Malawi mineral-gate scandal: K69.5bn awarded to South African geologist – paper ‘buries’ story

Malawi’s daily newspaper was criticised of “burying” a  billion dollar mine scandal on page four instead of lead headline about the order of High Court awarding  Rift Valley Resources, owned by South African geologist Michael Saner,$100 million (about K69.5 billion) as compensation for the deliberate acts of the Ministry of Natural Resources and Environmental Affairs in denying him the renewal of his Exclusive Prospecting Licence (EPL).

Kachaje:  One of the examples of how we allow ourselves to remain a poor country

Kachaje: One of the examples of how we allow ourselves to remain a poor country

Former editor-in-chief of media giant Times Group, Charles Simango took to Facebook to note that the article The Nation carried on page four deserved to be a lead story.

“Court awards SA geologist K69.5bn,” headlined the newspaper story which Simango cited.

The paper reported that in his March 15 2016 judgement, High Court Judge Rowland Mbvundula said  the decision was arrived at considering that any difficulties the process of assessing damages suffered were created entirely by the ministry (now known as the Ministry of Natural Resources, Energy and Mining) in that it has prevented feasibility studies from being undertaken.

“You are looking at probably the biggest story since cashgate,” noted Simango.

“ The story is not about the amount rather it is how we are all going to end up paying all that money because some not -so-junior civil servant, renewed an EPL for someone who did not have one in the first place. What we want to know as readers, therefore, is: who signed the fake renewed EPL? And who issued the instructions for the renewal of a non-existent EPL? That is the story we want to hear,” Simango pointed out.

Social activist Ben Chiza Mkandawire pointed out that ‘mineral-gate’ story was first published in the Mining Review which  reported that poor decision making by the government is  proving costly to the nation and the investor for the Kangankunde Rare Earth Mining Project in Balaka as the investor, Australia’s Lynas Corporation, is failing to develop the resource it purchased for US$4-million (about K2.5-billion) due to legal complications.

It reported that 2000 when the ministry granted Saner the EPL for Kangankude Mine, which is valued at over US$1-billion and at that time the tenement was held by a local consortium, Rare Earths Company.

However, a previous tenement holder, South Africa’s Rift Valley Resources, sued the Malawi Government and obtained an injunction against the development of the mine on the grounds that government erred by not renewing its exclusive prospecting licence for the Kangankunde resource, whose rights at that time were with Rare Earth Company.

Seemingly for fear that it will lose the mineral rights, Rare Earths Company sold the resource to Lynas Corporation at US$4-million in 2007 and surprisingly government allowed the deal to go through despite the prevailing court case, reported Mining Review.

Lynas says the purchase agreement contained a number of conditions precedent that were satisfied before completion, including approval by the Malawi Department of Mines for the transfer of the Kangankunde tenement to Lynas, approval by the Malawi Investment Promotion Agency for the Lynas project proposal and approval by the Malawi exchange control authorities for Lynas to make payment as a foreign investor.

The local daily said court judgement said the level of damages was “ improper”  when the ministry kept the applicant [Saner] away from his mining area.

“This court is satisfied that the applicant’s submissions encompass the correct exposition of the legal principles applicable to the case,” reads part of the ruling to a judicial review of the ministry’s decision to refuse renewing Saner’s EPL.

Economics Association of Malawi (Ecama) president Henry Kachaje,  commenting on the story said  K69.5 billion compensation  is going to be a “serious drain” on Malawi budget.

He wrote: “ K69bn ($100m) awarded is about three  times the amount which was cashgated in 2013. Here the court has awarded three times the amount we lost in cashgate to just one South African geologist.”

According to Kachaje, K69.5 billion is almost equal to the amount Malawi  spend on Farm Input Subsidy Program ( FISP).

“ Imagine awarding the whole FISP budget that targets 1.5m rural farmers to one individual as compensation,” wrote Kachaje.

He also observed that the amount can build at least 40 new secondary schools, almost two per large district. Or 5,000 classroom blocks. Or over 500 girls hostels. Or educate at least 6 million primary school children for a year based on UNESCO minimum rate of $15/child.

“Good people, fellow patriotic citizens, this is but just one of the examples of how we allow ourselves to remain a poor country, in this case, just because of actions of a few civil servants who  neglected to do their job.”

Kachaje also concurred with Simango that the ‘mineral-gate’ scandal did not even make it to the front page of the newspaper.

“And it might die quietly while for years, a big hole created in our budget will keep some millions trapped in poverty.”

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24 thoughts on “Malawi mineral-gate scandal: K69.5bn awarded to South African geologist – paper ‘buries’ story”

  1. advisory committee says:

    The judge has erred big time. He is inconsiderate he didn’t understand the financial implications koma abale in k69.5 billion munthu mmodzi zoona ? Our wise and dynamic attorney general kaphale should do an appeal against this strange thoughtless judgement

  2. James Supuni says:

    These are the effects of quota systems. You have too many incapable people in Civil Service. The adage of gabbage in gabbage out holds true to the effects of quota system which is compounded by promotion practices in civil service where people are promoted on tribal and regional basis.

