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Eye on Malawi’s EITI: Increasing transparency in the management of rights to Malawi’s minerals

Malawi will soon have a mineral rights management system and freely accessible online portal to improve transparency and coordination in the mining sector. The internal and external systems will be developed by Spatial Dimension that won the contract under the Mining Governance and Growth Support Project that the Government is implementing through a USD 25m loan from the World Bank and a EUR 4.51m grant from the European Union.

The aim is to establish an internal government system that includes data relevant to licencing, mapping, inspections, environmental compliance and revenue. The new system will improve the way the government manages the application process for potential investors and monitors, oversees compliance of and collects revenue from existing licence holders. Housed in the Department of Mines Headquarters in Lilongwe, regional mining offices will also have access to the system along with other relevant government departments and agencies, such as the Malawi Revenue Authority.

Some of the information from the internal system that should be up to date and accurate will be synced with an online platform that all stakeholders can access. This will be in the form of a map, powered by Esri, with layers of different types of licences with associated licence information such as company ownership, issuance and expiry date and type of minerals. The image is an example for Zambia’s portal. There will likely be additional access for licence holders so that they have a clear overview of necessary actions – such as the payment of fees or submission of a report.

At the inception meeting, held in July 2016, the Department of Mines and Spatial Dimension presented some of the existing challenges with the way licences are managed – disparate and no central database, poor overlap validation of licences, lack of proactive remedy to non-compliance and overdue payments, no external notifications for fees owed or expiry, and poor integration with other government systems. Efforts have been made in the past to implement a cadastral based system, but at present the Department of Mines has been using a paper-based and manual GIS-based system to manage licences.

The EITI Secretariat expects that this system will make it is easier to track, ensure collection and follow up on revenue per licence and per company. Giving greater transparency to revenue management is a necessary measure to ensure that taxes, rents and royalties are collected from mining and exploration companies. This evidence will be collated in the first EITI report due in April 2017.

However, the Flexi Cadastre that Spatial Dimension is installing will only be as good as the system users. Consultant on the project, Charles Young, explained that successful implementation requires strong leadership and long-term dedicated staff. In addition, Malawi must pass the Mines and Minerals Bill swiftly so that it can be reflected in the system otherwise greater costs will be incurred later on to modify the system. Lastly, the Government must have in place a financial sustainability plan to pay the annual maintenance and upgrade fees to ensure the system runs after the project phases out.

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The piece “Eye on Malawi’s EITI: Increasing transparency in the management of rights to Malawi’s minerals” featured above was initially published in Malawi’s Mining & Trade Review Issue Number 40  that is circulating this August 2016.

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