Malawi ‘losing $700million worth of gold to smugglers’ – as government scrambles to crack down on illegal mining trade

Malawi’s government is putting fresh measures in place to clean up the country’s mining sector, after it emerged the nation could be losing hundreds of millions of dollars’ worth of gold to smugglers every year.

Minister of Mining Thoko Tembo said the Malawi Mining Investment Company (Mamico) was establishing mining cooperatives and formal structures for buying gold, in a bid to bring order to an industry long plagued by illicit trading.

Tembo said the initiative would ensure gold produced in the country is sold exclusively through government-established structures – a move designed to slash smuggling and guarantee that both the state and local communities finally see a return from the country’s mineral wealth.

Speaking in Kasungu on Thursday, where he toured gold mining sites at Chimbiya, the minister said the government would set up buying points closer to mining communities, making it far easier for miners to sell their gold through legitimate, formal channels rather than the black market.

The scale of the problem was laid bare by Mamico Chief Executive Officer Professor Leonard Kalindekafe, who revealed that Malawi is losing up to a staggering US$700 million worth of gold through smuggling.

Professor Kalindekafe said the eye-watering figure underscored the urgent need for stronger government structures to ensure gold mined in the country is formally traded, rather than disappearing across the border into the hands of illegal buyers.