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Tracking mining sector in 2022

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ENGAGING PLAYERS IN THE INDUSTRY—Mbawala

Stakeholders in the mining sector have agreed that the industry has the potential to transform the local economy.

However, indecisiveness, procrastination and weak supporting systems have derailed development of the local industry.

For example, in the 2021- 22 national budget, the government allocated K5 billion meant for establishment of a Mining Authority and a National Mining Company.

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The two entities could lay a foundation for regulating the industry and spearhead investments in various mining projects through partnerships.

However, two months away from closing the 2022/23 financial year, there is little or nothing to show for it.

In an interview, Ministry of Mining spokesperson Andrew Mkonda Banda said establishment of the institutions await accompanying legal instruments.

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He said a bill has been drafted and is being vetted at the Ministry of Justice.

“We are hopeful that, soon, the bill will be given back to us so that we wrap up other processes and we put the law into use,” Banda said.

Nevertheless, persisting energy challenges in the country remain a huge stumbling block to developing the mining industry in Malawi.

In an earlier interview, one of the directors at Lotus Resources Limited, Grain Malunga, indicated that Kayelekera Uranium Mine could have been re-opened in 2022 if the mine were supplied with electricity from the national grid.

“High operation costs perpetuated by the running of diesel generators, coupled with low prices of uranium on the market, did not allow for re-opening of the mine. So, until prices rise to profitable levels, it will be challenging to re-open the mine,” Malunga said.

His sentiments were shared by Country Manager for Mkango Resources Limited Burton Kachinjika, who indicated that, in the run up to operationalising a precious metal mine in Phalombe District, they plan to put up a 30 megawatts solar power plant to support the mine.

Be that as it may, there were a number of exciting developments in the sector in the year gone by.

For example, the Ministry of Mining indicated that Malawians should expect real mining activities at the multi-million dollar rutile mine discovered at Kasiya in Lilongwe to commence during the 2025-26 financial year.

In April 2022, Australia-listed company, Sovereign Metals and Mining, announced that an updated mineral resource estimate had revealed the world’s largest rutile deposit at 1.8 billion tonnes. The estimate also revealed the second largest graphite deposit.

Furthermore, developments leading to the issuing of mining licences to three companies, namely Lotus Resources Limited, Globe Metals and Mining and Mkango Resources Limited, brought excitement that such companies could get closer to commencing mining activities in the country.

The ministry said Mining Development Agreements (MDAs) were already scrutinised and were with the Ministry of Justice which will then be submitted to Cabinet for further review and approvals.

Another exciting development in the past year was the revelation that Lindian Resources Limited began the first phase of its advanced drilling programme in search of rare earths at Kangankunde hill in Balaka District.

Previous test work for gravity separation processes uncovered a 60 percent recovery of monazite and a grade of 60 percent rare earths in mineral concentrate at the site.

Other assessments done on the hill broadly confirm that the neodymium and praseodymium content of the rare earths ranges from 19 percent to 21 percent.

Minister of Mining Albert Mbawala engaged an extra gear by engaging foreign investors to explore opportunities in the country.

He indicated that he had fruitful discussions with Apollo Minerals Limited which is interested in the exploration and mining of zinc and lead, Black Rock Mining Limited interested in exploration and mining of graphite and Peak Rare Earth Company, which is interested in the exploration and mining of rare earth minerals, all from Australia.

Economist Betchani Tchereni reiterates that the mining sector is one of the key, low hanging, fruits that should be implemented with speed to transform the local economy.

He indicated that by keeping the sector idle, Malawi is losing a lot of foreign exchange.

“We needed to focus on low hanging fruits to deal with these economic problems and mining is one of them because it will help us with foreign exchange, jobs, widening the tax base and many other things,” Tchereni said.

There is a need, therefore, for the authorities and investors in the sector to work together to iron out all bottlenecks and allow the mining industry transform the local economy.

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