Malawi’s Minister of Natural Resources, Energy and Mining, Atupele Muluzi, recently attended the Africa Down Under Conference in Perth, Australia, hosted by Australia’s Paydirt from 3 to 5 September. Below is Muluzi’s statement after attending the meeting.
I am privileged and honoured to report to you that I led a four-man delegation from the Ministry of Natural Resources, Energy and Mines to the Fifty Third(53rd) Africa-Down-Under International Conference on Mining Investment which took place in the City of Perth, Western Australia from the 3rd to 5th September 2014.
Africa- Down- Under (ADU) is an annual Mining Investment Conference which is organized by the Australian Government for African countries to showcase their investment potentials with a view of attracting Australian companies into investing in Africa. The event attracted 33 African Mining Ministers, African mining industry players, academic speakers and an impressive list of both local and international companies.
Objectives of the 2014 ADU conference:-
- To promote and provide a platform for the establishment of business partnerships, attract and accelerate mining investments as well as to uncover African potential opportunities mainly in the mining (solid minerals) sector.
- Provide an opportunity for Australian companies to make contact with African Governments and together identify opportunities that can enhance their mining industry and commercial opportunities.
- Provide an opportunity to show how the Australian Government is committed to strengthening Australia’s engagement Africa’s mining sector by giving the sector the priority it requires and deserves.
- Support Africa’s efforts in promoting economic growth and prosperity through investment and trade in the mineral sector and to accelerate Africa’s progress towards the achievement of its Millennium Development Goals.
- Using Australian companies to bring world-class technology and expertise to their Africa operations through their well-earned reputation, integrity, good mining practice, good mining safety record, environmental sustainability and protection and assisting in developing requisite African mining skills in their workforce, just to mention a few.
I am pleased to inform you that the event attracted the participation of over 2300 delegates, 30 exhibitors and at least 300 exhibition visitors, coming from over 30 different African, European and Asian countries.
2.0 Opening Session
The conference was officially opened by H.E. Colin Barnet, the Prime Minister of Western Australia State on 3rd September 2014. In his opening remarks, he highlighted the importance of the conference and the need for Africa and Australia to join hands in the mineral investment sector with a view of improving growth of African countries economically, uplifting people’s lives and assimilation of technologies.
The Premier reiterated the Australian Government’s commitment to ensuring that Australia’s investment meets Africa’s economic and development objectives. He also indicated his Government’s vision of continuously working closely with African governments with a view of maximizing opportunities for investment, skills development, technology transfer, community development and sustainable environmental management.
The Premier said that Australia is in a unique position to help build Africa’s mineral resource sector and harness its economic potential. He spoke of Australian Government’s priority of establishing high-level contact with African Governments, to personally convey Australia’s commitment to enhanced long-term relationships with Africa.
In his conclusion the Premier highlighted the importance of Australia’s linkages with African growth through business, education and people-to-people both as a friend and a partner.
3.0 Main Proceedings
During the three-day meeting, there was an update on the progress of Australian mining projects in Africa by different investors as well as discussing major challenges facing the sector. The main challenges highlighted included production capacities, marketing of minerals/ products and finally a discussion on the recent emergence of Ebola disease and its potential effects on mining, especially in West Africa.
Also under discussion were the future investments in the mineral sector and aspects impacting on mineral sector growth in Africa. Energy is of high priority particularly in mining sector investment. The potential for energy production in many of the African countries is much higher than the current energy availability and ongoing projects aimed at increasing the production of electricity to guarantee energy adequacy.
Other issues presented include strategies for the African mining sector, particularly the successes of different projects through promotion of local capacity, transfer of knowledge and strategies regarding the role that the State and state owned companies on major projects versus the private sector interests.
Government of Malawi’s message at the conference
As at the last financial year, the contribution from the mining sector to the country’s GDP stood at an average of 10%. Government of Malawi through the Ministry of Natural Resources, Energy and Mines believes that with clear structures put in place, the mining sector can contribute over 30% to the country’s GDP. The Government of Malawi’s key message at the conference was that Malawi is now open for business with key reforms which are being put in place within the mining sector to attract and protect long term investment and at the same time maximize returns to the country.
Some of the reforms within the mining sector include:-
- Review of the Mines and Minerals Act 1981.
- Completion of the Airborne Geophysical Survey of the whole country and release of the data to potential investors.
- One stop mineral sector documentation and mineral information centre
- Modern Mining Cadastre and Computerised Registry System
- Strengthening transparency and accountability of the sector including the decision to join of EITI.
- Revision and development of an investor friendly but best world practice Fiscal regime that provides a win-win situation for Malawi and the investor yet reducing management and implementation.
- Energy and supportive infrastructure such as improving electricity generation and transmission capacity, rail and road network infrastructure among others
4.0 Companies and organizations meeting
We had an opportunity to hold side meetings with companies operating in Malawi and mining investors wishing to invest in Malawi. Some of the issues discussed include the business climate in Malawi, challenges in the mining sector, role of mining companies in Malawi in attracting foreign investment and growth opportunities in the mining sector.
Below are some of the issues raised from some of the meetings we held in Perth during the conference.
Paladin Africa Limited – John Borshoff
- Being the single largest foreign direct investment (FDI) in Malawi’s mining sector, Paladin Africa through its CEO John Borshoff confirmed its commitment to the Kayelekera Project and in particular to restart production when Uranium price rises to $ 75/lb for benchmark profitability to occur.
