Mining & Trade News

There were a number of negative comments from Malawians when Sovereign Metals signed a non-binding memorandum of understanding (MOU) for graphite marketing from its Kasiya Rutile-Graphite Project with US Company Troxys at this year’s Investing in African Mining Indaba in South Africa in the presence of a representative of the US Government which is sourcing critical minerals from Troxys and other companies through its US$12-billion Project Vault.

Some local media reports questioned the absence of the Malawi Government in the signing of the deal while other social media commentators said that the deal is a sign of exploitation by the Americans.

Following this deal, as reported in our article on Page 8 and 9, Sovereign Metals has signed another MOU with a Japanese firm Mitsui for the purchase of rutile from Kasiya.

The agreement with Mitsui is also non-binding, meaning it simply reflects an intention to work together and negotiate a future commercial agreement if the project proceeds successfully.

The Kasiya project has also attracted other strategic partners, including global mining giant Rio Tinto and the International Finance Corporation of the World Bank, which are involved in investment and environmental standards for the project.  

As Sovereign MD and CEO Mr Frank Eagar is quoted in the article, there is no cause for alarm for Malawians on these deals as they do not imply that there is any mining taking place now at Kasiya that Malawi is not benefitting from.

As Eagar writes, such arrangements are common in the mining industry because investors and lenders often require evidence that there will be reliable markets for a mine’s products before they commit the significant funding needed to build it.

We agree with Mr Eagar in urging Malawians to appreciate the positivity in these deals, which imply that the Kasiya deposit is attracting interest from key players in the global mining industry as the world seeks new sources of critical minerals.

It is our plea to Malawians to work with the Government in ensuring that there is a conducive environment in the country that tolerates mining investment by showing good will to law abiding investors.

It is a fact that as owners of the country’s mineral resources, Malawians want huge benefits from the minerals. But citizens will adequately benefit through a favourable legal and regulatory framework, and mining development agreements that companies sign with the Malawi Government not through government presence in signing of MOUs between investors.

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