Mining & Trade News

The future of Malawi’s mining sector stills remains uncertain as the sector is still in its infancy relative to its potential despite the country clocking 61-years of independence from the British colonial rule in 1964.

Since Malawi started making discoveries of various minerals many years ago, the country has not yet fully transitioned from being an agricultural driven country to one that uses mining to meaningfully drive socio-economic development, with the contribution of the sector still at a staggering one percent of gross domestic product (GDP).

Stakeholders operating in the sector have blamed political influence as one reason behind underperformance of the sector, accusing politicians of  power of manipulation of the regulatory framework.

  Coordinator for Natural Resources Justice Network (NRJN) Kennedy Rashid said political influence at some point has discouraged responsible investment and scared away some potential foreign investors from exploiting minerals.

Rashid said: “At NRJN, we have observed that mining concessions and licenses are frequently granted in secrecy, with limited transparency or community consultation.

“Politicians, especially those in power or close to decision-makers, have historically manipulated regulatory frameworks and licensing processes to benefit political allies or themselves, often at the expense of public interest and environmental protection.”

“Successive administrations have often reversed or neglected mining reforms introduced by their predecessors, leading to a fragmented and unpredictable regulatory environment and this discourages responsible investment and weakens oversight.”

“Corruption, patronage, and lack of accountability have further allowed some foreign investors to exploit mineral resources without fair compensation to communities or the state whereby political will to enforce benefit-sharing laws or to protect communities from displacement and environmental harm remains inconsistent and weak.”

Rashid said there is a need for strong institutional independence of the Department of Mines and the Malawi Extractive Industries Transparency Initiative (MWEITI) to ensure that the development is encountered.

He also advocated for criminalization of any political interference in mining contracts saying a guarantee of transparency whereby Civil Society Organisations (CSO) can ably play a watchdog role, demanding accountability in how decisions are made in the sector is crucial.

Coordinator for Chamber of Mines and Energy Grain Malunga lamented the tendency of politicians of appointing people in management positions without merit.

“We should discourage politicians from appointing personnel in management positions without competition and merit,” said Malunga.

  Mining Expert Ignatius Kamwanje said there is need to ensure growth of the Artisanal and Small-scale Mining (ASM) subsector in order to develop the minerals sector in the country.

He said the continued ban on gemstone exports to check undervaluation in taxes is impacting on ASM growth as it has led to an increase in smuggling of gemstones saying if lifted there is potential for an increase in revenue generated by the government from the subsector through tariffs.

He said: “Another point is on establishment of governance systems or structures. Malawi must define clearly the boundaries or roles of governance structures to avoid overlaps.”

“Politics has made it possible to disaggregate institutions without actually looking at independent functionalities.”

“This has also heavily impacted on funding and financing and with Agriculture, Tourism and Mining (ATM) agenda at stake, the mining sector is still underfunded and, this may result in underachieving of the goals.”

Though the government rolled out the formalization drive of Artisanal Small-scale Miners (ASMs) followed by establishment of gold and gemstone structured market, ASMs continues to struggle to thrive.

Kamwanje advised the government to be in the forefront providing guidance in policy direction, sensitizing communities and miners on the benefits of engaging in medium scale mining, and funding programs through various media outlets in documenting for a broader picture on awareness.

   Rashid commented that despite their contribution to local economies, ASMs are largely excluded from formal mining policy discussions and remain vulnerable to exploitation by middlemen and traders.

Rashid said these failures stem from inadequate legal recognition and support mechanisms for ASMs in the Mining and Minerals Act; lack of financial support instruments, such as low-interest loans or grants tailored to ASM cooperatives; insufficient technical assistance, lack of extension services, and mineral market infrastructure and; weak enforcement of environmental and safety regulations, which keep ASMs locked in survivalist, informal activities.

Rashid said for the challenges to be alleviated, there is a need for the government to fully implement the 2019 National ASM Policy, which lays out strategies for formalization and support.

He said: “There is need to establish ASM Service Centers across mining districts to provide training, equipment, and processing facilities.”

“A dedicated ASM Development Fund should be established to help miners transition toward mechanized, more productive, and safer practices.”

Meanwhile, the country has no large scale mine in operation, with only medium scale mines dominated by coal and quarry mines and ASMs mainly mining alluvial gold and gemstones as the backbone of the mining activities.

Kayelekera Uranium Mine

The Kayelekera Uranium Mine in Karonga, which was operated by ASX-listed Paladin Energy became the first large scale mine when it was opened in 2009.

Paladin suspended production at Kayelekera in February 2014 due to sustained drop in global uranium prices in the aftermath of the Fukushima Nuclear Disaster in Japan, which resulted in a drop in demand for the yellow cake owing to a closure of several reactors in Asia.

Lotus is, currently. Advancing plans to reopen the mine in the third quarter of this year and already signed a Mine Development Agreement (MDA) with the Malawi Government and a Community Development Agreement (CDA) with the local community.

Kasiya Rutile - Graphite Exploration Project There is also outstanding progress in the development of the Kasiya Rutile-Graphite Project in Kasiya in Lilongwe District which is owned by ASX-listed resources group Sovereign Metals, which roped in world mining giant Rio Tinto as its strategic partner.

Sovereign Metals has successfully completed mining trial stage of its Pilot Mining and Land Rehabilitation Program at Kasiya. 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. Following the conclusion of mining trials, land rehabilitation demonstrations were conducted commencing with the backfilling of the test pit.

The Company released results of Pre-Feasibility Study (PFS) which confirmed Kasiya as potentially a major critical minerals project with an extremely low carbon footprint delivering major volumes of natural rutile and graphite while generating significant economic returns.

The results indicate that the proposed large-scale operation will process 24 million tonnes of ore per annum to produce approximately 245kt of natural rutile and 288kt of natural graphite per annum once at steady state.

Kasiya is the largest natural rutile deposit and second largest flake graphite deposit in the world.

Both rutile and graphite are critical to the world economy as well as crucial to decarbonisation solutions required to meet “Net-Zero” and other targets set by policymakers worldwide.

The Project has the potential to thrive on the global market as currently sources of natural rutile are in decline as several operations’ reserves are depleting concurrently with declining ore grades.

  Rio Tinto is providing assistance and advice on technical and marketing aspects of Kasiya including with respect to Sovereign’s graphite co-product, with a primary focus on spherical purified graphite for the lithium-ion battery anode market.

The other potential mining projects in Malawi include the Kanyika Niobium Project in Southern Mzimba District owned by ASX-listed Globe Metals and Mining and Songwe Hill Rare Earth Mining Project in Phalombe operated by UK firm Mkango Resources.

All these large-scale projects at advanced stage and others in pipeline portray the great potential that Malawi’s mining industry has. But as the country celebrates 61 years of Independence, the question that still lingers in the minds of many Malawians is that; will Malawi realise its dream of turning mining into the backbone of the economy and when? 

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