President Chakwera has got it right on mining
On 14 July 2014 I wrote an article in The Nation newspaper under the headline ‘Do better on mining’ in which I urged government to establish a parastatal to actively participate in mining sector and not just watch foreign companies extracting minerals. Seven years down the line the government has done what it should have done many years ago. Actually Malawi used to have Mining Investment and Development Corporation (MIDCOR) which was vanished during the Structural Adjustment Programme. It should be revived!
President Dr Chakwera should be applauded for making an important decision for government to be in firm control of the mineral wealth by directing that a governing company mining must be formed to look after the mineral issues. This is what some of us have craved for many years. Those of us who have lived in countries where they have minerals know how the mining sector drives the economy and contributes significantly to the Gross Domestic Product (GDP). Countries like Botswana, South Africa and Zambia are where they are today because of the mining.
One cannot understand how a country so rich in minerals can leave everything to foreign companies, many of whom are crooks, to be mining the minerals while government watches. Some companies have been sending huge tonnes of minerals in the name of samples for many years. Yet they have been selling minerals illegally. Who is monitoring them? Are they not given limits of the sample tonnage to export? Others have been extracting the minerals illegally outright. Obviously they have been conniving with local crooks: corrupt government officials, individuals and politicians to exports minerals illegally.
If previous leaders had been serious with mining Malawi would have been one of the riches countries on the African continent because the country is endowed with a lot of precious minerals. Some minerals such as gold and diamond are on high demand on the international market. They could also be processed locally to manufacture a wide range of products such as fertilizer, glass, television sets, jewellery, energy etc for local consumption and also for export to boost foreign exchange earnings. Malawi can soon forget about foreign aid like Botswana because the mines will be generating enough domestic revenue to meet budgetary requirements.
Thus Malawi has a wide range of mineral wealth. If the mining sector can be properly developed the economy can diversify and boost other sectors like agriculture and tourism. Fortunately, all the regions have minerals. The potential for large scale mining across the country will create mass employment. And Malawians can stop trekking to South Africa to scout for employment.
Government should ensure that the State-Owned Company owns 51% stake in all major mining ventures. This will ensure that the country has a fair share of investment. Steps should also be taken to ensure that all companies prospecting for minerals are given limits of the samples to export. Mining contracts should be made available to the citizens for the sake of transparency and accountability so that they know what is in the agreement. Luckily enough, the Access to Information Act empowers citizens to access documents and any other information held by the state and companies that do business with government.
Since mining companies promise a lot, but do very little to improve the lives of the community in which they operate, the community should have a stake in the mine [so that a percentage is reserve for them] to develop their own communities and reduce poverty. It will be sad to see people still live in abject poverty in the face of thriving mining activities in regions and districts. This is the opportune time to focus on mining to complement the under-performing agriculture which has been the major contributor of foreign exchange.
Source: compiled by the author. Note the list is not exhaustive
Mzimba Boma, Mzimba
|Rare earth minerals||Kangankunde Hill in Machinga|
|Iron ore||Mtendere, Dedza|
|Heavy minerals||Tengani in Nsanje district
Linthipe River near Salima on shores of Lake Malawi around Monkey Bay.
Lake Chilwa in Zomba.
Chilwa Island, Zomba
|Coal||Mchenga and Livingstonia, Rumphi, Vwaza, Mzimba, Nthalire, Chitipa, Ngana, Karonga, Lengwe, Lower shire|
|Pyrite and pyrrhotite||Malingunde, Lilongwe. Chisepo, Dowa.|
|Titanium sands||Nsanje, Salima|
|Limestone||Nsanje, Blantyre, Zomba, Mwanza, Ntcheu, Machinga, Kasungu and Karonga|
|Gemstones (e.g. Rubies and sapphires, Emeralds, sunstone etc)||Chitipa, Karonga, Nkhata-bay-Bay, Mzimba, Kasungu, Mchinji, Ntcheu, Balaka (Machinga),
Mwanza, Shire Highlands, Zomba, Chikwawa and Nsanje.
|Gypsum||Mponela, Dowa, Nambuma,Lilongwe, Linthipe, Dedza|
|Glass sands||Lake Chiuta, Mangochi, Lake Chilwa, Zomba, Mchinji|
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All these years I have been wondering why Malawi, a country surrounded by countries very rich in minerals, should not itself be blessed with the stuff. Improbably odd, I thought.
you have no idea. How are international investors going to get any return on their investment if you think the govt has a 51% stake – the company pays taxes and royalties and 0.45% community agreement plus other community funding agreements. Nowhere in the world would this happen – you want 51% and yet your country has no infrastructure – expertise – manufacturing of specialized processing equipment – skilled workforce such as other countries. Mining companies invest only where profitable and stable governments and regulations – something I am sure you would agree Malawi lacks all the fore mentioned.