Government has challenged mining firms in the country to produce high quality coal if they are to remain relevant and claim a significant share of the market which is dominated by foreign firms.
Minister of Mining, Rashid Gaffar, said most companies prefer coal from outside the country due to its high quality, hence, making it difficult for the government to protect the local market.
The minister was reacting to concerns from Mchenga Coal Mines Limited in Rumphi District when he toured the mine on Thursday.
Mchenga Coal Mines Limited Managing Director, Rafik Gaffar, claimed that importation of coal from Moatize in Mozambique and Hwange in Zimbabwe is forcing local mining companies to scale down production.
Gaffar said for instance, his company has lost about K2.8 billion in the past four years after reducing production with about 48,000 metric tonnes during the stated period.
“The importation of coal from Mozambique and Zimbabwe is affecting our production. Had it been we were able to reach the ports at a cheaper cost we would have been exporting a lot of coal outside. But because we are landlocked our coal becomes very expensive in terms of transport. So we expect the local industry to support us,” he said.
Mchenga Coal Mines Limited has a capacity of producing 3, 000 metric tonnes a month but for four years it has gone down to 2, 000 a month.
Gaffar said 1, 000 metric tonnes of coal costs $ 80, 000 which is about K59.2 million.
But in a separate interview, the mining minister asked players in the industry to up their game, saying quality is the only key in promoting their industry against foreign products.
“The coal mine in Malawi is going on very well. The only unfortunate part with coal mine is that it is being done far away from our factories so because of transport it becomes more expensive. But if we can improve on quality of coal, I think companies will stop this importation. They must look at improving the quality in order for the government to assist in stopping importation of coal for them to be able to satisfy our markets. If we stop importation of coal that’s a huge benefit because we will save forex which can be used to buy medicines and fertiliser among others,” Gaffar said.
Meanwhile, one of the small scale mining companies, Chombe in Rumphi District has asked the government to come up with clear guidelines on how they can implement Corporate Social Responsibility (CSR) to avoid unnecessary tension with the community.
“Mining in general often has a bad name and when we came here there were few misunderstandings. Once they saw that we were contributing to the community by fulfilling our promise, the relationship has improved. The only point is that there are no clear guidelines from government what the community should expect and what the mining company can do,” Chombe Coal Mine General Manager, Bruno Kloser said.
There are about 12 licensed coal mine companies who are operating in the Northern Region.