Malawi’s Mining, Oil and Gas News #28: July 2017

Malawi’s Mining, Oil and Gas News #28: July 2017

The dispute between Tanzania and Malawi over the boundary on Lake Malawi has been dominating headlines. The dispute flared up following the issuance of oil exploration licences in 2011 that overlap with the contested area. The dispute is currently being mediated by former Mozambiquan President Joaquim Chissano.

At the beginning of July, the government announced that mediation talks were going resume in South Africa. The last talks were held in March 2014. The government assured the public,

The position of the Government of Malawi is that the boundary is the shoreline of Lake Malawi as established by Article 1(2) of the 1890 Anglo-German Treaty.

The Government of the Republic of Malawi, shall restate its position on the boundary of Lake Malawi and expects that the HLMT will pronounce itself on the fundamental question on where the boundary lies between the two countries, following the submissions by the two countries at the onset of the mediation process.

Following the meetings, the government announced that

Having heard from both Delegations, the HLMT [High Level Mediation Team] proposed that it should brief and consult with Their Excellencies Professor Arthur Peter Mutharika and Dr. John Pombe Magufuli, for Their Excellencies’ further guidance on the resolution of the dispute. In the spirit of seeking a solution on the dispute, the two Delegations accepted the proposal and further agreed that, the process of consulting the two Heads of State by the HLMT should take place in not more than three months time from 12th July, 2017, after which, further direction shall be availed by the HLMT.

A new TB and silicosis project targeting current and former miners living in Phalombe and Neno is being implemented by PARADISO TB Patients Trust. In addition, the World Bank is financing a project focussing on TB among mine worker in the region. Malawi is included and will be developing improved regulations for the occupational health and safety of mine works.

Paladin Energy is facing very difficult times. The company was forced to appoint administrators after Electricite de France demanded repayment of USD 277 million debt. Paladin has been delisted from the Canadian Stock Exhange (TSX). The Deutsche Bank has subsequently helped out the company:

Paladin Energy administrators have secured a $US60 million, 12-month financing facility to keep the company operating while they work on a rescue deal for the collapsed uranium miner.

The Deutsche Bank loan will refinance secured debt with Nedbank, keep the company’s Langer Heinrich mine in Namibia operating and provide additional working capital across the group.

Promising news for mine development in Malawi

Yet Nyala Mining has been waiting for government to give permission to use equipment it purchased over two years ago on the approval of government. This delay is preventing the creation of 150 jobs at Malawi’s largest gemstone mine.

Following a cabinet reshuffle, Aggrey Masi MP took over as Minister of Natural Resources, Energy and Mining. After just a few days in the role, he launched Malawi’s Extractive Industries Transparency Initiative (EITI) process and first report. If you don’t have time to read the full report, take a look at my three recent pieces.

Ephraim Munthali writing for The Nation celebrated the first Malawi EITI report, and reminded stakeholders to ensure information is in the public domain:

Government itself has been kind of abetting this lack of information sharing in that Capital Hill too has failed to make public information about contracts, tax agreements, production levels and sometimes even procedures on how certain permits, for example, were awarded to particular companies.

That is where the problem is—information vacuum always begets rumours, half-truths and outright lies because someone simply walks in to fill that gap with whatever he or she thinks or believes knows. By the time you want to correct with facts, the damage is done, especially in a country with a fledgling mining tradition.

It is why the MWEITI report is such a crucial tool—it forces both companies and governments to be transparent about license applications and how they have been awarded; how the resources, should they be found, will be shared among government, investors and even the communities.

Few will be suspicious about truckloads of ‘samples’ if someone bothered to explain why so much has to be taken away and take time to share the findings thereafter. It is why some of us were fighting for the Access to Information (ATI) Act, although its operationalisation remains a challenge. We wanted information that is in the public interest to be accessible both on demand and voluntarily by those holding it.

Other bits and pieces:

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