Malawi eases mining investment climate – Mining Review (February 2015)

The piece “Malawi eases mining investment climate” featured below was initially published in Malawi’s Mining Review Issue Number 22 2015 that is circulating this February 2015.

The full edition can be read here: Mining Review No. 22 February 2015.

To learn more about this quarterly publication, edited by Marcel Chimwala, read the post about the “Voice of the mineral sector in Malawi”.

2015-02 Mining Review Cover

Malawi eases mining investment climate

  • Modern cadastral licensing system in place
  • Geological Survey starts offering digital data

Malawi has made giant strides to smoothen the investment climate in the mining sector with the Government undertaking reforms that have seen a more efficient licensing cadastral system in place at the Department of Mines and the country’s Geological Survey Department offering digital data to investors.

His Excellency the State President Professor Arthur Peter Mutharika is championing the reforms and states that his government is taking deliberate strides to promote the sector because it realizes the potential that the sector has to propel economic growth and help in poverty alleviation.

Malawi is richly endowed with high value mineral resources which constitute an important source of wealth for development and foreign exchange generation for Malawi.  The contribution of this sector to the country’s Gross Domestic Product (GDP) has risen from 3% in 2009 to 10% currently but has the potential to rise to 20% due to Malawi’s unique mineral potential,

says Mutharika.

Minister of Natural Resources, Energy and Mining Atupele Muluzi says following the election of Prof.  Mutharika, who has an open policy towards mining investment, his Ministry is a beehive of activities to facilitate more investment in the potential sector.

In addition to developing a computerized licensing system for the Mines Department and another modern computerized system for the Geological Survey Department to start offering digital other than analogue data to investors, the Ministry is reforming the country’s legal system through the development of a new policy, legal and institutional framework that protect the long term interest of the country.

The process involves the review of archaic legislation including the Mines and Minerals Act (1981) and Petroleum Exploration and Production Act (1983) to ensure that there are in line with modern best practices prevalent in the sector.

As we are all aware, sustainable development of the minerals sector depends on a sound and comprehensive Mines and Minerals Act, which takes into account prevailing best international practices and enables Malawians to realize optimal benefits,

says Muluzi.

Malawi is reviewing the Act after it launched a new Mines and Minerals Policy in March 2013, which is being used as a guideline for the Government in pursuit of its goal to transform the country’s economy from agro-based to mineral based.

The policy’s objectives include promoting the development of the mining sector, contributing to socio-economic development of the country and the foreign exchange base, optimizing mining activities within Malawi so as to enhance value added elements of the sector and promote linkages with other sectors of the economy, and expanding employment opportunities in Malawi.

The other objectives include fostering economic diversification, promoting artisanal mining and women in mining.

Muluzi says:

Malawi has traditionally been considered as an agro-based rather than mineral-based economy because of the policies that Government pursued since attaining independence in 1964. As a result, there was lack of mining culture, little technical capacity and inadequate foreign and local investment which contributed to the slow development of the industry.

But with our new policy in place, Mining is expected to surpass the contribution of agriculture to gross domestic product, which is currently at 30%. This will be a gradual process considering that the mineral sector contribution to GDP is currently at 10%.

Principal Secretary at the Ministry of Natural Resources, Energy and Mining, Ben Botolo, comments that the policy seeks to stimulate and guide private mining investment by administering, regulating and facilitating the growth of the sector through a well organized and efficient institutional framework.

The Government will also intensify provision of extension services to the artisanal and small scale miners and women miners,

says Botolo.

Malawi has a largely unexploited potential for a range of minerals including uranium, rare earth elements, phosphate, coal, gypsum, niobium, tantalum, zircon, kaolinitic clays and gemstones.

The country mines uranium at Kayelekera in the northern district of Karonga but production at the mine was suspended because of low prices of uranium on the global market and the mine, owned by ASX and TSX listed Paladin Energy is now on care and maintenance.

In order to create a conducive environment for mining investment, the Malawi Government is implementing a number of programmes to upgrading infrastructure including its road and rail network, telecommunication system, water and electricity supply systems.

Meanwhile, a number of service providers are supporting the government’s effort to develop a thriving mining sector in Malawi by promoting investment in both large scale and artisanal and small-scale mining sectors.

The service providers include commercial banks such as Standard Bank, National Bank of Malawi, NEDBANK and FDH Bank, which have opened up their doors to finance mining projects.

Malawi also boosts technologically equipped telecom operators including landline network operator Malawi Telecommunications Limited and cell network operators Airtel Malawi and TNM.

The country enjoys flight connections offered by a number of regional and international airlines including Malawian Airlines, British Airways, South Africa Airways, Kenya Airways and Ethiopian Airlines.

There is also Maravi Security Risk Management, which is a private firm with expertise in offering security services to the extractive industry.

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