Malawi caught in billion dollar minerals scandal
Malawi’s minerals continue to attract attention especially from Australian firms, but this time Lynas Corp seems to have lost an ownership contest of Kangankunde mines in Ntcheu following a High Court ruling.
Lynas Corp says the area has mineral deposits worth billions of US dollars and they have blamed Malawi government officials for mishandling the matter.
The court has ordered that rights to the rich rare earths deposit at Kangankunde be returned to Michael Saner, a South African geologist who controlled the exploration licence in 2003.
A news report from an Australian papers says the dispute threatens to turn into a full-blown political and constitutional crisis as Ministry of Mines is in contempt of the High Court as they maneuvered desperately to attract foreign investment and demonstrate stability and the rule of law.
Michael Smith, an associate of Saner said legal proceedings were continuing to uphold the orders from the High Court.
“The Commissioner of Mines acted against the law of the country in not renewing the licence in 2003. The rights were awarded to Mr Patel (a middle-man) contrary to the law, and the court has ruled on this,” Smith said.
Saner’s claim before the High Court of Blantyre on January 2010 states damages of US$100 million plus sunk costs, legal costs and interest.
According to Lynas the mines hold a limitless business potential with their rare deposits and was ready to bag more points of success in its records.
On the other hand Lynas shareholders are counting on the blue sky from these African assets to fuel further gains in the stock price.
Lynas told the Australian Securities Exchange that that it had “recently received correspondence on behalf of a party claiming that, in 2003, the government of Malawi acted incorrectly in now reviewing that party’s exploration licence over the area of the KGK tenements”.
The company said it was “not party to any proceedings concerning this matter” and pledged to keep the market informed.
Lynas had been informed for some time of the gravity of the claims over KGK. The market should arguably have been informed much earlier.
The geologist Michael Saner claims he has lost time and money and continues to incur costs.
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