The piece “Malawi’s new mining law tough on stone peddling” featured below was initially published in Malawi’s Mining & Trade Review Issue Number 34 that is circulating this February 2016.
The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.
New mining law tough on stone peddling
By Madalitso Mhango & Evetar Chinsolo
The honeymoon will be over for smugglers of Malawi’s precious stones when the new Mines and Minerals Act comes into effect as the new law has stipulated stiff measures against stone peddlers in order to allow that marketing of minerals is conducted in an organized platform that generates adequate revenue in form of taxes for the government.
According to the Mines and Minerals bill, any person who possesses, purchases or sells any reserved mineral in its raw state is guilty of an offence and upon conviction is liable to a fine as prescribed in the regulations or to imprisonment for a period of not exceeding one year, or both such fine and imprisonment.
Malawi is, currently, losing billions of kwachas through stone smuggling mainly targeting precious minerals including gold and gemstones, according to a report by the Malawi miner’s tax force.
The quality and quantity and value of the stones do not match the declared value of the exported gemstones,
says the report.
The proposed law says an application for a reserved mineral license is to be made to the Commissioner for Mines in a prescribed form and shall be accompanied by the extension fee.
The licenses will be granted to any licensed bank and any person who is fit to hold such a license and who understands the provisions of this Act.
The licenses will have a validity of one year and they will be renewed on payment of the prescribed fee hence the license is not transferable as it may be cancelled at anytime if the licensee is convicted and unfit to hold the license.
Even though the license will be granted to the mineral possessors, the holders are limited from purchasing any reserved minerals in their raw form from any person.
The law, however, says there is no restriction of granting licenses to museum, education or scientific establishment from the possessing amounts of reserved minerals for the purpose of display as far as teaching or scientific study is concerned.
The new law also stipulates tough conditions for contractors who happen to discover precious minerals.
Any contractor constructing public works that inadvertently discovers reserved mineral into the course of its work shall inform the discovery to Registrar of Mineral Tenements within 30 calendar days of its discovery,
says the Bill.
The Mines and Minerals Bill was expected to be tabled in parliament last year but the house referred it back to the Ministry of Natural Resources, Energy and Mining after noticing anomalies in some clauses in the document that needed to be rectified.
Malawi hopes the introduction of the new Act will ensure sanity in the sector to enable the government generate more revenue, which is lost through unscrupulous and black market deals.
Mining used to contribute 10% to the country’s Gross Domestic Product (GDP) when the mothballed Kayelekera Uranium Mine was up and running but now its contribution to GDP has plummeted to less than 5%, according to the World Bank.