile accounts for only 5% of global titanium feedstock supply. This scarcity has prompted the titanium industry to develop upgraded feedstock products from lower-grade ilmenite that can be used as substitutes.
 

This high-energy and carbon-intensive process essentially removes iron oxide from the ilmenite feedstock to produce upgraded synthetic rutile and / or titania slag.

An independent, peer-reviewed, ISO-compliant life cycle analysis estimated a global warming potential of 0.1 tonnes CO₂-equivalent emitted per tonne for Sovereign’s natural rutile product versus 2.0 t CO₂-equivalent per tonne for titania slag production in South Africa and 3.3 t CO₂-equivalent per tonne for production of synthetic rutile in Australia..

“Switching supply to Sovereign’s rutile product would be equivalent to emissions saved from taking approximately 140,000 internal combustion engine cars off European streets per year,” states Eagar.

 Kasiya has a minimum production life of 25 years.

Graphite

Graphite is used in multiple industries, but demand in batteries is the high-growth area. As the anode in lithium-ion batteries, graphite can be up to 50% of an electric vehicle battery’s volume.  In 2022, 3.6 million tonnes of graphite was consumed, with the battery sector accounting for 22.1%. By 2033, overall demand is forecast to reach 8.1 million tonnes, with battery’s share rising to 55.7% ; according to Fastmarkets.
 
Graphite is mostly processed into active anode material in China which dominates the supply chain, with almost 100% of European anode material originating in China.

With Kasiya’s natural graphite being suitable for the manufacture of active anode material, the Project is set to become the largest secure long term source of supply outside of China, producing natural graphite at an industry-low operating cost.

by Wahard Betha

The Malawi Government has hailed the sixth Malawi Alternative Mining Indaba describing the meeting as a platform for unlocking some of the challenges facing the sector as well as hidden opportunities.

The two-day event which took place in Mangochi under the theme 'Unlocking Malawi’s Potential: Sustainable Mining as a Pathway to Inclusive Development' pulled together stakeholders including: government and private sector officials, civil society organizations, traditional leaders and, Artisanal and Small-scale Miners (ASMs).

Minister of Mining Principal Secretary Principal Secretary responsible for Regulations Martin Kaluluma Phiri, who delivered a keynote address at the Indaba on behalf of the Minister of Mining said this year’s theme aligns with the aspirations of the Malawi Vision 2063 as well as Government’s Agriculture, Tourism and Mining (ATM) strategy.

He said: “As a country, we have made notable strides, including the establishment of the Mining and Minerals Regulatory Authority and the National Mining Company.”

“We also continue to make considerable progress in the identification of additional mineral resources as we continue to collect mineral data through the Department of Geological Survey and other partnerships.”

“However, the sector is not without challenges. The sector’s contribution to Gross Domestic Product (GDP) remains at a mere 1%, largely driven by considerable illegal mining and hidden outputs/earnings, limited market access, environmental degradation, and limited mechanization.”

“These issues not only constrain growth but also hinder the sector’s ability to contribute meaningfully towards national development.”

Phiri, therefore, explained that the sector requires urgent attention in some areas including: capacity building for local investors; sustainability and environmental stewardship; youth empowerment and gender inclusion and; participation in regional initiatives.

He also reiterated on the need for collaboration among key players to put to an end some of the challenges crippling the growth of the industry.

Phiri said: “Unlocking Malawi’s mining potential requires collaboration. The government cannot do it alone. We need the expertise from the academia, the advocacy and partnership of civil society, the investment of the private sector, and the voices and vigilance of our communities.”

“Platforms like this Indaba provide the opportunity to bridge these gaps and create synergies that drive meaningful change.”

“At the same time, the Ministry is committed and stands ready to strengthen law enforcement mechanisms and to ensure the legal frameworks governing mining are clear, enforceable, and inclusive.”

“Through platforms like this Indaba, we can identify gaps, recommend improvements, and build partnerships that enhance accountability and compliance and; together, through patriotism, whistleblowing, and collaborative action, we can transform our mining sector into a pillar for prosperity and inclusivity driven by integrity.”  

