2017 International Mining Indaba
Malawi dangles mineral wealth
By Marcel Chimwala
The Malawi pavilion at this year’s international mining indaba in Cape Town, South Africa was a centre of attraction for investors who are interested to know what Malawi, whose mineral sector largely remains unexploited, has on offer.
A delegation from the Ministry of Natural Resources, Energy and Mining led by Director of Geological Survey Department, Jalf Salima, showcased the country’s mineral wealth to the international investors using maps and information obtained through different exploration projects.
Malawi hosts deposits of rare earth elements, uranium, niobium, heavy mineral sands, bauxite, graphite, coal, limestone, dimension stones, iron sulphide, vermiculite, nickel gold, platinum group metals, copper and has prospects for the discovery of oil and gas.
The country is also mining gemstones such as rubies and sapphires which can out-price diamonds on the market when well processed.
Malawi’s geophysical data capture investor interest
By Marcel Chimwala
Since attaining independence from the British colonialists in 1964, Malawi has all along been called an agricultural country with politicians repeatedly stressing to the masses that the country has no minerals.
But the trend is changing now as the mining sector seems destined to start substantially contributing to the country’s economy, all thanks to the World Bank and European Union financed Mining Governance and Growth Support Project through which a countrywide high resolution airborne survey dubbed Kauniuni has produced data that shall be used for exploration to unearth the true mineral potential of Malawi.
The glowing image of Malawi as a potential investment destination for global mining investors was vivid at this year’s Mining Indaba held in Cape Town, South Africa from February 6 to 9 where the Ministry of Natural Resources, Energy and Mining with the financial backing of MGGSP showcased the newly acquired kauniuni data.
Many global investors who thronged the Indaba were specifically interested in the high resolution airborne radiometric, gravity and magnetic data acquired through the countrywide high resolution airborne geophysical survey. The data which is currently being interpreted has increased the mineral prospectivity of Malawi. The preliminary interpretation indicate potential areas for further ground follow up mineral exploration work to establish the type, quality and quantity of the mineral resources,
says Malawi’s Director of Geological Survey Department, Jalf salima, who led the country’s delegation which included Deputy Coordinator for MGGSP James Namalima and Chief Mining Engineer at the Department of Mines, George Maneya.
The data that Malawi showcased at the Indaba indicate that Malawi is a green field endowed with several known mineral resources and occurrences including uranium, niobium, heavy mineral sands, bauxite, graphite, rare earth elements, coal, limestone, dimension stones, iron sulphide, vermiculite, nickel, platinum group metals, gold, copper and gemstones such as rubies and sapphire.
There is also potential for oil and gas in Lake Malawi and areas along the rift valley.
Salima says his team also informed the visitors to the Malawi pavilion at the Indaba that the government is in the process of establishing an electronic Geodata Management and Information System (GDMIS) at the Geological Survey Department, which will improve the archiving, accessing and updating of geoscientific data.
All the old analogue data is being digitized. GDMIS is being designed by GAF AG of Germany and is expected to roll out by April 2017. The work is being implemented with funding from World Bank and European Union under MGGSP.
Malawi is also in the process of interpreting the high resolution data obtained from the Country wide Airborne Geophysical Survey which was launched by Minister of Natural Resources, Energy and Mining, Bright Msaka, in August 2015.
Through MGGSP, the Ministry of Natural Resources, Energy and Mining engaged Geological Survey of Finland (GTK) and Geological Survey of France (BRGM) as technical partners to interpret the high resolution data.
Salima reports that government is also implementing the Geological Mapping and Mineral Assessment Project (GEMMAP) which is aimed at producing up to date geological, structural, metallogenic, geohazard and mineral occurrence maps with financial assistance from the French Government.
The data shall help the country to know its mineral potential and help investors in selecting exploration targets hence reducing speculations,
Meanwhile, the Malawi Geological Survey Department has archived large volumes of data dating back to the colonial period and is in the following categories:
- Geological maps covering the whole country at scales 1:1,000,000; 1:250,000; 1:100,000. With accompanying bulletins;
- Low resolution air borne geophysical data (Radiometric, Magnetic and Gravity data) covering the whole country at scales of 1:1,000,000; 1:250,000, 1:100,000 and 1:50,000;
- High resolution airborne geophysical data (Radiometric, Magnetic and Gravity) covering the whole country;
- High resolution airborne geophysical maps (Radiometric, Magnetic and Gravity) covering the whole country at scales of 1:1,000,000; 1:250,000 and 1:100,000;
- Published and unpublished technical reports from geologists;
- Exploration reports from private companies;
- Seismology data;
- Geochemical data.
