Transcript A Situational Analysis Of Mines & Minerals in Malawi
A Situational Analysis Of Mines & Minerals in Malawi Rafiq Hajat IPI
Background
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Malawi was historically not thought to be well endowed with mineral wealth. Indeed, the late Dictator Dr. Kamuzu Banda rallied the people to greater efforts by stressing that though Malawi did not have gold, diamonds and copper, it had something just as valuable – fertile soil and plentiful water to grow more maize – our ‘green gold’.
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He obviously did not envisage a day where the situation would change drastically – where the global energy equation would change so radically as to make our hitherto 'non commercially viable mineral deposits attractive to multinational investors.
Deposit
Mineral Reserves in Malawi (Known)
Location
Bauxite Mulanje Uranium Kayelekera Karonga/Chitipa Monzanite/ Strontianite Kangankunde – Balaka
Delineated Reserves (Million tonne/grade)
28.8/43.9 AI2O3 2.4/ 11.0/8%Sr, and 2% REO Corundum Graphite Limestone Titanium Heavy Mineral Sands Vermiculite “ Coal Phosphate “ Limestone Pyrite Glass sands Dimension Stone Chimwadzulu – Ntcheu Katengedza – Dowa Malowa Hill – Bwanje Salima-Chipoka Mangochi (Makanjira) Feremu -Mwanza Mwabvi – Nsanje Ngana -Karonga Tundulu -Phalombe Chenkumbi -Balaka Chisepo-Dowa Mchinji Chitipa, Mzimba, Mangochi, Mchinji Gemstones Mzimba, Nsanje, Chitipa, Chikwawa, Rumphi, Ntcheu 8.0/75.6 gm per m3 2.7/5.8%C 15/48% CaO, 1.2% MgO 700/5.6% HMS 680/6.0%HMS 2.5/4.9% (Med + Fine) 4.7/30% ash 15/21.2% ash 2/17% P2O5 10/46.1% CaO 6.3% MgO 34/8% S 1.6/97% SiO2 Black and blue granite, pink granite, green granite NA
2003 - the mining sector grew by 23.5%;
2004: Malawi’s gross domestic product (GDP) was about $7 billion at purchasing power parity.
The GDP rose by 4.3% in 2004 compared with 3.9% in 2003. Manufacturing accounted for 11% of the GDP; construction, 2%; electricity and water, 1%; and mining and quarrying, 1%;
Formal employment in the mining sector amounted to about 2,700 workers in 2004; artisanal mining for aggregate and sand and gravel was estimated to be considerably greater. (International Monetary Fund, 2004, p. 46; 2005, p. 206; 2005
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1; Ackim Wona, Chief Mining Engineer, Malawi Department of Mines, written commun., July 18, 2005).
Gains realised from Minerals in 2004 Mineral/ Product Production Sold Sales Value (MK) Processing Fees Royalty (MK)
3 4 5 1 2 Coal Quarry Rock Aggregate Cement Limestone Agric. Lime Gemstones & Mineral Specimens 6 Blue Agate
QUARTERLY TOTAL July – December Total Cumulative Total to-date
8,773 t 23,780m 3 4,910 t 1,826 t 580kg 49 t 41,543,437 37,609 793 24,538 7,528,180 466,255 1,685,000
88,857,208 208,336,654 297,193,862
750 3 000 4 250 4 250
12,250 17,750 30,000
300,000 1,881,487 1,227 4,246 46,130 168,500
2,401,590 4,784,627 7,186,217 GOM QUARTERLY MINING BULLETIN Jan-March 2004 Total Revenue GOM (MK)
300,750 1,884,487 1,227 4,246 46,130 168,500
2,413,840 4,802,377 7,216,217
Mineral Extractions 2000 - 2004
Commodity
Cement; hydraulic Coal; bituminous Lignite Dolomite Gemstones Kg Kaolin Lime Ornamental Stones Sodium Silicate Stone: crushed for aggregate Dimension: crude & partly worked Limestone: for cement Vermiculite
2000
155,920 34,260 1,200 719 21,886 N/a 1,538 125,200 78 144,000 -
2001
180,761 34,410 49.4
1,800 825 6,177 n/a 594,979 483 167,000 1
2002
174,283 43,372 394.5
2,305 636 6,776 120 113,992 170 86,234 -
Thomas R. Yager - “The Mineral Industry of Malawi” 2003
190,000 47,037 400 2,297 800 18,877 450 159,952 130 23,965 -
2004
190,000 40,891 5,400 1,820 800 23,095 320 168,600 130 21,224 -
Legislative Framework
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Mineral activities are covered by the Mines and Minerals Act, 1981; the Mines and Minerals (Mineral Rights) Regulations, 1981; and the Petroleum (Exploration and Production) Act of 1983.
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The Mines and Minerals Act of Malawi was passed during the single party era of Dr. Kamuzu Banda on 1st July 1981 and 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.”