  3. Gold Ruyondo says:

    but do africans have brains in their heads?and then we blame the west.this is a great shame ,and for our media no wonder that is what they are known for

  4. Khima says:

    Koma mwati tsiku lina boma la Malawi sazalilanda ma sherrief???

  5. Mbunga says:

    I’m compelled to presume that the editor of the paper was also palm oiled to hide the article deep inside the newspaper

  6. dobs says:

    I ALSO HAVE THE INFORMATION THAT SOME TOP OFFICIALS IN DPP ARE BUYING LAND WHERE MINERAL DEPOSITS ARE BELIEVED TO BE FOUND SO THAT THEY CAN BE COMPENSATED WHEN THEY ARE TOLD TO MOVE TO PAVE WAY FOR THE MINING.

    ANTHU MUKUDZIWA ZIMENEZI???? THIS COUNTRY????

  7. kibutz says:

    APPEAL please

  8. chibweya joe says:

    For your info you may ask former minister of mining. He knows the truth. No public servant was reckless with laws and regulations governing the sector. It was purely politics as usual. I feel sorry for Mother Malawi.

  9. Thinking Aloud says:

    Judgeyonso timuunike bwinobwino pankhaniyi. Retirement yake ili mkatimo. Reminds me of the other judge who awarded Mulli millions. Paja malemu ndani?

  10. Gerald mapanga Phiri says:

    That is exactly what takes when greedy people join politics and pirated high government positions. It becomes a failed nation. Those people no longer there but generations suffer. That is just a tip of iceberg

  11. Amangwetu says:

    Can someone advise if the people involved in this were brought to book. Most times issues like these dont just take place without one getting palm oiled. Do we have Investigative journalists who can get down to the bottom of this story? K69.5 billion is just alot of money amangwetu. There are alot more loopholes in the civil service that can allow these thugs to scam us. Who is checking and auditing that?

    But as usual, the ever patriotic Malawians will remain silent on this and the ngodya zinayi syndrome is still haunting us. We wait for azungu to start voicing out their discontent then nde timayamba kulila… Dzuka Malawi, time is now. Demand answers and dont be afraid.

  12. Duncan Chioko says:

    This happened in 2000!!!!!!!!!!!! How long does it take to get these things sorted out by the government and our courts? No wonder everyone is up in arms 16 years down the line. The problem wiith our nation, our government and courts are that issues take years to sort out and then we end up with this kind of mess. Shame on all of you!!!!!!!!!

  13. Alomwe Alomwe says:

    Corrupt judge and currupt officials

  14. Hokoyo says:

    Why should the South African company sue the govt for not renewing the licence? Govt has the right to refuse.
    You can’t force the govt

  15. Kamwela says:

    The govt should appeal the case. All is not lost. How did the judge arrive at the amount? Sometimes the way these judges award compensation is very questionable. It is like they want to benefit as well.
    Let the Attorney General appeal the case. If anything govt should just ignore the judgement.

  16. Too mucb money says:

    Its not only government to blame but also a mediocre judge. Ma judge a jack up ndipo oiwerenga ngati achina Justice Madise, Chikopa etc would not have rewarded such a crazy amount.

  17. Judges be sober says:

    Judges must also be financially literate. Such a compesation amount is unthikable. Government is wrong sure but awarding 20% of Malawis annual budget to an individual is craziness of the highest order. What motivated the learned judge to penalise a government struggling to make ends meet.

  18. Choyamba says:

    This compensation bis makeup. Of course genuinely decided upon based on circumstances…but then somebody will caashbon it. That’s how things are done when corrupt minds are in leadership. We need to redefine our Reformation strategy. Otherwise we are not making progress at all…

  19. Chikopa says:

    Kodi nanga tikayika nkhani ya MACRA at COMESA Court ndiye Malawi itsala ndi chani? How do judges come up with these useless rulings. There must be a cap on compensation. Was renewal of license a right for geologist or for Government of Malawi?

  20. Chambe says:

    The first EPL was issued in the year 2000 by UDF government. We hear that the licence being a contract was valid for 3 years subject to renewal. What we don’t hear is if there was an exist clause on the contract and whether the renewal clause gave exclusive rights to the current holder. We need to hear more on this since this issue is now for public consumption.
    Reading on The Nation paper, one can see corrupt minds of those who handled this matter. One wonders how a licence was renewed to Tom Patel who never had one before. It is also mind boggling to think that another well experienced company from Australia bought the mining rights ( in DPP government) from the very Tom Patel without studying the process of how the licence was handled. Those involved should be investigated and can not hide behind the Ministry as an error maker.

  21. ineyo says:

    Educated savages full of selfish hearts! The whole nation or civil service could not see this coming? are we serious as a country? I strongly doubt vuto lomangodzikonda even when u don’t know anything.?

    Bravo Simango for alerting the nation otherwise hurrying of the story by the paper was a deliberate move to mask what is going on elsewhere.

  22. i want a tractor says:

    theres nothing to be surprised about here. i think by now we all know that malawians are stupid by nature. you can’t squeeze blood from a rock so stop trying. you had uranium once didn’t you? where is it?

  23. Toad says:

    Koma pamenepo

  24. Kenkkk says:

    Sad, pathetic, it is stupidity beyond stupidity.

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