Reflections on issues raised at the Malawi Alternative Mining Indaba 2017 with Grain Malunga

Reflections on Issues Raised at Malawi’s Alternative Mining Indaba 2017

TECHNICAL FILE

By Grain Wyson Phillip Malunga FIMMM – Mining and Environmental Management Expert201801 Malawi Mining & Trade Review Alternative Mining Indaba 2017.png

Abstract

The minerals sector in Malawi is at infancy stage.  Information about management of the sector and community benefit sharing is crucial at this moment.  Community expectation needs to be managed properly in order not to derail the exploration and mining stages Malawi is undergoing.

The paper reflects on observations and questions posed during the Malawi CSOs’ alternative Mining Indaba held in December 2017.

INTRODUCTION

The Norwegian Church Aid (NCA), OXFAM and Open Society Initiative for Southern Africa (OSISA) organized an alternative Mining Indaba (AMNI2017) under the theme “Transforming Malawi’s Natural Resources Sustainable Development”. This happened on 18th and 19th December 2017.  Delegates were drawn from the members of Natural Resources Justice Network (NRJN), Malawi Chamber of Mines, Small Scale Mining Associations and government.

Some of the grey areas brought on the table are highlighted and explained below.

ISSUES AND EXPLANATION

What constitute mineral resources development and when do communities earn tangible benefits?

Mineral Resource Development starts from exploration for the target minerals. This involves review of previous work done and targeting areas where occurrences of minerals were reported. Those areas are visited, mapped and samples taken. Samples are collected from trenches, pits and surface exposures with the intention of confirming their presence, composition and spread of their occurrence. This helps to zero in on prospective areas and carry further detailed sampling in order to establish the mode of occurrence of the mineral and economics on grade, quality, processing and profitability of undertaking such work. This may take a period of three to seven years depending on the outcome of previous exploration activities.

Community engagement starts soon after grant of Exploration Licence in order for them to understand what will happen in their customary land and any benefit that may accrue to them for changing their life style and activity.  This may involve a universally agreed compensation for disruption of economic activities in the targeted land. Social and environmental mitigation measures are undertaken during project scoping in order to obtain community nod on the project (social contract).

Tangible benefits for the community happen during next phase of detailed studies for feasibility analysis.  This includes assistance to social projects such as education, access infrastructure, agriculture, water and sanitation. During this engagement acknowledgement on the role played by government should not be obscured.

After feasibility studies have been conducted and the project proved socially, technically and economically viable, a Mining Development Agreement (MDA) can be entered between government and the developer. The communities stand to benefit too if a Community Development Agreement (CDA) is also established in order to avoid up hazard and unreasonable demands from either party.

What has transformed in the minerals sector since engagement with Natural Resources Justice Network?

From the author’s perspective, there has been great achievement in advocacy and government quest in order to transform the minerals sector. In order to comply with Open Government initiatives, Malawi, in 2014, established Extractive Industries Transparency Initiative (MWEITI) with the purpose of promoting accountability in fiscal and revenue management between government and the private sector. The institution has also published all existing Mining Development Agreements. Companies, Civil Society (NRJN) and Government form the Multi-stakeholder Steering Group (MSG). Access to Information Act was established, in 2016, with guidelines/regulations being developed now. The Mining Governance and Growth Support Project (MGGSP) has helped achieve the following;

  • Tax regime reformation with a stability period clause
  • Building capacity for tertiary education
  • Establishment of geo-data centre
  • Development of policies to guide the development of the petroleum sector and artisanal/small scale mining (ASM) sector.

Results of Airborne Geophysical Survey were released and government is undertaking ground truthing in order to update geological maps and improve mineral prospectivity of the country. This is being undertaken by a Consortium of French, British and Finnish Geological Surveys with quality monitoring by South African Council for Geoscience.

What is the role of District Councils in Mining?

The Mines and Minerals Act (1981) vests the licencing of mineral permits in the hands of local councils. District Councils are supposed to issue licences for commercial activities related with extraction of clays, sand and stone for local development activities. This devolution requires establishment of District Officers responsible for Mining Activities. Current scenario shows that this responsibility is either under District Environment Officers or District Forestry Officers. It is important that this sector is institutionalized in order to monitor the performance of the extractive sector in bringing community benefit sharing and environmental management at local level. District Councils are losing a lot of revenue in this sector that can augment their revenue sustainability. These activities will be viable if Area Development Committees and Village Development Committees are engaged under Natural Resources Management Committees.

How can ASM benefit from formal financing and gemstone marketing?

The Artisanal/Small Scale Mining Sector is mostly informal and therefore lacks transparency in business transactions.  This makes it difficult to raise finance through formal financial sector and their licencing period is too short to come up with a meaningful business plan and medium term finance borrowing. Recommendation is to have at least a three year licence and a formal market outlet/auctioning with assistance from the Chamber of Mines and Energy or an Auction Holding Company. This should be clearly outlined in the Artisanal and Small scale Mining Policy. Local small scale mining associations should be properly constituted and be affiliated to the Chamber of Mines for technical support.

How can the sector improve on community engagement?

The sector lacks sincere professional advocacy. There is a lot of misinformation on community benefit sharing and at what stage of mineral resource development.  Most financial providers to the Civil Society have hidden agendas of distabilising national economic development. These providers take advantage of desperate nature of other Non-State Actors and individual activists in misinforming the people through the media on issues of environment and benefit sharing. Use of community radios on issues of natural resources governance can bring beneficial debates and good relationship between companies and communities.

What is happening to post closure rehabilitation?

All mining to large scale mining activities require Post Closure Rehabilitation Plan. Companies are supposed to notify the Minister responsible or Commissioner for Mines and Minerals a year in advance. The same should happen with mining operations that are to go under care and maintenance.

Changalume Limestone Quarry and Eland Coal Mines did not act professionally.  Government should intervene under these circumstances. Changalume was quickly closed and handed over to government taking advantage of a rushed political process. Eland Coal Mines was dogged with mismanagement and uncoordinated negotiation process between communities and government. There was no proper channel of grievance handling.

It is recommended that a Technical Committee should be set up to handle processes of post closure mine rehabilitation and environmental management through setting up of an Environmental Bond and periodical monitoring of mined out portions.

Who drafted the new Mines and Minerals Bill?

This bill was drafted after along consultative process that involved ADCs, Government Institutions (including Parliament), Civil Society and the Private Sector. Regional and national workshops were conducted on the understanding that representation was for a wider stakeholder. The Mines and Minerals Policy, 2013 formed the foundation for this process. A consultant was engaged by the World Bank through MGGSP. The bill was later handed over to Ministry of Justice for vetting and submission to cabinet before passing it on to Parliament for passing it into law.

REFLECTION FROM THE QUESTIONS

The process of sustainable development in the Minerals Sector requires honesty, integrity and meaningful engagement. There is need for trust between government and non-state actors for meaningful economic development to benefit the grass root communities. A proper communication strategy between government, companies and civil society should be established. The Ministry of Natural Resources Energy and Mining should appoint a Desk Officer to handle issues related with Civil Society and communities in order to ensure maximum participation and establishment of efficient line of communication for sustainable development in the minerals sector.

***

This piece was initially published in Malawi’s Mining & Trade Review Issue Number 57 (January 2018).

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

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