Malawi Government still negotiating the Kayerekera successor arrangement with Lotus Resources

Principal Secretary (PS) in the Ministry of Mining, Martin Phiri, has disclosed that the Malawi Government is still negotiating a Mining Development Agreement (MDA) with Lotus Resources to ensure that the country does not repeat the Kayerekera saga.

Phiri made the remarks in Karonga during the 2023 Karonga District Alternative Mining Indaba held at Karonga Boma on Tuesday.

Phiri addressing participants

NCA-DCA Malawi Country Joint Programme organized the indaba in conjunction with the Catholic Commission for Justice and Peace (CCJP) to enable stakeholders to discuss and identify lasting solutions to social and economic issues facing the extractive industry.

Phiri assured that his ministry will ensure that there are ample consultations across all stakeholders.

“To this end, we are now comfortable with a progressive tax regime that is being used as we negotiate with Lotus Resources in order to realise maximum benefits for the betterment of Malawians. We do not want another incident that leads Malawians to wonder what happened to the promise of more than a decent reward for our natural resources. We do not want a repeat of the ‘what happened’ question that was on everyone’s lips following 10 years of uranium mining here in this district and little, if anything, to show for it at local and national levels. We would like to ensure that the things we are struggling with now, like lack of foreign exchange, are eased as a result of such ventures,” said Phiri.

Banda-Matsimbe–Mineral resources must be used to build and increase social cohesion and not deepening inequality–Photo by Watipaso Mzungu

The newly revised Mines and Minerals Act, which was recently passed and assented to by President Dr. Lazarus McCarthy Chakwera, provides for 0.45 percemt from gross revenue for use by the community under the Community Development Agreement.

Under this arrangement, the community has to indicate what they want to use the money for.

Phiri said he expects the communities take steps to ensure they benefit from such an arrangement.

“I am sure you will appreciate the need for such an approach and we hope that in coming up with such projects, due regard will be paid to matters of inclusion and due process followed in identifying areas of most need and maximum impact. Obviously, these issues cannot be resolved or agreed to overnight. They involve painstaking and slow, sometimes protracted negotiations. government has done all it can to assemble a comprehensive team of financial experts, tax gurus, people well versed in mining operations and resource estimates, international mineral pricing, and everyone else we need,” he said.

Speaking earlier, NCA-DCA Communications Manager Wezi Banda-Matsimbe observed that Malawians are not benefitting enough from the extractive industry.

She warned that misunderstandings and conflicts would continue characterizing the extractive industry unless the Government of Malawi addresses governance systems that perpetrate social inequalities in the sector.

“This has created a wide gap between the haves and have-nots. Transnational corporations have extracted and exploited natural resources across the country, leaving only massive degradation and poisoned water resources for the local communities,” narrated Banda-Matsimbe.

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