Country Director for NCA-DCA Malawi Joint Country Programme Stephan Jansen called on the Ministry to take a quick action in dealing with some of the appalling stories covering the sector that are widening the inequality gap.

Jansen cited issues of corruption, weak regulations, and poor contract negotiation practices that rob the nation’s wealth.

“The common stories of Makanjira’s mineral rich Namizimu Forest illegal mining, environmental degradation, and the absence of community benefits reveal a failure to protect Malawi’s heritage. The depletion of our natural resources without value addition only widens the inequality gap. Minerals shipped abroad unprocessed benefit foreign companies while leaving local communities in Malawi in poverty,” he said.

The Indaba was organized by NCA/DCA in coordination with Oxfam Malawi, Action Aid Malawi, the Natural Resources Justice Network, the Catholic Commission for Justice and Peace, Evangelical Association of Malawi, and Malawi Economic Justice Network. 

ASX-listed resources firm DY6 Metals through its local subsidiary Green Exploration has donated assorted learning materials worthy K3.75 -million to Nambazo Primary School in Phalombe District.

The donation comprises notebooks, chalk, text books, dusters, staple machines, staples, note books, ball pens, pencils,  teaching scheme pads and reams of A4 printing paper.  

The Company, which is prospecting for rare earth elements at Tundulu Hill in the District, has made the donation as part of its corporate social responsibility for the area which involves supporting the community in different sectors including education.

DY6 Country Director Troth Saindi explained that the Company made the donation after receiving reports from the school that it is in need of various learning materials.

“Located in the outskirts of Phalombe, the school is short of various learning materials. We, therefore, thought it wise to donate these learning materials which will assist learners in their studies,” Saindi said.

He said DY6 decided to aid the school understanding that as a corporate citizen of the area, it has a role to assist the school since government only cannot meet all the requirements of the institution as it has plentry of commitments to fulfill.

In his remarks, Nambazo Primary School headteacher Tenson Chilungamo Masamba thanked DY6 for making the donation though it is only doing exploration and has a long way to go before considering to invest in mining.

“We are grateful to DY6 for this donation which will assist the teachers to perform their duties without difficulties and also reduce problems for the learners in their day to day studies,” he said.

Masamba, however, called on well-wishers to consider building teachers’ houses and school blocks at the school.

He said: “We have over 3,000 learners at this school against only 30 teachers. Again, there are no enough classrooms at this facility.”

“We plead to DY6 and other well-wishers to consider assisting in order to create a good learning environment for the learners so that they succeed in their studies.”

DY6 exploration work at Tundulu DY6 has just reported exciting results for its exploration work for rare earths and phosphate at Tundulu where a total of 63 metallurgical samples were collected from 37 sample locations along high-grade historic trench (TUTR10). DY6 Chairman Daniel Smith says in a Press Statement that sampling results returned up to a high of 3.35% Total Rare Earth Ore (TREO) and 27.5% Phosphorus pentoxide (P2O5) over the sampled 83m length of trench TUTR10.

He says: “An exciting component of the sampling results is the average HREO, being 13% of the TREO basket.”

“Undetectable to very low levels of deleterious elements including mercury, lead and cadmium in the phosphorus (P) rich rocks confirms the exceptional grade quality of the phosphate at Tundulu; and the sampling is representative of the mineralised Bastnaesite and Apatite carbonatite rock types exposed within the trench.”

Smith reports that selected samples are being collected to form a 150kg composite to be sent for metallurgical analysis while five bioavailability composite samples were also taken across various historical trenches at Tundulu, targeting phosphate-rich rocks, to determine the solubility of phosphate in the samples and understand its potential for direct fertilization.

Tundulu is formed of several hills in a ring around a central vent called Nathace Hill where majority of the historic surface sampling and drilling was undertaken. The predominant geology at Nathace Hill is REE apatite hosting carbonatites and feldspathic breccia and comprises a large inner agglomerate vent. Mineral rich carbonatite also occurs at Tundulu Hill east of Nathace and Makhanga Hill west of Nathace and is previously unexplored and prospective for REEs and niobium mineralisation.

