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K5 billion needed for mining company capitalization

Mining

The Ministry of Mining has said it needs funds in the ranges of K4 billion and K5 billion to capitalise the National Mining Company.

This would form part of a turnaround strategy for the mining sector which President Lazarus Chakwera announced in May.

In an interview Tuesday, Principal Secretary in the Ministry of Mining Joseph Mkandawire said the company was yet to be capitalised as the ministry waits for funding from the Treasury.

“We have submitted our request. As you know, this year, the government financial year is only for nine months; so we are expecting to get the funding either during mid-year budget review or at the end of the financial year,” Mkandawire said.

Once the company is operationalised, it will ensure advanced mineral exploration for investors and act as a vehicle for joint ventures in the mining sector.

In his address in May, Chakwera said the economy would diversify to complement tobacco for exports and mining is the priority sector.

He said the mining sector would be revamped by allowing the Reserve Bank of Malawi (RBM) to start buying gold from artisanal miners for export and operationalising and capitalising the National Mining Company.

The central bank already set a structured market for gold, through which it has been able to buy gold worth K900 million in the past three months.

In an interview Tuesday, Natural Resources Justice Network Chairperson Cossam Munthali said the arrangement requires a review, saying it still falls short of turning around the mining sector.

“RMB is buying at K35, 000 per gram. How much are they going to sell? We need a professional company which is independent and be able to value and inform RBM to bargain with miners because, as things are now, miners will end up being exploited because RBM is an interested party,” he said.

For decades, tobacco has remained Malawi’s top export crop.

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