Some civil society organisations (CSOs) have expressed concern over the way mining activities are being carried out in the country.
Among others, they have highlighted that corruption in the sector has made it difficult for people to benefit from minerals that are being extracted.
Chairperson of Natural Resources Justice Network (NRJN) Kossam Munthali made the observation in Lilongwe on Tuesday during the launch of a report titled “Future Mining Revenues for Malawi”.
“When such projects start, when we are talking of who should be given licences, the companies start brushing shoulders with politicians, with ministers. This report does not address issues of corruption, issues of fraud. In the end, they sign deals which are disastrous to the country,” Munthali said.
He cited the Kayererkera Uranium mine deal, which he said did not benefit Malawians.
Centre for Environmental Policy and Advocacy (Cepa), Executive Director, William Chadza, wondered what happens to samples of minerals.
“After exploration, what happens to the samples? In most cases, the samples may be too many. Some companies are even leaving the country before they start their work,” Chadza said.
The report, which was launched on Tuesday, was based on mining exploration a Canadian company, Mkango, is doing at Songwe Hill in Phalombe.
Oxfam Country Director, John Makina, said considering that Malawians have high expectations on the mining industry, there should be careful monitoring.
“Careful monitoring by government officials inside [the system] and by citizens, by civil society, by media on the outside, is the best way to secure a fair share of our natural resource wealth. Active engagement is needed to ensure that potential benefits of mining and oil are fully realised,” he said.
He added: “It is important to do a revenue analysis while there is time to fix potential problems. Environmental and social impact assessments are always done in advance of project development in order to anticipate and mitigate adverse effects. Oxfam recommends that revenue assessment should be done in projects as a way of managing expectations.”
Acting Director of Mines, Atileni Wona, hailed the launch of the report.
“The launch of this report is very important. It is an indication that full disclosure of mining activities is becoming a reality in Malawi,” Wona said.
According to the report, it is unclear whether the project will continue. But it says, if the project continues, government would get revenues in form of production value, corporate income tax paid on company profits, resource rent tax, withholding taxes and government’s equity in the project.
The report projects that assuming that a massive price increase makes the project viable, government revenue would increase from $20 million to $50 million per year, once the initial investment has been recovered
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