By Wahard Betha

The year 2022 will forever be ringing bells in the mind of Esnart Chilimba, an impoverished woman in the area popularly known as Mfulanjovu in Group Village Head Masenjere’s area, Traditional Authority Chanthunya in Balaka district.

2022 is the year Chilimba lost her 10-year-old son, Daniel, who fell into a trench filled with water which is about 50 meters away from her house.

The trench was abandoned by an unknown mining company believed to be owned by a Chinese national who came into the village looking for gemstones.

Chilimba narrates her ordeal: “On this day, I left home at around 4.00am to do business and came back at around 2.00pm. When I was approaching home, I saw the people at the dam.”

“Before getting there, I asked what happened because I sensed something. It is when I was told that Dan fell into the pit in the morning. I just threw away what I was carrying and rushed there because people were searching for him but they could not find the boy. Later on, he was found floating at the other side of the second dam.”

“We reported to police and they came with health experts who confirmed to us that he died of suffocation.”

“I still cry till today because I lost a son, I had hoped that one day would grow up and support me.”

Even though Chilimba together with the chief of the area reported the incident to the company owners, no any support was given to them with no representative of the company showing up at the funeral. 

With tears coming down her chicks, Chilimba said there is no compensation she can ask for that can be compared to the life of her son but only pleaded for well-wishers to fill the trenches to avoid similar cases occurring.

Chief Kamifa of the area told Mining and Trade Review that the Chinese investor came with two Malawians who were assisting him in negotiating with the community on issues they never fulfilled.

For instance, Kaimfa said the owner of the land where the mine is located demanded MK8-million compensation but the investor only paid MK500, 000. 

Kaimfa explained: “I received a report to say a certain Chinese national through two Malawians have found minerals and they have already agreed with the owner of the land. I asked them if they had already got approval from our Group Village Head Masenjere, the T/A or District Commissioner of Balaka because this could not be handled by me only without the knowledge of my seniors.”

“I went to introduce them to the T/A and GVH but for the DC of Balaka they went there alone,”

“Our concern dwelled on how they will mine the area, being close to houses and also in terms of rehabilitation after mining. The promised to respond to the concerns but never did.”

 “They just started mining and at first they were using people with hand held holes but later on we started hearing sounds of some heavy machinery. When we visited the site, we saw an excavator. We were told they had hired it to speed up the work as high-quality stones were at a depth.”

Kaimfa said after some months, the two locals who were working with the Chinese investor told the chiefs to write a letter listing developments they want as part of corporate social responsibility, which would be delivered to their boss.

The villagers submitted the letter but nothing was done, something which forced the community to ask the company stop mining until its promises to the community are fulfilled.  

Kaimfa said: “Consequently, they removed their equipment from the site during night leaving only an excavator which we tried to detain but later released it after learning that it was not the property of the Chinese investor as it was hired from another company.”

“The Chinese investor left the area unattended and we hear some reports that he is in Zambia. We reached out to the DC but we were told they are not unaware of the investor.”

A letter dated August 8, 2022 indicates that the local community wrote the invrstor to construct a health center, school blocks for standard 1 to 3 and drill boreholes.

Mining & Trade Review tried to interview Ministry of Mining and Balaka district officials to confirm the development but both parties told us that they are unaware of the investor.

In a related incident, two illegal miners died after being buried into in tunnel in which they were extracting gemstones in Group Village Headman Mponda in the same district.

Commenting on such incidents on Mining Review readers Forum, seasoned geologist and mining expert James Chatupa proposed the formulation of regulations for recording mining related accidents. 

Chatupa said: “I propose we should formulate mandatory regulations for recording mining and mineral exploration accidents, so that we can learn sensitise mining communities on how to minimize such tragedies.”

“This should be supplementary to the labour laws that we already have. That is what they have in the South Africa Customs Union countries.”

National Coordinator for Natural Resources Justice Network (NRJN), Kennedy Rashid concurred with Chatupa saying the country currently does not have an accessible database on mine accidents

“Indeed, we do not have a consolidated public database on mine accidents. I would recommend to have one even online,” said Rashid.

Despite numerous efforts by the Ministry of Mining to regulate the mining sector to ensure it benefits the country at large, illegal mining is still rampant in many districts across the country.

