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Mining revenue at risk as prices drop

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Current price trends of rare earths pose a threat to the prospective revenue Malawi expects to get once mining activities in the country become fully fledged.

Mkango Resources, a company which is exploring rare earth elements at Songwe Hill in Phalombe, has confirmed that going by current prices, mining for minerals in Malawi would not be profitable.

Mkango Country Director Buxton Kachinjika said although results from the pre-feasibility study the company conducted have shown great promise, it would still not be economically viable for the company to explore minerals in future if prices remain the same.

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“Currently, the price is rock bottom and you would not actually mine at a profit. But if prices pick up, our mine is a low cost mine and it would be easy to make profits and we think if the price of the commodity increases a little bit, then we will be safe,” said Kachinjika.

The mine is expected to roll out its operations in the two to three years.

“We are targeting rare earths which are in 17 elements and we are targeting heavy rare earths. These are the elements that are used in the production of electrical equipment for cars and televisions, among others. The demand for heavy ones is very high and the market price is varying all the time,” he said.

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Mkango has since completed its pre-feasibility studies and has now embarked on feasibility studies which are scheduled to go on up to 2017.

Kachinjika said once the feasibility study is completed in 2017, it will take a year or so for the mine to be fully operational.

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