- This message was delivered at a private four hour presentation at Paladin’s office which was introduced by John Borshoff the CEO and Rick Crabb the Chairman followed by presentations from the senior executive management attending.
- We were briefed on the current care and maintenance (C&M) position which is currently in convalescence and the optimism for a full recovery and a return to a productive life.
- Paladin Africa welcomed the new Government’s open approach to direct foreign investment, minerals and fiscal policy changes and anti-corruption focus.
- During our meeting, Paladin urged the Government of Malawi to promote the country’s mineral potential to the possible maximum to encourage more companies to explore and develop.
- Paladin Africa offered its willingness to assist Malawi’s geological and geophysical departments through the promotion of Malawi’s geological potential from the nationwide geophysical survey recently completed.
- Paladin Africa proposed the possibility of appropriate academics coming to Malawi from Australia to teach specialties at Malawian Universities/ technical colleges on short 3 month courses to benefit Malawian students.
Intra Energy - Graeme Robertson
- Our meeting discussed the clear synergies between agricultural and mining sectors.
- The possibility of increasing Malawi’s power production capacity and its ability to export power to its neighbouring countries.
- The meeting highlighted that the problems facing existing transmission lines are the bottleneck
- There were recommendations that increasing transmission line capacity should come after bringing on line 3 new 40MW power stations. Preferable as this would establish a track record of successfully delivering projects of this nature and that smaller 40MW stations can be added incrementally.
- Media note: MALCOAL has the highest proportion of females to male working on a mine in Africa
Sovereign Metals - Julian Stephens and Matt Syme
- Sovereign metals expressed interest in exploring graphite deposits and the burgeoning demand for graphite in the US
- Sovereign metals has a smaller interest in copper (presently operating a mine in Queensland, AUS)
- During the meeting, Sovereign Metals commented that the reliability of land titles and transparency of mining processes were critical for potential investors
- Based on various media articles on Malawi’s mining sector, Sovereign urged the Government of Malawi to “Set the rules and stick to the rules”.
- They also commented that they pay less attention to publications such as the Fraser Institute and more attention to “word of mouth” from other miners on the ground hence the need to improve on business relations within Malawi’s current mining sector.
- We talked about the various educational and training programs that the Australian Government provides.
- Mr Barnes mentioned that individual embassies including those in South Africa and Zimbabwe (responsible for Malawi) have their own budgets for funding local / specific mining projects.
- It is worth noting that federally, Australia provides long and short term scholarships through the Australia Awards
- In partnership with the Australian Government through an Australian Aid initiative, The University of Western Australia and The University of Queensland have established the International Mining for Development Centre (IM4DC) to assist in lifting the quality of life in developing nations through a more sustainable use of mineral and energy resources.
- It was the IM4DC program which delivered training to the Malawian delegation that visited Perth and Canberra in April 2014.
Woodside Oil and Gas - Tim Walster and Jayne Baird
- At this meeting, Woodside made it clear that they were still at very early stages of investigating and were not about to make an investment in Malawi imminently but showed some high level interest in mining under Lake Malawi
- Woodside spoke of their “one global standard” policy and pointed out the experiences they had working in sensitive marine environments including off the Western Australian coast at Exmouth.
- Woodside have a “gated” approach to projects where they assess, and re-assess projects at each stage - only moving forward when safety (of people and environment) can be assured.
Swala Energy - Neil Taylor and Ken Russell
- Swala talked extensively about their “local model” - structures that encourage locals to participate in the financing of the project from the very earliest stages.
- Swala referenced a project in Tanzania which is 42% owned by Tanzanians.
- Swala Energy advised that a strong focus on local participation may have appeal in Malawi by way of overcoming the initial skepticism associated with foreign direct investment (FDI).
Based on these discussions it is clear that Malawi left a mark at the conference despite its mineral sector being in embryonic stage. The Ministry is equally convinced that our presentation will without doubt enable more and other investors who may have not known or had interest in Malawi’s mineral potential to come and examine our mineral potential.
- The company gave a brief on their business undertakings in Malawi at present such as the testing of samples at one of China’s mineral processing institutes with a view of maximizing niobium and other mineral exploration.
- Globe Metals gave brief details of their five hundred million dollars ($500,000,000) investment in the country’s mining sector.
- We also discussed their expectation from the mining agreement which is under discussion with the Government of Malawi and guarantees of power supply from ESCOM to avoid use of diesel generated power that increases the cost of doing business in the country.
5.0 Concluding Remarks
In conclusion, the Ministry wishes to reiterate the success of the conference and Malawi’s presentation in terms of its attractiveness to mineral investment. One key factor is that there is indeed enormous competition for mining investments in Africa against limited FDI.
It is my considered view that with the efforts being undertaken by the current Government to improve the minerals sector, more investors will continue to come and inquire on investment potential especially after the completion of the Airborne Geophysical Survey interpretation besides current inquiries underway.
I would like to assure you that we will endeavour to continuously improve Malawi’s mineral attractiveness as well as attend conferences of this nature with a view of continuously attracting more investors to the sector.
May God bless Malawi through its natural resources.
Hon. Atupele Austin Muluzi (M.P), Minister of Natural Resources, Energy and Mines