By Wezzie Gausi:
Parliamentary Committee on Natural Resources and Climate Change has cautioned the Ministry of Mining and Attorney General to tread carefully when signing mining development agreements (MDA) with Lotus Resources and Mkango Resources Limited.
This follows delays by the AG to finalise negotiations with the two companies on the mining agreements.
Speaking when the Ministry of Mining, Treasury and AG appeared before the committee on Tuesday at Parliament, committee Chairperson Werani Chilenga said the committee is suspecting that the mining companies are just middlemen.
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He said demands by the companies are unrealistic which is a cause for worry.
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“They were also seeking a zero rated Corporate Income Tax (CIT) for 10 years from the date of commercial production. This is something that as a nation we must look into carefully as we may be entering into agreements with middlemen,” Chilenga said.
Ministry of Mining, Principal Secretary responsible for Regulations Martin Kaluluma Phiri told the committee that all the legal matters will be assessed by the office of Solicitor General then provide guidance and recommendations before the MDAs are signed.
He said once all the issues are agreed upon the MDAs will undergo final scrutiny.
“The ministry admits that, indeed, the negotiations have taken long. However, it has not been to the intention of the government to take long with these negotiations but we felt that the proposals made by the companies have not been realistic and could not, in any way, represent a good deal for the Malawi government,” Phiri said.
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AG Thabo Chakaka Nyirenda said his office cannot sign the agreements without proper consultations.
He said the government would like to benefit from these agreements hence the delays.
“We needed to sit down and reach an agreement with the companies before signing the agreements. Otherwise it could be unwise to regret after the MDAs have already been signed,” Nyirenda said.
In May this year AG Nyirenda said the government is not ready to sign Mining Development Agreements (MDA) for Lotus Resources and Mkango Resources Limited despite signing the agreement for Globe Metals recently.
He said the mining companies were demanding that the government change the laws to suit their needs, having bank accounts with foreign countries and the government to give them a waver on tax, among other things.
