Mining & Trade News

Malawi Government’s prolonged ban on exportation of unprocessed gemstones continues to haunt Artisanal Small-scale Miners (ASMs) and dealers operating across the country.

In February this year the Ministry of Mining issued what was called a temporary ban on all exports of precious minerals to conduct a review of its mineral valuation framework, aiming to curb undervaluation and improve revenue collection.

The ban. which has now lasted about six months, has heavily affected ASMs and dealers.

In an interview with Mining and Trade Review, Maleta Gems and Jewelry said the prolonged ban has resulted in termination of contracts with international buyers who are now regarding Malawi as an unreliable gemstone source.  

MD for the firm, Percy Maleta said inaction and lack of communication by the Ministry of Mining continues to erode the trust that the firms in the sector earned and maintained with international buyers for years.  

Maleta said: “To date, no one seems to take ownership of the ban, neither the Principal Secretary, the Director General of the Minerals and Mining Regulatory Authority (MMRA) nor the Minister himself.

“Efforts by stakeholders to seek an audience or clarity have been met with silence, and this lack of transparency is deeply concerning and disheartening, making the entire gemstone family feel completely abandoned in the dark.”

The Malawi Government established a structured market for both gold and gemstones and empowered Export Development Fund (EDF) as corporate buyer under the Reserve Bank of Malawi (RBM). But Maleta said even though the move is commendable its execution has fallen short particularly for the gemstone subsector.

He said: “EDF currently does not have the financial muscle or operational model to absorb the full supply of precious and semi-precious stones being mined.”

“It behaves more like a commercial buyer than a strategic buyer, showing reluctance to purchase unless immediate resale is guaranteed and this short-term view does not align with the realities of the gemstone market.”

“EDF has also failed to diversify its buying. The market is not just about ruby and sapphire. most of which come from private mines or currently not being produced.”

“We have a wide range of coloured and ornamental stones that could drive value if properly marketed and supported by government structures.”

He said the export ban coupled with the failure of EDF to meet its mandate have left miners with limited options, a situation which has inevitably fueled illegal vending, as people seek alternative survival mechanisms.

Maleta, therefore, called for a transparent update on the status of the ban and meaningful engagement with industry players to chart a practical and inclusive path forward.

Concurring with Maleta, Co-Founder for Zozodo Gemstone Consultancy (ZGC) Emmanuel Phiri blamed EDF for being selective in buying the gemstones saying their mindset only dwells on making the entity realise more revenue not serving the nation.

  Phiri said: “Business has been greatly affected in a negative way. No investor is willing to invest, no capital forex to be generated through exports, this will result in shutdown of business due to lack of sales.”

Mining Expert and MD for Chiwandama GeoConsultants John Nkhoma while blaming the prolonged ban  said the sector is encountering challenges including secrecy and lack of production figures.

Nkhoma said: “Main problem is lack of audit.  The sector is very secretive. No one is revealing what they are doing and producing.”

“The government does not have the figures on the production of the sector.I remember sometime back government wanted to support the sector but faced problems because there were no figures relating to production and sales in the sector.”

Responding to the concerns, Acting Director in the Ministry of Mining, Mphatso Chikoti disclosed that there are in the process of finalizing a framework that will seal loopholes for smuggling gemstones.

Chikoti said: “We are working on a framework that will ensure that there are no leakages.”

“The framework has been finalized and we are now working with the Ministry of Justice, and what is remaining is a stakeholder meeting to have their input to map the way forward on how we can curb the smuggling of the gemstones.”

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