Indian investors launch new coal mine in Karonga, Malawi

201808 Malawi Mining & Trade Review Coal Kasikizi

New coal mine launched in Karonga

…“Kasikizi set to become Malawi’s largest coal producer” 

…Consortium mulling over plans for 50MW power station

By Marcel Chimwala

A consortium of local and Indian investors has partnered a local firm Zagaf Cement to launch the Kasikizi Coal Mine in Karonga, which it plans to develop into the largest supplier of coal in the country.

Managing Director for Kasikizi K.S. Gurulingaswamy said at the commissioning ceremony of a new coal crusher at the mine, which also marked the official launch of the mine located in Group Village Headman Mweninguwe’s area, that Kasikizi will produce 20,000 tonnes of coal per month.

He said the consortium is also planning to set up a coal fired power plant with a capacity of 50MW, which will be supplied to the national power grid.

We need support from all stakeholders including the government, traditional leaders and the local community to enable this important project succeed. We are proud to be in Malawi, we are proud to be in Karonga,

said Gurulingaswamy.

Another Director for the company, Grain Malunga, told the gathering that he is excited that the project which he has worked on as a geologist has culminated into a coal mine.

Malunga explained that Zagaf Cement Sales, which holds minerals rights for the area, initially started exploring for limestone but after extensive studies discovered that it is not suitable for cement production as it contains a lot of dolomite.

He, however, said during the exploration work, he discovered that the area has a sizeable deposit of coal, which prompted them to seek a go-ahead from the Department of Mines to add coal into the exclusive prospecting licence.

Malunga said subsequent exploration work has proved that there is quality coal at the site which is very much better that Mozambican coal, being dumped in the country.

He explained that overdependence on coal imports is not sustainable as it is a drain on foreign exchange which can be used on other important commodities.

Another Director, Aslam Gaffar, agreed with Malunga saying it is unfortunate that despite having proven coal reserves, Malawi continues to drain the much-needed foreign exchange through importation of coal from neighbouring countries such as Mozambique and Zimbabwe.

He cited his company, Cement Products Limited (CPL), as a major consumer of imported coal revealing that it uses 3,000 tonnes of coal per month.

Gaffar, who holds 35% shareholding in the new Kasikizi venture through Zagaf Cement Sales, said the opening of the new coal mine, therefore, gives CPL a local source of coal, which is important for import substitution.

Of course, the distance is long from Kasikizi to Mangochi but we have devised a way to cater for that. Thus trucks coming to supply CPL cement to Karonga will be coming back to Mangochi loaded with coal. We do not have to import everything when we can source locally,

said Gaffar.

In his speech, Deputy Director for Mines Department Peter Chilumanga who represented the Malawi Government at the ceremony said as a facilitator of investment, the   government is more than excited to see the Kasikizi investment culminating into something big for the local and national economy.

We are more than excited because the mine has already started employing local people in so doing contributing to rural development, and will provide taxes and royalties to government,

said Chilumanga.

He said the government also welcomes plans by the investor to establish a thermal power plant as this will help the government overcome power outages which have a knock on effect on all the sectors of the economy.

Chilumanga asked the investor to observe safety and environmental protection measures in operating the mine.

He said:

We would like to encourage you to operate as safely as possible by following all safety and environmental protection guidelines and regulations.

You also have to consider to go beyond mining and energy production and look at other alternatives such as the possibility of producing briquettes for domestic use to avoid environmental degradation.

Chief Kyungu asked the investor to desist from exploitation and ensure fair treatment of the local employees and the surrounding community.

He also appealed to the Malawi Police Service to provide security to the area including the equipment brought by the investor.

Indian High Commissioner to Malawi Suresh Kumar Menon said the Indian Government is delighted to see Indian and Malawian investors partnering in such a significant mining project.

Menon said:

Such a partnership is a symbol of strong ties existing between India and Malawi.

As India, we want to take our interest in Malawi minerals to a higher level since we are one of the greatest consumers of minerals in the world.

***

This piece was initially published in Malawi’s Mining & Trade Review Issue Number 64 (August 2018).

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

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