Spring Stone Limited, a subsidiary of the Canadian Gold Canyon Resources carrying out exploration activities in Malawi’s Mulanje mountain, has been handed a court injunction by the High Court in Blantyre to cease activities. Mulanje, or Mulanje Mountain Biosphere Reserve, is on the tentative list to become a UNESCO World Heritage Site because “Mulanje massif is singled out as an interesting feature scientifically, educationally, socially and for research purposes” and the Government of Malawi has committed to this.
Below we try to piece together the story, however, the role of some actors is not clear.
Overview of the REE exploration in Chambe Basin, Mulanje
For further information, consult Gold Canyon Resources’ technical report from December 2011 (NI 43-101) from December 2011 and the Management Discussion and Analysis February 2012, where the following information can be found.
- The Property licence was acquired on 18 March of 2011 for a period of 3 years, with an option to renew the Licence in accordance with Section 50 of the Malawi Mines and Minerals Act 1981.
- Property Description: Chambe Basin is part of Malawi Exclusive Prospecting Licence 0325/11, a rectangular block about 40 km E-W and 27 km N-S with an area of 1,050 sq km, within which the licencee has exclusive rights to prospect for rare earths (“REE”) and bauxite.
- Conditions specified in the licence include requirements to commence operations within 3 months of granting of the licence, to supply quarterly progress reports and annual reports, to annually report the proposed program and budget for the next year’s work, to employ and train Malawian citizens, to use goods and services from Malawi whenever possible, to conserve the environment, and to reclaim and restore areas damaged by exploration activities. Any shortfall from the proposed expenditures is considered a debt to the Republic of Malawi.
- The exploration provides work and training for at least 25 citizens of Malawi including geologists, drillers, porters, samplers, and drivers, many from nearby villages such as Nakoya.
- The exclusive prospecting licenses EPL 0325/11 is held in the name of Spring Stone Limited, a private Malawi company that is a 100% subsidiary of Spring Stone Exploration Inc., a private company registered in British Columbia and a 100% subsidiary of Canadian public company Gold Canyon Resources Inc. The project is a joint venture between Gold Canyon Resources Inc, and Japan Oil, Gas and Metals National Corporation (JOGMEC), which provides 67% of funding for Spring Stone Exploration Inc. and consequently has a 67% equity option holding in licence-holder Spring Stone Ltd.
- Mitsui Mineral Development Engineering Co., Ltd (MINDECO), in Japan, has been contracted as the operator of the program.
- Paid $84,375 for an Exclusive Prospecting Licence to explore a 1,400 square kilometre area in the Mangochi region of Malawi, Africa. Exploration work on the Mangochi REE Project, like the Mulanje REE Project, will be carried out by SSL, pursuant to the terms of the JEA with JOGMEC.
- The Chambe Basin REE project should reach prefeasibility by mid-2013
In early November 2012, Spring Stone along with the Mulanje Mountain Conservation Trust (MMCT) allegedly received a signed letter by the Member of Parliament for Mulanje Pasani and over 60 group village headmen, among others, in which the company and trust were requested to stop exploration because of the adverse impact it has had on the area. From the letter,
It has come to our notice that the two companies did not come her to conserve and explore the resources of the mountain but rather destroyed them. […]
During our visit to the top of the mountain, we observed that the mountain which used to have a thick forest has been reduced to a bare ground and this development has enabled Springstone Malawi Limited to embark on mining. […]
If they do not take heed of these instructions, we as custodians of the mountain, will have no option but take the laws into our hands by physically chasing them out.
It is troublesome that the MMCT, funded by the World Bank, is reported to be implicated in the dispute between local communities and the mining company. It is not clear how this is possible since some of the people who allegedly have taken MMCT to court also sit on or work for organisations that are represented on the Board of Governors of MMCT.
According to Gold Canyon Resources’ Technical Report, the MMCT may be involved in removing exotic species from the area in an attempt to reforest the reserve with endemic species.
Although mining can apparently proceed within this reserve, development must be done in a way that conserves the environment, especially water catchment areas such as the Chambe Basin. There is also now an interest in eradicating introduced plants such as the Mexican pine, Himalayan raspberry and the Australian eucalyptus and in replanting the native cypress. Clearly, it is too early to consider the impact of any eventual mine but the Joint Venture has proposed that it might be possible to combine restoration of a mined area with reforestation of the basin with cypress.
