The Mining Development Agreement to be signed between Globe Metals & Mining and the Government of Malawi for the Kanyika Niobium Project in Mzimba, northern Malawi, is still on the drawing board.
Last week, news reports revealed that the International Senior Lawyers Project (ISLP) had been called in to assist the Ministry of Mining in negotiating the deal with Globe. The team of experts is headed up by Mark Goodrich, who is a partner with White & Case LLP, and an international energy and construction lawyer with experience in international arbitration.
Since 2001, ISLP has provided pro bono services of highly skilled and experienced lawyers to promote human rights, equitable and sustainable economic development and the rule of law around the world. To date, ISLP has implemented 350 projects providing assistance to governments, civil society organisations and other stakeholders from 72 countries. ISLP has previously sent volunteers to Malawi to provide trial advocacy training to the Ministry of Justice’s prosecutors and legal aid lawyers, and ISLP volunteer Robert Kinney assisted with the Commission of Inquiry into Robert Chasowa’s death.
The Board of Directors of Globe postponed a decision to give the go-ahead for the project because of ongoing negotiations on the deal in March and the negotiations had not been concluded last month, as we blogged. In addition, Globe has not finished the Definitive Feasibility Study (DFS) that must be presented to the Board. Last month, to complete the final stages of the DFS, Globe appointed David Ma, President of Metalink International. Ma will assist with the optimisation of the concentrate processing plant and product marketing for long-term profitability of the project.
The Kanyika Niobium Project is not without controversy as nearby communities reportedly fear health risks over contaminated water associated with mining and are concerned about losing land in the resettlement. The project’s Country Manager Chrispine Ngwena explained that the toxins identified in water sources are pre-existing and were in fact discovered due to the company’s work.
Malawi’s Minister of Mining John Bande explained the reason for calling on ISLP,
We have invited international legal experts on mining to help us. In the long term, they will help with capacity in terms of negotiating effectively on mining deals. Now Malawi has better focus on mining sector as well as issues around it.
Before, we were very careless on issues to do with contracts. No wonder we have contracts in question by the public and we do not want a repeat of that.
There is need for governments to create a win-win situation for both mining companies and government. Malawians deserve better mining deals. In order to achieve this, there is need for expertise to help in coming up with modern mining laws and policies as well as good mining policies.
Bande’s comments on the government’s carelessness on “issues to do with contracts” seems to be an admission that the agreement made by the government with Paladin on the Kayelekera Uranium Project was poorly negotiated, giving weight to the calls for the renegotiation of this agreement. These calls for the renegotiation of the “stinking development agreement” have been given impetus by the recent launch of the African Forum and Network on Debt and Development’s (AFRODAD) report on the revenue costs and benefits of the mine. The government is still undecided about whether or not renegotiation will go ahead and has not yet carried through on the promise to make the agreement public.
The Government will also sign a Memorandum of Understanding with South Africa’s Council for Geoscience to produce a detailed analysis of Malawi’s minerals. The CEO of the Council, Mxolisi Kota highlighted the importance of the mapping exercise
There is need for Malawi to have detailed information about its geophysics to maximise output from mineral deposits. Such information can help countries such as South Africa offer necessary expertise on the mining sector.