Malawi’s Mining, Oil and Gas News #24: March 2017
For what it’s worth, Feedspot selected Mining in Malawi as one of the top 60 mining blogs - number 15 to be precise. I also joined NAMISA this month (the Malawi national chapter of the Media Institute of Southern Africa).
Society & Extractives
Godfrey Mfiti led efforts to clean up Lake Malawi National Park this month as part of his ongoing work to protect the environment. Mfiti also launched his book Lake Malawi: The Coming Disaster in Lilongwe at the monthly Wildlife and Environmental Society of Malawi meeting.
Norwegian Ambassador to Malawi Kikkan Haugen took part in the Cape Maclear cleaning exercise and
doubted if the country can become rich if it starts oil exploration on the lake, saying the benefit of the current fresh lake is more than what the country can gain if oil is explored on the lake.
Malawi stands to lose a lot if it allows Lake Malawi to be delisted from Unesco’s list of heritage sites. We need to guard and treasure this with all our hearts
And joining Mfiti’s call for the review of legislation was the National Youth Network for Climate Change and warning against oil exploration in Lake Malawi was Prof Sosten Chiotha, Chancellor College, Regional Director of the Leadership for Environment and Development (LEAD) Southern and Eastern Africa.
In response to concerns, President Arthur Peter Mutharika on World Water Day said
We will keep the lake clean and keep it on the list of world heritage sites. Those who worry about our plans to explore and drill oil have no reason to fear. If we decide to drill oil in the lake, we will ensure we use on-shore clean technology.
We value our Lake and we will ensure we implement measures to protect it, at all cost. But as a country, we need to move forward.
Meanwhile reportage continues on the ‘Malawi’s troubled oil sector: licenses, contracts and their implications‘ report produced by Canada-based Resources for Development, released by Oxfam last month, that documents and analyses incoherent and poor tax terms in agreements signed behind the backs of key senior civil servants and against the advice of the Solicitor General.
- Lake Malawi oil exploration: President Mutharika asked not approve 30-year addendum agreements, Chaponda led negotiations team, The Maravi Post
Residents near Mwabulambo Coal Mining continue to raise concerns that the abandonment of the mine by Eland Coal Mining Company without rehabilitation sinc3e 2015 is making it difficult
to find portable water and good fertile land for farming because the area is polluted and degraded due to poor mining activities
Mkango Resources’s update for March, highlighted
- Exploration to commence on the Thambani uranium project as discussed in the press release announced on 2 February 2017;
- Processing test work to commence in South Africa focused on improving the flotation and hydrometallurgical portions of the flow sheet for Songwe, thereby potentially lowering operating costs;
- Ongoing flotation research at Camborne School of Mines as part of SoS Rare; and
- Continued evaluation of new growth opportunities in the rare earths and green technology metal space.
The exploration company with interests in southern Malawi also announced collaboration with UK-based Metalysis Ltd to
jointly research, develop and commercialise novel rare earth metal alloys for use in three-dimensional (3D) printed permanent magnets
- Miner attracted by growth in market for electric cars, The Times (UK)
Sovereign Metals, targeting low cost production of flake graphite in Malawi continued to announce positive results for exploration work conducted in Malingunde, near Lilongwe. It also announced a JORC resource estimate is ‘expected to be delivered in the coming weeks.
- Minerals found in Lilongwe, The Daily Times
- High grade saprolite-hosted graphite results continue at Malingunde, Sovereign Metals
- Exceptional graphite concentrate purity achieved from Malingunde Saprolite, Sovereign Metals
Also take a look at Irving Resources’ presentation (subsidiary is Spring Stone Ltd exploring for rare earths in Mulanje District), and Paladin Energy commenced arbitration procedures against the Chinese National Nuclear Corporation (CNNC) Overseas Uranium Holdings, regarding Paladin’s restructuring proposal ‘which, if validly exercised, could entitle CNNC to acquire Paladin’s interest in the Langer Heinrich Mine [in Namibia]’.
Maps of Malawi and the ongoing border dispute with Tanzania continue to make the pages of the dailies as Malawi prints new boundary maps.
The President, trusted by 41% of Malawians according to a recent study, made headlines himself during World Water Day:
- Oil drilling on L. Malawi to g ahead—Mutharika, The Nation
- We won’t negotiate over the lake— Peter Mutharika, The Daily Times
- Mutharika says drilling oil in Lake Malawi to go ahead: ‘Lake is wholly Malawian, pride of the nation’, Nyasa Times.
Followed by words of warning Tread carefully on Lake Malawi oil drilling and praise Thumbs up APM, Lake Malawi oil key to economic boom: Nonsense of Tanzania owning part of the lake must stop!.
The oil production sharing agreements are not the only agreements being renegotiated by the government. This month, Vale Logistics sought a guarantee for loans amounting to MWK 1.9 trillion in exchange for road rehabilitation in Mwanza and ‘large volumes of cargo to be moved on the railway‘.
And Lake Malawi has also had its fair share of scrutiny beyond oil exploration following the award of a contract to Khato Civils by Lilongwe Water Board, worth USD 500 million that is guaranteed by government, to pump water from the lake to Lilongwe. Simbi Phiri, Chairperson of Khato, invited eight journalists to South Africa to understand him and his business better in the middle of the month (see Demystifying Simbi Phiri and Golden Matonga’s reflections on the ‘study tour’ here).
But reporting took on a more critical tone following allegations that no feasibility study had been conducted, among other purported irregularities. For more, see Facts around Malawi water scheme don’t wash - amaBhungane Law Society queries Lake Malawi water project - The Nation, More twists to water project - The Daily Times, and Feasibility study not done for Lake Malawi water project – Lilongwe Water Board confirms - Nyasa Times.
The government has also revealed its development priorities for the next five years. Mining was one of nine key priority areas in the Malawi Growth and Development Strategy (which was reviewed here) that came to an end last year. In the new National Development Strategy, the following are prioritised, with the extractive industries falling under the third area:
- Agriculture and climate change management
- Education and skills development
- Energy and industrial development
- Transport and ICT infrastructure
- Health and population management
The government affirmed it is keen on improving the business environment and is now ranked 133 on the World Bank’s ease of doing business index. An improvement: 2016: 141, 2015: 164, and 2014: 171. Meanwhile, efforts to address transparency in the construction sector continue.
And in more good news, the government said it is at an advanced stage in claiming social security money owed to former Malawian miners who worked in South African mines (although the Minister of Labour, Sports and Manpower Development also asked ex-miners to be patient), and the trade portal launched last year is helping trade promotion.
And last but not least, at the beginning of March, 330 kilogrammes of ivory was seized in Thailand; it had been exported from Malawi as rough stones (presumably rose quartz judging by the photographs).
In a conversation with one Malawian miner, he suggested the Department of Mines should learn from Tanzania and Zambia where the government officially verifies and seals stones for export, making it more difficult to change the stones (i.e. from low value to high value, so as to avoid taxes, or from one product to another, like ivory). The Press Release below was published on 8 April 2017 in Malawi News.