The story of Chilimba is one of several ills of this practice impacting impoverished people in mining areas while the mining investors are chewing riches of their soils in the world’s financial capitals.

By Marcel Chimwala

Mwalawanga Mining, a local firm which holds a mining license for Chimwadzulu corundum deposit in Ntcheu, says it has successfully worked with stakeholders including the Malawi Police Service, Ntcheu District Council, traditional leaders and members of the local community to kick out illegal miners and restore security at the mine.

“This collaborative effort was successful in removing unauthorized personnel and has significantly improved the overall security environment at the mining site,” says Operations Manager for Mwalawanga Omar Reza Abdeen in an interview.  

Abdeen describes the development as a relief for the company explaining that Mwalawanga has encountered repeated incidents of illegal mining, threatening company assets, workforce safety, and operational efficiency.

“Despite stringent internal security protocols, the persistence of illegal miners in surrounding areas posed ongoing security and operational risks,” he says.

Abdeen explains that the company could not commence rehabilitations of mine infrastructure and move in mine machinery due to this serious security lapse though the Environmental and Social Impact Assessment report for the operations of the mine had just been approved in April 2024.

He says: “A number of potential development partners had been let down by the escalations of illegal miners as they all felt that the government and the community had not created a conducive environment for the company to attract any partners to develop and operate the mine.”

“The illegal mining activities had also led to vandalism of mine infrastructure as well as destruction of all access roads within the mine.”

Following a request by Mwalawanga Management to the Ministry of Homeland Security Affairs, a crucial meeting was held at Chimwadzulu Mine Premises on the September 24, 2024. This meeting which was chaired by the Ministry of Homeland Security was attended by various stakeholders from the Ministry of Homeland Security Headquarters in Lilongwe, National Police Headquarters in Lilongwe, Ntcheu Police Station, Regional Police, Ntcheu District Council, Traditional Leaders and the Company representatives.

The objective of the meeting was to engage the stakeholders following a series of escalation on illegal mining activities at the mine that had resulted in total destruction of the entire surface area of the mine site and vandalism of mine structures.

Among other objectives of the meeting was to find modalities of ensuring the safety of the investor (licencee), establish a good working relationship between the company personnel, the police and the community leaders including the community members and help prevent mine encroachment and illegal mining activities so that the mine could develop for the benefit of all stakeholders.

During the meeting, a number of resolutions were made that included; the need for the local leaders to ensure that community members are immediately removed and condoned off from mine area so that the development of the mine can commence; the need for the company to ensure that local people surrounding the mine benefit from employment;  ensure that there is a proper signed agreement between the company and the community on the benefits from the mine; and above all establish a Police Unit right at the entrance of the mine to help safeguard the area.

PROGRESS SO FAR

Abdeen explains that as of October 28, 2024, there has been some fruitful improvements at the mine site in terms of the security situation in that the Malawi Police intervened to restore order and protect company assets.

The Police conducted a series of well-organized operations to clear illegal miners in and around the mine (licensed) area.

Abdeen reports that increased police presence and frequent patrols have established a strong security presence, deterring unauthorized entry.

The Police, in collaboration with Mwalawanga Mining Ltd, also engaged local leaders and communities to raise awareness about legal consequences and promote lawful activities.

By a Correspondent

Lindian Resources Ltd, an ASX-listed Australian company with world-class rare earths and bauxite assets, on Friday handed over the newly constructed Chanthunya Police Unit to the local authorities in Balaka.

Lindian plans to move into the next phase of mining of the Kangankunde rare earth in Balaka next year.

CEO Alwyn Vorster said the donation underscores Lindian's commitment to community engagement and social responsibility.

He said Chanthunya Police Unit is designed to provide a secure environment for both the local community and Lindian's operations, and aligns with Lindian's Community Engagement Plan, demonstrating the company's dedication to safety, community development, and corporate social responsibility.

"We are proud to contribute to the safety and well-being of the Chanthunya community," said Vorster, "This police unit represents our commitment to fostering mutual trust and cooperation, economic growth, and improved livelihoods."

