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Mchenga owing government over K120 million in loyalties

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ON SITE— Mbawala (in white dustcoat)

Mchenga Coal Mine a subsidiary of Coal Products Limited is owing the government money amounting to over K120 million in loyalties that has accrued in the past years.

According to a consensus between the government and the company, the former is supposed to be getting five percent of total sales from the latter.

Speaking yesterday when Minister of Mining Albert Mbawala visited the mine, engineer for the site Kelvin Alexander Chitsulo acknowledged the debt but said it has been accruing as the company was not making profits.

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Chitsulo who is also the Acting Mchenga Mine Manager said among others they are increasing production capacity in a bid to have more profits which would help them sort out the debt easily.

“We used to pay the royalties but then production went down hence we have been failing to service the royalties. But this is something we are strongly working on. I am not sure on the specific amount that we owe the government but it is quite a lot. I am happy to say that production has started picking up and we are very serious about it,” he said.

Last year the company was only able to produce about 35 tons of coal per day which has not gone up to 75 tons a day and the company is eyeing on topping it up to 120 tons a day by November this year.

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Commenting on the matter Mining Minister Mbawala said it is a major concern that the company is failing to settle the debt imploring it to devise a settlement plan.

He said they have not yet reached a point of putting sanctions against the company as talks are still underway.

“This company has been failing to pay their royalties to the government for quite a number of years, actually it has accumulated to around K120 million over the years and as government we are concerned. You know loyalty is tax, so if they are unable to pay their tax it means they are breaching the laws of the land. And we are pleading with them that they should put up a mechanism of how they can settle their arrears of the royalties. Whether they will be paying in installments all we need is a plan, this money for Malawians,” he said.

Apart from facing low production, Mchenga is also facing a shrinking market as one of their major customer Kanengo Tobacco Processors closed and also that most companies in the Southern Region opt for coal from Mozambique.

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