Malawi’s top minerals sector projects of 2016 – Mining & Trade Review (November 2016)

Malawi’s top minerals sector projects of 2016

Songwe Hill Rare Earth Project

The project is located at Songwe Hill in the Southern District of Phalombe. It is owned by a UK firm, Mkango Resources, which is listed on Canada’s TSX Venture Exchange and the AIM Market of the London Stock Exchange.

Latest Developments

Mkango is advancing with its definitive feasibility study for the project after it announced positive results for a pre-feasibility study that pegged the net value of the resource at US$293-million and the mine life at 18-years. Mkango also announced a metallurgical flow-sheet that produced high-grade products from proof of concept test work. The rare earth products recovered in the process included lanthanum, cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium and yttrium.

The Songwe Hill deposit is one of the rare earth prospects in the Chilwa Alkaline Zone which is targeted in the research project on exploration tools for rare earth elements. The research is being conducted by the European Union financed Hi-Teck Alkab Project and in October this year drew 49 top geoscientists from across the globe to survey the prospects.

Mkango has also undertaken a number of corporate social responsibility projects in the area surrounding Songwe Hill including construction of access roads, bridges, boreholes and painting of primary school classroom blocks with artistic expressions depicting the contents of the syllabus to facilitate easy learning by the students.

Shayona Cement Factory Expansion Project

The project involves setting up of a new state of the art cement plant at Shayona Cement Kasungu Factory located in Traditional Authority Wimbe’s area hence increasing mined quantities of limestone at Livwezi and Chikowa deposits.

Latest developments

Shayona Cement Corporation has invested US$65-million in the project, which it is implementing in phases. The first phase has seen the company’s production hitting 650 tonnes per day and is set to reach 1200 tonnes in the second.

As part of its corporate social responsibility programme, Shayona Cement has been constructing school blocks at a nearby primary school and has also been making donations to a clinic and a police station to sustain their day to day operations. Besides, Shayona donates tree seedlings to the communities and recently donated a police shelter at Bua Roadblock.

 

Duwi Flake Graphite Project 

The project located in Lilongwe is owned by ASX listed group, Sovereign Metals. The project’s economics and technical viability are very encouraging highlighting its potential to become a low cost/high margin flake graphite producer.

Latest developments

Sovereign Metals is seeking to fast-track the project to feasibility study stage after a scoping study conducted in 2015 confirmed Duwi as the sixth largest graphite deposit in the world. The study confirmed that Duwi can support a base case scenario with graphite concentrate production of over 110,000 tonnes per annum over an initial mine life of 20-years.

Other activities planned for the project, currently in its early stages, before production starts include environmental impact assessment studies, community approval, off-take agreements and mobilisation of project financing.

Kanyika Niobium Project

The project is located at Kanyika in the northern district of Mzimba. It is owned by ASX listed Globe Metals & Mining.

Latest Development

Globe is currently looking to secure a market for the products expected from Kanyika, which include niobium, tantalum and uranium. The firm is also looking for off-take partners for the project which requires US$450-million to come on stream. Globe, which has a mining licence for the area, already completed field work and a bulk sampling programme for Kanyika.

Niobium is added to steel to enable steel mills to produce high margin products through enhanced flexibility, weight reduction and strength. Even though 90% of niobium is used in steel, niobium consumption has been growing at twice that of steel for the past 20 years.

Tengani Titanium Project

The project located at Tengani in the district of Nsanje is owned by a local firm, Tengani Titanium Minerals/Crown Minerals Limited.

Latest developments

The firm is involved in metallurgical test work, and has engaged international experts to execute the studies. Work so far has indicated that the deposit contains rutile, ilmenite and apatite with minor zircon. Metallurgical test work continues to determine how the important industrial minerals from the site could be recovered.

Mchenga Coal Mine

The mine located in the 90 square kilometers Livingstonia Coalfield in northern Malawi is owned by local investors after the government privatized it in 1999.

Latest developments

Mchenga coal mine produces 3,000 tonnes of coal per year helping to meet the growing energy demand for the local industry. The company is also helping the country serve the much needed foreign exchange through import substitution, and generates foreign exchange through export of duff coal which has no market locally.

The firm is currently seeking to raise capital for expansion by roping in a strategic equity partner.

Block 1 Oil Exploration

Block 1 is the second biggest oil exploration licence demarcated in Malawi and is located onshore in the Northern Region covering the district of Chitipa and part of Karonga. The Malawi Government granted a prospecting licence for the block to South Africa’s SacOil Holdings in December 2012. The block is geologically on trend with the East African Rift System, a proven hydrocarbon province with prolific oil discoveries in Sudan, Chad, Kenya and Uganda.

Latest developments

SacOil has completed a risk screening study which has determined the environmental risk and opportunity criteria that sets the platform for further exploration work. The company is, therefore, set to prioritize its focus on areas meeting geologically and environmentally favourable criteria for further exploration.

SacOil also carried out desk studies to review the data collected over the area, and based on the geological and geophysical data reviewed, the SacOi team is confident that the elements of a petroleum system are present over the licence. The future work programme will revolve around proving the existence of each element, which includes Reservoir, trap, seal source and migration pathways. In furthering understanding of prevailing geographical conditions, the future work programme will also include a geochemistry survey, positive seismic tomography and geochemical sampling of hot springs in the concession area.

Block 2 and 3 Oil Exploration 

The project, owned by international expatriate firm Hamra Oil Holdings, entails exploration for oil in Blocks 2 and 3 covering the Lake Malawi area of Karonga and Nkhatabay which also falls within the oil rich East African Rift System. Hamra Oil acquired the tenements from UK firm, Surestream Petroleum in 2014.

Latest developments

Hamra Oil has come up with an exploration plan to conduct onshore studies in the area focusing on outcrops of off-shore oil traps. The studies will involve drilling of holes to ascertain the outcrops of hydrocarbon formation.

The company has decided to conduct onshore studies other than sinking the exploratory drill-hole offshore as earlier expected because the later is more expansive and does not make economic sense with the prevailing low oil prices.

Hamra Oil has come up with the said exploration plan after it completed a full tensor gravity survey.

Block 4 and 5 Oil Exploration

The two blocks cover parts of the districts of Nkhotakota, Dedza, Machinga, Mangochi, Blantyre, Zomba, Mulanje, Thyolo and Phalombe. The tenements located within the oil rich East African Rift system are held by UAE firm, Rak Gas MB45.

Latest developments

Rak Gas completed a full tensor Gravity survey of the area which was conducted after an awareness campaign targeting members of the community in the districts. Just as the other oil exploration firms, Rak Gas is set to proceed with oil exploration after the government lifted an over 12-months suspension on oil exploration that was meant to review the licences and ascertain that the process is executed in accordance with the country’s laws.

Block 6 Oil Exploration

The tenement covering the lower Shire Valley area is held by multinational oil search firm, Pacific Oil Limited.

Latest Developments

Unlike Rak Gas and Hamra Oil, Pacific Oil is yet to complete a full tensor gravity survey as the process to kick-start the survey was thwarted by the suspension order of oil exploration activities by government in October 2014. The company is, therefore, planning to mobilize to kick-start the survey following government’s lifting of the suspension order.

***

The piece “Malawi’s top minerals sector projects of 2016” featured above was initially published in Malawi’s Mining & Trade Review Issue Number 43 that is circulating this November 2016.

The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.

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