Lindian Resources is committed to contributing to Malawi's economic growth through its mining operations, aligning with the government's MW2063 blueprint. This vision aims to transform Malawi into an inclusively wealthy and self-reliant nation by 2063.

When in operation, the Kangankunde Project will provide significant economic and social benefits to Malawi, in form of taxes and royalties, jobs and business opportunities and social and infrastructure investment. Additional flow of benefits will be generated from bringing mining investment and development to the region.

"Through our Kangankunde Rare Earths Project, we are poised to support Malawi's economic diversification and industrialization efforts," added Vorster. "We are dedicated to responsible mining practices, ensuring benefits for the local community while respecting traditional Malawian customs."

Lindian Resources Country Manager Engineer Trevor Hiwa said construction of the Police Unit was in response to the needs of people in the area as identified through Lindian’s Community Engagement Plan.

“The community wanted to respond to random incidences of insecurity in the area, which at times got grisly with various serious crimes being reported in the area. The community requested us for assistance after noting that their initial efforts, which included collaboration with local Catholic priests, were taking long to materialize and we responded positively by taking up the responsibility,” said Hiwa.

Receiving the donation, Commissioner of Police for the Eastern Region Barbra Mchenga Tsiga said; “We welcome Lindian’s commitment to partner with us in law enforcement efforts which ensure that law, calm and order prevail during the lifespan of their Kangankunde mine. The Police Unit will provide safety to communities in the area, which include churches, schools, a health centre and local Small and Medium Enterprises.”

By Wahard Betha

The fuel scarcity which has lasted for about two months due to foreign exchange shortages in the country has negatively impacted the coal business industry.

Local coal miner Rukuru Mining, which operates the Chombe Coal Mine in Rumphi district, told Mining and Trade Review that the development the fuel scarcity is impacting on the operations of both the company and transporters.

MD for the Company Bruno Kloser said as a Company they have tried to maintain the supply chain of coal using their fuel reserves but predicted more suffering if the crisis persists.

Kloser said: “Our own fuel stocks will only last for few weeks and some transporters are already not able to come to the mine due to lack of fuel.”

“So far we have been able to keep our customers stocked with coal but if the crisis continues for more than two weeks, then some will run out of stock.”

“2024 has given us additional challenges but we have still been able to meet our targets.”

Kloser said the foreign exchange shortage is another contributing factor to the challenges facing the industry saying they are failing to procurement equipment including wash plant, screens and, trolleys to scale up operations due to lack of foreign exchange.

He said: “We shall soon need foreign exchange to acquire more equipment, if that is not available, then we shall have to scale down operations.”

“However, we believe that the government gives priority to manufacturing and production and not consumption. Therefore, we are looking with confidence into the next year.”  

At a press briefing in Blantyre, CEO for Malawi Energy Regulatory Authority (MERA), Henry Kachanje could not clearly give timeframe as to when the crisis will come to an end.

Nonetheless, Kachanje expressed optimism that the crisis might improve after settling debts with fuel suppliers.

The situation has triggered uncontrollable fuel prices to go up on black market with many selling petrol and diesel at a range of MK5000 to Mk8000 per litre.

Malawi imports fuel from overseas through the ports of Beira, Nacala and Dar es Salaam mainly through road tankers with a fraction of the diesel imports coming by train through Beira and Nacala.

However, Malawi has potential for exploitation of hydrocarbons in its part of the Great African Rift Valley Geological zone, which hosts Lake Malawi and the Shire River valley.

The Ministry of Mining is yet to award exploration licences to firms to prospect for hydrocarbons in the country after the previous investors relinquished the licences a few years ago saying they were unable to mobilise due to the prevalence of the Covid-19 pandemic that time, which prompted countries to enforce restrictions on travel.

By Marcel Chimwala

ASX-listed Lotus Resources has started implementing an Accelerated Restart Plan for its Kayelekera Uranium Mining Project in Karonga following the completion of Front-end Engineering and Design (FEED).

Lotus CEO Greg Bittar says in a Press Statement the Company is now moving into detailed engineering and onsite works for Kayelekera’s restart to ensure that it achieves its strategic objective of becoming the next significant global uranium producer in the third quarter of the 2025.

