Wrangle over Chitipa mineral licence

By Marcel Chimwala

Controversy has ensued over government’s handling of mineral tenements for sodalite and granite in Kameme area in Chitipa district with a local company J&Y Gemstone Centre and Mining complaining that it is being wrongly accused of encroaching in the licence area of another miner, Ilomba Granite.

J&Y is also claiming that the government is unfairly rejecting its application for an exclusive prospecting licence (EPL) for a tenement which does not form part of Ilomba’s granite licence “but is only within the vicinity.”

Investigations by Mining & Trade Review indicate that the government under the then Bakili Muluzi administration granted the mining licence (ML0019) for granite to Ilomba on June 28, 1995 with an expiry date of June 27, 2020.

However, after noticing that the licensee was not developing the tenement as per government requirements, the Ministry of Mining under the previous Joyce Banda administration revoked the mining licence and gave a go-ahead to two other interested firms, J&Y and a Chinese company to apply for EPLs in the tenement area.

J&Y paid the licence fees and its application appeared in the cadastre as APL 0005. Therefore, the company started developing the tenement while convinced by government officials that it will be issued with an EPL.

However, after receiving advice from the Ministry of Justice, the Ministry of Natural Resources, Energy and Mining under the current Peter Mutharika administration has rescinded the decision to revoke the Ilomba mining licence and issue an EPL to J&Y until all legal procedures are followed.

Consequently, the application (APL 0005) which appeared in the cadastre after J&Y paid the licence fees has now disappeared following its rejection by government.

We were advised by the Ministry of Justice that they have to be 30 days notice before we revoke the licence and give out the tenement to new applicants. Ilomba is serving this notice,

says an official from the Ministry who asked for his identity not to be revealed.

The official says J&Y still has a chance to get a licence after the government fulfills legal requirements and successfully revokes the Ilomba mining licence.

However, J& Y maintains that it is being unfairly treated by the Ministry

which has rejected the application for the licence after it initially gave them a go-ahead to start developing the tenement.

It is unfair that the government is rejecting our application for the licence after we have spent a lot of money on exploration,

says a Director for J&Y, Yamikani Jimusole.

He explains that he is surprised that the Department has decided not to grant them the licence when their exploration area is not covered by Ilomba’s mining licence.

However, the government maintains that J&Y’s licence application area is covered by the mineral licence granted to Ilomba.

Reads a letter from Director for Mines Atileni Wona to the company copied to Secretary for Mines dated August 23, 2017:

Following your application for EPL for sodalite in Chitipa District, the Department regrets to notify you that your application has been refused. The application area for the EPL significantly falls within an area already licenced under a mining licence ML0019 belonging to Ilomba Granite Company Limited.

You may appeal against this decision as soon as possible but not later than 30 days from the date of this letter.

Sources say the government has made the decision to maintain Ilomba’s licence in response to an injunction that the company obtained restraining J&Y or any other person from operating in the area.

Ilomba Granite obtained the injunction on July 28, 2017 at the High Court in Lilongwe and the case is recorded as Civil Cause Number 632 of 2017; Ilomba Granite against James Tembo and J&Y Mining Company.

Another Director for J&Y, James Phiri, tells Mining & Trade Review that he was arrested and questioned at the site when he was conducting some surveys.

I am equally surprised because as it appeared on the cadastre, our licence area is just different from that of Ilomba,

he says.

J & Y has, meanwhile, appealed against the government decision to reject their application on the basis that they followed all procedures to acquire the tenement which had been idle for more than a decade.

The Department of Geological Survey did the technical report and demarcation upon verifying that the place was vacant, we further came to your office, and you together with your officer, confirmed after checking on the cadastral system that the place was vacant, you assured us that we might get the mine since it has been un-operational for a long time,

writes Phiri in his appeal letter to the Commissioner/ Director for Mines.

He says as a Malawian company, they are concerned with how the issue has been handled since they planned to construct a factory to process the stones.

Under the laws currently in use, Mines and Minerals Act (1981), prospectors can pursue different minerals in the same area but the law currently being formulated says licences do not have to overlap.

Wrangles over mineral tenements are not strange in Malawi’s mineral sector as the country is also failing to develop, the Kangankunde Rare Earth Deposit in Balaka because of legal wrangling as a South African firm, Rift Valley Resources, successfully sued the Malawi Government for failing to renew its licence during the Muluzi administration.

The government that time granted the Kangankunde licence to a local investor, Rare Earths Company, but Rift Valley Resources obtained an injunction restraining Rare Earths from developing the deposit, which is believed to be one of the world’s largest.

While the issue was still with the courts, the government under the Bingu Wa Mutharika administration gave a go-ahead to Rare Earths Company to sell the tenement to Australia’s Lynas Corporation for US$4-million but the company has since failed to develop the mine due to legal implications.

The government, under the Joyce Banda administration, also allegedly tried in vain to revoke Kayelekera EPLs from Australia’s Paladin Africa to grant them to a consortium of local investors.

Granite is an intrusive igneous rock that has many uses in building construction and architectural design while sodalite is a blue mineral widely used as ornamental gemstone.

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This piece was initially published in Malawi’s Mining & Trade Review Issue Number 53 (September 2017).

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