Malawi government expects Mwalawanga Mining Limited who were awarded the contract for Chimwadzulu Corundum Mining licence —home to Nyala rubies, one of the most precious stones — to fully roll out its operations by December 1 2018.
Government awarded the contract to Mwalawanga Mining Limited after rejecting an application for licence renewal by Nyala Mines Limited whose licence expired in October 2017.
Nyala Mines Limited was granted a 10-year contract to mine rubies in the Chimwadzulu Hills corundum deposit , Traditional Authrity Mpando, in Ntcheu T/ District but failed to honour a development agreement which among other things stipulated that locals have 30 percent participation in the mine, 10 percent of the equity of Nyala is issued to government.
The agreement also specified that government receives 10 percent royalty of the gross value of corundum exported.
Meanwhile, there is great expectations from Mwalawanga Mining Ltd which is wholly owned by Malawians and led by lawyer Ishmael Wadi, former Director of Public Prosecution.
Wadi said his company will not walk away to the spirit of integrity as it will fulfil its corporate social responsibility (CSR) and pay royalties as expected.
He said Mwalawanga Mining is “ready” to start implementing plans.
Department of Mines chief mining engineer Cassius Chiwambo told Nyasa Times in an interview that the new licence holder Mwalawanga Mining Limited was awarded the mineral rights for Chimwadzulu was failing to kick-start its operations on the mine site due to Nyala’s court action after government rejected the latter’s application for renewal of the mining licence.
Nyala Mine Limited sued government for not renewing their licence but they lost the case.
“Having granted the Mining Licence to Mwalawanga Company Ltd, government understands that there are several pre-mining activities which the company is obligated to undertake such as Conduction of an Environmental Impact Assessment (EIA). The Company is also expected to put in place all necessary mining facilities to enable it roll out its operations as required by International standards.
“In view of this, government expects that company to fully roll out its operations by 1st December, 2018. It is the hope of government that it will start collecting production figures’ reports by end of January, 2019,” Chiwambo said.
He said it is government’s expectation to see the former Nyala Mine Licence Holder vacate the mining area so as to pave way for the new investor.
“An official handover ceremony was conducted where government of Malawi officials (Mines Department officials as led by the Acting Director of Mines, Mr. Atileni Wona), Mwalawanga Company Limited officials (as led by Mr. Ishmael Wadi), Nyala Mine Company Limited, Hon Kamuyambeni,T/A Mpando, Group Village Headmen and leaders of Tonse Tipindule Group attended the meeting,” he said.
Meanwhile, US-based buyers for Chimwadzulu mine products have expressed interest to work with the new licence holder in ensuring that there continues to be a ready market for the products.
US-based International Mining Consultant, David Hargreaves of Fair Trade Gemstones Ltd, said despite the change in ownership of the mineral rights, his company is still interested to continue buying from the mine and promoting it worldwide.
“My company, Fair Trade Gemstones is still interested to buy from the mine and promote it worldwide through its associate, Columbia Gem House of the USA. Columbia Gem House has done much work in developing the marketing and the financing of local facilities, including schools, hospitals and water,” he said as quoted by Mining in Malawi publication.
Hargreaves also said he could be materially useful to the restoration not only of the mine but also the furtherance of the gemstone industry in Malawi.
Wadi welcomed the proposal from Fair Trade Gemstones saying his company is ready to work with any party in the development of the mine at all levels starting from production to marketing.
Nyala rubies are some of the most precious stones and can sell from as low as $500 (K170 000) to $12,000 (K4.08 million) per carat (200 grammes) for stones from a half-carat to three carats.
Malawi is traditionally considered as an agro-based and not a mineral-based economy. It has been argued that this is because of the policies that government pursued since independence leading to a lack of mining culture, little technical capacity and inadequate foreign and local investment which contributed to the slow development of the industry.
However, government launched the minerals and mining policy and expect contribution of mining to increase to at least 20 percent within the next 10 years.
The Government of Malawi recognises that the minerals sector has a significant potential to contribute towards the rapid economic growth and development of the country. Currently, the sector is still very small despite its favourable geology and known mineral potential.
Mining is expected to surpass the contribution of agriculture to GDP which is currently at 30 percent. This will be a gradual process considering that the mineral sector contribution to GDP is currently at 10 percent.Follow and Subscribe Nyasa TV :