Bittar states that with the FEED program completed, Lotus is now well positioned to conduct a low capital intensity, accelerated restart of Kayelekera.

The Accelerated Restart Plan has seen time to first uranium production reduced to 8-10 months from the previously estimated 15 months by phasing in the completion of non-essential site infrastructure including grid power and acid plant rebuild beyond first production.

The Plan also reduces initial restart capital through a phased approach by focusing on capital items essential to the restart, with the remaining capex continuing off the critical path to optimise operations and cost structure.

Initial restart capital expenditure to first uranium production has been reduced to US$50M from the previous US$88M with initial restart capital intensity pegged US$21.0/lb2.

The Accelerated Restart Plan has delivered outstanding operational and financial outcomes (assuming a long-term uranium price of US$90/lb real) including:

• Life of Mine (LOM) production target of 19.3Mlb of U3O8, over a 10-year mine life.
• Competitive cost estimates maintained; steady state C1 cash cost of US$34.5/lb and all-in sustaining cost (AISC) of US$44.8/lb3,4.
• Pre-tax and post-tax NPV8% Real of US$439M and US$301M3.
• Pre-tax and Post-tax internal rate of return (IRR) of 80% and 66%3.
• Initial capital payback within 2 years of production restart3.
• LOM pre-tax and post-tax free cash flow generation of US$698M and US$486M3 . 

Bittar explains that Kayelekera’s production restart is de-risked by 11Mlb of historical uranium production, with US$200M capital invested into the plant and operations and 4Mlb of existing stockpiles supporting the ramp-up of the operation.

He said: “Following the signing of the Mine Development Agreement and the completion of the FEED program, Lotus is well positioned to take advantage of the continuing strength in the term uranium price and the strong uranium demand outlook.”

“Our thorough FEED process has provided the foundation for us to optimise and accelerate our restart plans for Kayelekera, taking advantage of the existing plant and infrastructure. By sequencing the capital spend and targeting the critical restart items we reduce the amount of initial restart capital, which allows us to turn the plant on much earlier than previously contemplated. This not only provides us with increased funding flexibility but critically allows us to be a producer next year and take advantage of the strong customer demand we are seeing by moving into production as soon as possible.”

“By decoupling the restart timetable from the long lead items which are not on the operational critical path, principally the connection to the power grid and acid plant rebuild, we are able to start the plant well ahead of the original Definitive Feasibility Study (DFS) schedule of 15 months.”

“Those capital items remain in the plan and will be brought on as soon as possible in order to optimise the cost structure. However, we don’t need to wait for those, or have the timetable to restart dependent on those items. The plan was always to have full back up diesel power generation, as the site was originally operated by, and we can use this power while the grid connection is completed. Trucked-in sulphuric acid can be used until the acid plant is commissioned.

Meanwhile, Lotus Board has approved long lead item orders, mobilisation of mobile equipment and construction crews and early works.

Site mobilization and early works

Meanwhile, personnel have arrived onsite and have commenced a program of refurbishment works at the camp and plant areas, including:

• Removal of material that has accumulated along the western boundary of the processing plant and encroached on plant infrastructure during the care and maintenance period;

• Refurbishment of the potable water system and sewer system in the camp;

• Phase 1 refurbishment of rooms in the camp; and

• Inspection of key plant equipment and initiation of refurbishment of plant equipment starting at the crushing and grinding areas.

The plant and equipment in care and maintenance for the restart of operations represents over US$200 million in invested capital expenditure.

Mining contractor tender process

Following a mining contractor tender process including extensive due diligence and site visits, Lotus has received a number of competitive proposals and is in the final stages of selecting its preferred mining contractor.

Bittar explains that final negotiations are underway with the two preferred contractors and it is expected that the Kayelekera mining contract will be entered into in the coming months, with site personnel and equipment mobilisation early to mid 2025.

Electricity grid connection

Lotus has signed a grid connection Memorandum of Understanding (MOU) with Electricity Supply Corporation of Malawi (ESCOM). The MOU contains the agreed pricing structure and provides the framework for Lotus and ESCOM to enter into a Power Implementation Agreement (PIA) and Power Purchase Agreement (PPA).