Malawi’s top minerals sector projects of 2017 – Mining & Trade Review

Malawi Mining and Trade Review December 2017 Malawi's top minerals sector projects

Malawi’s top minerals sector projects of 2017

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 Resources has entered into an agreement with Telaxis Limited, a wholly owned subsidiary of Noble Group to fund a bankable feasibility study of the Songwe Hill Rare Earth Project and commercialization of new magnet technologies. Telaxis will fund study in return for 49% interest in the project.

The company conducted a pre-feasibility study for Songwe Hill 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.

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 when the second phase is completed.

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 to referral Kamuzu Central Hospital. The company also donates to 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.

Malingunde 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 has announced that it has secured commitments from institutional and sophisticated investors in Australia and the United States to subscribe for 59.1 million new ordinary shares of the Company, to raise gross proceeds of $6.5 million.

The company is seeking to fast-track the project to feasibility study stage after a scoping study conducted in 2015 confirmed Malingunde as the sixth largest graphite deposit in the world. The study confirmed that the deposit 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.

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 this year initiated training programmes for Malawians to better understand the upstream oil industry.

The firm 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, Nkhatabay and Nkhotakota 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 kickstarted a geological mapping exercise and environmental and social sensitization campaigns in the area using a team of local consultants.

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 Hamra Oil, Rak Gas is proceeding with a geological mapping exercise.

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.

Pacific Oil has, therefore, acquired data from government’s airborne geophysical survey conducted with funding from the World Bank and European Union, which it is studying as part of the exploration process.

***

This piece was initially published in Malawi’s Mining & Trade Review Issue Number 56 (December 2017).

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

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One response to “Malawi’s top minerals sector projects of 2017 – Mining & Trade Review

  1. Pingback: Malawi’s Mining, Oil and Gas News #31: November & December 2017 | Mining in Malawi·

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