Malawi govt to probe unreconciled K810mil mining revenue – Minister

Newly appointed Minister of Natural Resources,  Energy and Minning, Aggrey Massi has said government will investigate the missing of about 43 percent of the total revenue Malawi government generated from the  mining sector  in 2014 amounting to K810 million.

The money cannot be reconciled in accounting books, according to the country’s first Extractive Industry Transparency Initiative (EITI) report launched in Lilongwe.

The report says K499 100 509 from the Department of Mines revenue and K1 754 146 1 900 from Malawi Revenue Authority (MRA) has not been reconciled from a total of K6 billion government declared.

“I am hearing about the figure for the first time,” Massi told reporters in Lilongwe after launching the report documents.

“I will try to figure out what happened. We will ensure there is accountability and transparency,” he added.

Germany Deputy Ambassador Thomas Staiger  said  “where there is poor governance, these [mining] resources can also become the cause for corruption, environmental polution or social conflict and the poor are not benefiting from the revenue generated.”

He welcomed the report, saying it will enhance transparency and accountability in the extractive sector.

Malawi Chamber of Commerce and Industry (MCCI) also welcomed calls for increased transparency among companies operating in the mining sector and build win-win partnerships between mining investors and communities around their investments.

Massi said  government will soon table in Parliament its 1981 Mines and Minerals Act.

In the draft, it is being proposed that the Department of Mines will be responsible for the collection of ground fees, but the royalty from the mining sector will be collected by the MRA and has also taken on board the concept of transparency in fiscal regime issues to align Malawi’s candidature to the EITI.

Taking it from the bill, proposed Mines and Minerals draft bill has been designed to regulate the development of mineral resources of Malawi through adherence to sustainable development principles.

The bill states: “The entire property in minerals, in, under or upon any land or waters in Malawi are vested in the Republic; but without prejudice to the exercise of any right under or pursuant to this Act”.

This is in contrast with the 1981 Mines and Minerals Act, which states: “The entire property in, and control over, minerals in land in Malawi are vested in the President on behalf of the people of Malawi; but without prejudice to the exercise of any right under or pursuant to this Act.”

The draft bill is making a proposal for the establishment of the Mineral Resources Committee. The committee’s major function will be to examine qualifications, experience and character of persons applying for exploration licences, retention licences, medium-scale mining licences and large-scale mining licences and determine their eligibility to be granted the type of licence applied for.

Apart from recommending granting of exploration licences, retention licences, medium-scale mining licences and large-scale mining licences, the committee will advise the Minister on licensing matters relating to exploration and mining operations, including quarries and their operations.

However, the committee will not be involved in any negotiation of mining agreements if there will be any.

The draft also proposes that the Minister “shall not grant an exploration licence, retention licence, medium-scale mining licence or large-scale mining licence unless the Mineral Resources Committee has recommended the respective application, and any grant of a licence that contravenes this subsection is null and void.”

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