Malawi’s Mining, Oil and Gas News #32: January 2018

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Malawi’s Mining, Oil and Gas News #32

January 2018

Reflecting on 2017 and looking ahead to 2018

President Mutharika ushered in 2018 with a speech stating that electricity shortages ‘must be over’ in 2018. Diesel generators have arrived to help meet the demand, but the private sector ‘spits fire on blackouts‘ and the Millennium Challenge Account did not select Malawi for a new energy programme.

Further efforts to address the energy deficit are underway with Exim Bank of China agreeing to finance Malawi coal-fired power plant project and the German Development Bank KfW providing a grant to the Government for Malawi-Mozambique interconnector.

The Centre for Human Rights and Rehabilitation had a different take to Mutharika’s optimism as they reflected on human rights and governance in 2017.

2017 was a quiet year for mining, Grain Malunga told The Nation.

Malunga said the sector has been inactive due to uncertainties between the government and some investors. He also said investors were eagerly waiting to see what changes the new mining bill will bring. “We have seen a number of court battles between the government and investors and there has not been proper dialogue between the ministry and the investors,” Malunga said.
He said the passing of the bill is likely to bring sanity in the sector and will give confidence to investors to put more resources into mining activities. Malunga, however, hoped that this year the government will be able to mend fences with the investors.
“I hope both parties will find a platform to address their challenges, thereby having a successful mining sector in 2018.”

The Mining & Trade Review did a roundup of mining in 2017 here.

And the Economist Intelligence Unit sees slow growth in Malawi in 2018. Nevertheless, headline inflation was down to 7.1% in December 2017.

Artisanal and small-scale mining

Bobby Kabango, with The Nation, ran a three-part series on illegal/informal artisanal and small-scale mining in Ntcheu, Neno and Balaka this month.

One of the small-scale miners Elita Simango has been involved in mining gold in Nyuludzi River for a year. Together with her sons, she can fetch around K40 000 a day.

On this particular day, she mined gold weighing 1.51 ounce with a local black market value of K25 000. Yet the same could fetch about K1.4  million on the international market.

Changes in parliament

The Chair of the Parliamentary Committee for Natural Resources and Climate Change, Hon. Werani Chilenga (Member of Parliament for Chitipa South), was removed from his role this month. This was because Chilenga

was among members of Parliament (MPs) who went against the party’s [People’s Party] alleged stance to support the defeated Electoral Reforms Bills during the November meeting of Parliament.

The party through its parliamentrat [sic] leader Ralph Mhone, informed the Speaker’s office’ that Chilenga has been moved to Media and Communications Committee as a member.

Chilenga said the redeployment is a “punishment” for his vote against Electoral Reforms Bill including the proposed 50%+1 system of electing a president.

Developments

Sovereign Metals latest set of results

continue to show zones of discrete, very high-grade saprolite-hosted graphite within the broader mineralised zones over >3.5km of strike.

In the meantime, some residents near the exploration site have raised concerns about the way government has administered compensation related to disturbance of land linke to sampling.

Mkango Resources reported good news and will be able to commence its feasibility study of Songwe Hill Rare Earths Project.

Mkango Resources Ltd. (AIM/TSX-V: MKA) (the “Company” or “Mkango”) is pleased to announce that following receipt of both shareholder and final TSX Venture Exchange approval, investments totalling £6 million (C$10.5 million) have been received by Mkango subsidiaries in accordance with the previously announced agreement (“Agreement”) with Talaxis Limited (“Talaxis”):

  • Talaxis has invested £5 million (C$8.8 million) into Mkango subsidiary, Lancaster Exploration Limited (“Lancaster”), in return for a 20% interest in Lancaster. Lancaster holds the licence for the advanced stage Songwe Hill rare earths project (“Songwe”) in Malawi.
  • The investment into Lancaster will fund the initial phase of the Feasibility Study for Songwe, including an extensive drilling programme starting in the second quarter of 2018, in parallel with ongoing processing flow sheet optimisation and work in relation to the Environmental, Social and Health Impact Assessment.
  • Talaxis has also invested £1 million (C$1.8million) into a new Mkango subsidiary, Maginito Limited (“Maginito”), in return for a 24.5% interest in Maginito.
  • Maginito is focused on neodymium alloy powders, magnet and other technologies relating to electric vehicles and other cleantech applications. This includes the collaboration with Metalysis Ltd announced in September 2017, which is focused on advanced alloys using neodymium or praseodymium with other elements for permanent magnet manufacturing.

There has been little news about Kayelekera Uranium Mine in recent weeks, but apparently India and Malawi are discussing a uranium deal. This comes on the back of a visit by an Indian government delegation to Malawi last year to continue cooperation for technical assistance in mining. However, reports on the Australian stock exchange show that Paladin is undergoing a major capital restructure. See here for further information and in great detail, here.

Intra Energy continues to discuss with buyers for its Malcoal project and with interested parties for implementation of Project Pamodzi, a 120 MW coal power station in Malawi.

Oil…

Things also seemed to have quietened down around the dispute between Malawi and Tanzania over Lake Malawi and the Foreign Affairs Ministry pleads for patience. Yet the Anti-Corruption Bureau continues to make headway in its investigation of former president Joyce Banda’s Mudzi Transformation Trust in relation to payments received from RAK Gas believed to be made in relation to the award of contracts and licences.

…opportunities…

Malawians are invited to apply to attend the ‘Geo-data Digitization and Mapping of Development Minerals Training Workshop’ from 18th to 29th June, 2018 Dar-es-Salaam, Tanzania, organised by the ACP-EU Development Minerals Programme. (Deadline 2 Feb 2018)

Oxfam Malawi has a job opening for an Extractive Industry Program Officer. (Deadline 7 Feb 2018)

And Malawi’s third investment forum is slated for 11 and 12 June this year.

…and other things!

Check out Malawi’s online cadastre with a new function – search by commodity type: portals.flexicadastre.com/malawi/

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