The Mulanje Mountain Conservation Trust was founded in 2000 with funding by the World Bank for research and conservation of biological diversity and promotion of sustainable use of natural resources in the Mulanje Mountain Forest Reserve. It has advocated removal of introduced flora and restoration of endemic species, particularly the Mulanje cypress, and has lead opposition to proposed mining of bauxite from the Mulanje Massif, principally on the Lichenya Plateau. While solution extraction of REE from soils in Chambe Basin has little in common with the stripping and removal of large tonnages of bauxite, environmental issues of REE resource extraction if it affected streams or created dust, etc. will need to be considered.
It is notable that in 2010, the MMCT was reported to be active in opposing the the extraction of bauxite from the Lichenya Plateau, Mulanje,
Gondo Resources, a Zimbabwean firm investing heavily in Africa, wants to strip mine aluminum ore, called Bauxite, from the Lichenya Plateau, the most preserved and protected plateau on the mountain. It lies right above the town of Mulanje itself, and the effluent seepage from the mining process may threaten the town’s booming tea industry, one of Malawi’s biggest foreign exchange earners.
“In no respect do we even see mining as being economically feasible, much less environmentally, so why should anyone look at actually doing it?” asks Carl Bruessow, head of the Mulanje Mountain Conservation Trust. “This is based on information like Anglo American Mining’s assessment in the 1960s. As well, the tea growers feel that their livelihood will be ruined from that dust and pollution from mining, and doubtless the tea industry, especially poor farmers, would be most affected.”
The conservation trust is based in the picturesque town. Created in 2000 after 10 years of struggle, the trust aims to protect biodiversity and the natural heritage of the mountain. It is supported by the World Bank, the U.S. Agency for International Development, the European Union, the Norwegian government, the KEW Royal Botanical Gardens, Earthwatch, Practical Action, the IUCN Center of Plant Diversity and the U.N. Global Biosphere Reserve Program.
The current stand-off between MMCT is shrouded by a cloud of mystery at present. We will continue to explore this further.
Following this letter, the mining company suspended activities due to “a public uproar over their activities” according to Chikondi Juma, a journalist with the Daily Times. District Commissioner for Mulanje, Jack Nguluwe explained that the temporary suspension of activities was decided by the company who wish to resolve the matter through negotiations and he provided an update on the meeting,
The meeting went well though we did not resolve the matter immediately. Officials of the two companies [MMCT and Spring Stone] asked to be given time to consult on some of the issues raised. I believe it is a good start to resolving the issue amicably. What is clear is that the people are not against the exploration of the minerals, but somehow it looks like what they were briefed when the project was starting is not exactly what is being done and the people are not comfortable
Negotiations were not successful it seems, because on Friday 7 December 2012, a group of politicians and traditional leaders received a court injunction to stop the exploration activities, according to The Daily Times. The group has until 28 December 2012 to file for a permanent injunction.
They include Member of Parliament (MP) for Mulanje Pasani Peter Nowa, former parliamentarian and ruling Peoples Party official Brown Mpinganjira, renowned comedian Bon Kalindo and Traditional Authority Mkanda, among others.
The order, which was granted without the other party being represented, among other things, restrains Springstone and the Trust, their agents or employees from carrying out their activities on Mulanje Mountain.
The Trust is an environmental endowment organisation, which facilitates the raising of people’s awareness, involvement and understanding of the importance of the conservation and responsible management of the biodiversity and natural resources in Mulanje Mountain Forest Reserve.
Springstone Limited, on the other hand, was given a licence for the exploration of rare earths on the mountain.
In an interview, comedian Kalindo said the group has taken the matter to the courts to show seriousness and determination in their cause to protect the mountain from further exploitation.
“We want to show that we are serious on this matter. We have come to realise that the other parties are taking this matter lightly. For example during our meetings with Springstone and Trust officials on this issue, it was agreed that they stop their activities, but we have discovered that the Trust did not comply. They are still carrying out their activities.
“The most disturbing thing is that these people are now conducting counter meetings with the people, trying to buy them out so that they revolt against us,” said Kalindo yesterday.
Gold Canyon Resources, Spring Stone and MMCT have not yet released statements on the court injunction. We will continue to follow the story as it unfolds and is reported.
Editor’s notes: if you have any information or wish to present an alternative side to the story that has not currently been covered in the press, we will consider publishing it here.
Spring Stone Limited is the official name of the company, but it is frequently called “Springstone” in the Malawian press, this has not been corrected in the quotations from online publications where this mistake has been made.