But it is not only the availability of captivating data that sways investors to choose where to risk their capital. Good legislative and fiscal environment are crucial too. Therefore, the Malawi delegation at the indaba briefed the inquisitive investors about the reforms that the Malawi government is implementing in order to create a conducive environment for mining investors.
Salima says as part of the reforms, the Malawi Government launched the first ever Mines and Minerals Policy in 2013.
The Policy highlights the importance of mining to the future growth of the economy. It also outlines the importance of private sector in developing the mining industry,
The Malawi government is also reviewing the Mines and Minerals Act of 1981 to align it with international best practices and ensure that the government, investors and communities benefit from mining.
Major highlights include a total duration of 11 years for an exploration licence, the introduction of Retention Licence which is granted for a period not exceeding five years, requirements for companies to have community development plans and local content components to ensure that citizens benefit from mining activities and improving relationship between the mining company and communities.
The Bill is expected to be tabled in parliament this year.
The country has also revised the mining fiscal regime and with the new arrangement, payment of royalties shall be handled by the Malawi Revenue Authority (MRA).
Royalty is pegged at 5 % and 10% for rough gemstones, and there is also 30% corporate tax but an exemption from import duty is applied on all capital goods and vehicles for exploration and mining.
Salima reports that the Malawi delegation also enlightened investors at the Indaba that with the support of the World Bank and European Union through the MGGSP, a modern electronic Mineral Rights Management System (MRMS) is being installed at the Department of Mines in Lilongwe.
This will allow online application of licences hence facilitate efficiency and transparency in the application, granting and management of mineral tenements. The work is being done by Canada-based consultanting firm, Spatial Dimension. MRMS is expected to go live by March 2017 and the prototype can be accessed on http://portals.flexicadastre.com/ malawi/,
The reforms taking shape in Malawi’s mining sector has not spared the artisanal and small scale mining sector. Salima reports that Government is at an advanced stage of developing an Artisanal and Small-Scale Mining Policy, which is aimed at adequately administering, regulating and facilitating the growth of ASM Sub-Sector in Malawi.
The policy, furthermore, encourages co-existence of both ASM and large scale mining.
The Malawi delegation also informed investors at the Indaba that the Extractive Industries Transparency Initiative (EITI) board designated Malawi as an EITI candidate country on October 22, 2015 after the country submitted an application in July 2015 following a public commitment to join EITI made by His Excellency the State President, Professor Arthur Peter Mutharika in June 2014.
Malawi has joined the initiative with a strategic goal of ensuring that extractive industries contribute to national development through revenue transparency and accountability and currently the country is compiling the first EITI report to be ready by April 2017.
Malawi has also drafted a Malawi Country Mining Vision (MCMV), which is the domestication of the African Mining Vision (AMV) being championed by the African Union.
As outlined in the AMV, the MCMV seeks to foster a transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development,
Decent infrastructure is also a key factor in the development of the minerals sector. Salima says his delegation assured visitors to the Malawi booth at the Indaba that the country has better road infrastructure linking various parts of the country.
It is also linked by a railway to the port of Nacala, which has just been upgraded by Brazilian resources giant Vale to transport coal from Tete, and by road to ports of Dar es Salaam, Beira, Durban and Walvis Bay.
We assured the investors that though land locked, the country is properly land linked by rail and road,
On the energy front, the Malawi crew told the investors that the country is undertaking several projects to increase its energy generation capacity, and key is the 360 MW Kamwamba coal fired power plant being funded by the Government of the Peoples Republic of China.
The country also amended its Energy Act to encourage Independent Power Producers to venture into the sector previously dominated by Government owned ESCOM.
Currently, there are only few modern mines in Malawi which include the Kayerekera Uranium Mine operated by Paladin Africa Ltd, now on care and maintenance, Shayona Cement Company limestone mines in Kasungu and several coal mining operations including Mchenga, Kaziwiziwi and Nkhachira.
There are also several exploration projects at various stages including; The Kanyika Niobium Project owned by Globe Metals & Mining of Australia, which is negotiating a mining development agreement with government. Globe Metals is also exploring for graphite at Chimutu and Chidziro prospects in Lilongwe.
The potential exploration projects also include Songwe Hill Rare Earths Project in Phalombe owned by UK firm Mkango Resources, which has embarked on a definitive feasibility study.
Sovereign Metals of Australia is exploring for Graphite at Duwi in Lilongwe, and has just released results of a scoping study indicating the project as the sixth largest flake graphite deposit in the World.
Four companies have licences to explore for Oil and Gas in Lake Malawi and the rest of the Rift Valley stretch and these are Hamra Oil, Sacoil Holdings of South Africa, Pacific Oil Limited and RAKGAS MB45 Limited.
The article above was initially published in Malawi’s Mining & Trade Review Issue Number 47 (March 2017).
The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.