Limestone producers in southern Malawi (Gilbert 2015)

Last week, the study Malawian Voices, Malawi’s Natural Resources was released. This records the findings of a listening exercise of Malawi’s extractive industries conducted by Daniel Gilbert, postgraduate student of the University of Dundee and Extractive Industries SourceBook webmaster, and commissioned by the Scotland Malawi Partnership.

Gilbert concluded after a 5-week research project that

The findings demonstrate that the range of views, and level of consensus amongst stakeholders, varies across the sectors. The petroleum (oil and gas) sector is contentious, not least because it is still in the exploratory stage with the potential hydrocarbon reserves located under Lake Malawi. This heightens the risks associated with extracting these reserves, particularly with respect to impact on the environment and livelihoods. Despite the large-scale mining sector’s slower development than in neighbouring countries, there is a general consensus amongst the stakeholder groups that the mining should be developed.

This report’s analysis suggests that there are significant risks associated with developing EI in Malawi, in particular, environmental and social risks, but also considerable opportunities. Presently, these risks are assessed by stakeholders to be too great for the petroleum sector. However, while investment, regulation and capacity building would be required, there is evidence that, in their different ways, both Large-Scale Mining (LSM) and Artisanal and Small-scale Mining (ASM) could provide a much needed source of sustainable economic development for Malawi.

If approached in such a way as to:

1. Minimise environmental impact;
2. Protect miners’ and other affected peoples’ rights;
3. Incentivise investment; and
4. Effectively and fairly manage how generated resources are utilised and distributed, there appears to be the motivation, support, and potential for this to happen.

Gilbert conducted 32 semi-structured stakeholder interviews with 40 different interviewees in Malawi. Of these interviewees, 12 were from non-governmental organisations, 12 were from the extractive industries sector (both cooperatives and private companies), nine were from donor agencies, and seven were (former and current) civil servants.

A number of conclusions were drawn in the study.

1. Further research regarding the mining of bauxite in Malawi would be beneficial. Bauxite mining issues are particularly sensitive in the southeastern Mulanje area of the country, part of which is a UNESCO World Heritage Site, and in the environs of Lake Chilwa, which has Ramsar recognition as a wetland of international importance;
2. Government of Malawi needs to ensure that more local benefit (as opposed to just national benefit) accrues from revenue raised from large-scale mining, so that local people can see the benefits directly, which implies establishing structures within government to ensure that this consistently happens, such as ensuring Government of Malawi revenues from the extractive industries sector is held in a different, discrete, account and not consolidated as simply part of Malawi’s “Account 1” general budgetary account;
3. Existing donor funding for the Tilitonse Fund should be maintained;
4. Ensuring environmental sustainability regarding the extractive industries is critical, and far more needs to be done in this regard. Strategic Environmental Assessments should be undertaken on a strategic, thorough and consistent basis to ensure that environmental degradation is avoided altogether, not merely mitigated;
5. There is a strong consensus in favour of thorough legislative reform with respect to both mining and petroleum. The current work on this by Government of Malawi needs to be concluded effectively and efficiently;
6. Delays in large-scale mining licensing can be lengthy and this can discourage investment. Licensing of large-scale mining should proceed in a timely, efficient and efficacious manner;
7. Government of Malawi environmental monitoring needs strengthening to reassure stakeholders about large-scale mining’s performance therein. This is not just about accurately collecting data but Government of Malawi action further to its analysis; and
8. Action needs to be taken to reduce energy costs for large-scale mining, thus enhancing its economic viability, through the provision by ESCOM of affordable and reliable power to large-scale mining sites.

According to Gilbert, the Scotland Malawi Partnership’s specific interest in Malawi’s extractive industries sector is in response to a request by the Government of Malawi for development partners, including those from Scotland, to appreciate the strategic importance of this sector to Malawi’s future economic development. As a result, Gilbert makes several interesting suggestions for Scotland/Scottish organisation’s partnership role:

• Develop the existing advisory relationship between Government of Malawi and University of Dundee, for example in the development and implementation of new extractive industries related policy
• Assist the coordination among actors active in the extractive industries sector, avoiding duplication with the efforts of other international actors including both development agencies (donors) and international organisations, e.g. United Nations agencies
• Work in partnership with the Government of Malawi toward developing capacity in departments linked to extractive industries, for example the Department of Mining
• Ensure that the voice of civil society is represented in the consultations
• Give serious consideration to support the creation and operation in-country of a Scientific Testing Laboratory for mineral samples

Download the report here: Malawian Voices, Malawi’s Natural Resources

Note: I (Rachel Etter) was interviewed in this listening exercise.