Legislative Framework
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“ Nothing in subsection (1) shall operate so as to affect any interest of a person in earth, clay, granite, limestone, marble, sand, stone or other similar substance upon or in land, being an interest created by virtue of any Certificate of Claim or ownership of land or other disposition made by or on behalf of the British Crown.”
Mines and Minerals Act
1981 Cap 61:01
Mines and Minerals Act Amendment1996
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Environmental impact assessment must be submitted to the Department of Research and Environmental Affairs for review with each mineral rights application
Mines and Minerals Act 1996
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However the extant pieces of legislation were reviewed/amended in a piecemeal manner and did not reflect the new realities holistically – i.e. the methodology used in assessing and granting approvals for applications for prospecting and mining licences still vests too much power in ministerial discretion and does not provide for broad based consultations with stakeholders such as Civil Society, Traditional Authorities and Professional Bodies augmented by inclusion of parliamentary scrutiny and oversight roles in the appraisal of mineral extraction applications of national significance, such as the Kayelekera Uranium Project.
New Mining Legislation
April 2010 – The Dept of Mines and Minerals held a consultative meeting with all stakeholders in Lilongwe to review the new draft Mines & Minerals Act; Civil Society used the opportunity to, amongst other things, insist upon mainstreaming pro poor and grassroot community developmental aspirations as well as to stress the need to build governmental capacity to deal with highly esoteric aspects of mining with competence and confidence;
National Mining Policy
There were indeed, some initiatives to formulate and adopt a National Mining Policy in 1995 but these seemed to flounder and there was very little discernible movement for some time, however a new Draft Mining Policy is now nearly ready for appraisal and the rapport that has been crafted with government augers well for Civil Society participation in the consultative process; This Policy, when adopted, would provide the framework for the new Mines and Minerals Act, which would go some way towards prevention of abusive exploitation of Malawi’s precious (finite) mineral resources
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Mining licenses currently used in Malawi Mineral permits/rights; Exclusive prospecting licenses; Mining licenses (which are submitted to the Commissioner for Mines and Minerals for further consideration and approval by the Licensing Committee);
Licenses Issued Jan-March 2004
Mining Licence Exclusive Prospecting Licence Reconnaissance Licence Reserved Minerals Licence Mining Claim Non-Exclusive Prospecting Licence
5 7 7 11
Source: GOM QUARTERLY MINING BULLETIN Jan-March 2004
Mining Companies operating in Malawi
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Millennium Mining Limited (MML) - EPL 096/2000, 103/2000 and 0115/2002 for exploration of three heavy mineral sands (HMS) projects in Salima, Makanjira (Mangochi) and Lake Chilwa (Zomba) respectively, which aim to extract ilmenite, rutile and zircon;
• Allied Procurement Agency Limited (APA)
and garnet; is developing the Chipoka HMS project for the extraction of ilmenite, rutile, zircon
Mining Companies operating in Malawi
• Lisungwi Mineral Resources Limited (LMRL)
2004.
together with ACA Howe International carried out compilation and analysis of geological, geochemical and geophysical data and identified three gold and platinum targets for detailed exploration work, including drilling, to be carried out during the dry season of
• Mchenga Coal Mines Limited (MCML)
is involved in coal extraction and plans to increase production of coal to some 5000 tonnes per month with exploration for additional coal resources within the Livingstonia coalfield.
Mining Companies operating in Malawi
• Albidon Limited
hold concessions over four areas comprising Mpemba Hill, Kapeni River in the southern region, and Linthipe and Katakwi in the central region in respect of nickel, copper exploration.
• Maravi Minerals Development Limited (MMDL)
Limited is exploring the Thambani Mountains and Mzimba pegmatites for tantalite minerals, zircon and corundum, under EPLs 0118/2002 (Thambani) and RL 033/2002 (Mzimba)
Mining Companies operating in Malawi
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Rare Earth Company is developing the Kangankunde Hill monazite and strontianite deposit under mining licence ML 0122/2003 and plans for full scale operations are well underway
• • Gondo Resources -
much confidence.
bauxite reserves in Mulanje Mountain. Their lack of experience, coupled with the complexity of extraction in a very delicate ecological environment that has been recognised as a World Heritage site, does not inspire
Paladin Resources
Uranium mine in Malawi and may have opened the doors for many more to come; of Australia – commissioned the 1 st
Kayelekera Settlement
Paladin Resources Ltd.
The Government of Malawi CSMNM Members Up to US$8.2 million towards a water treatment plant for potable water to serve the 30,000 residents of Karonga; US$1.8 million to be deposited into a fund for community development projects – to be decided upon by the people of Karonga; Upgrade the Karonga Aerodrome to international standard, thereby creating a new international air hub in that region; Refurbish and upgrade the dirt road from the airport to the mining site into a tarmac road which would be able to cope with the heavy traffic that would ensue in due course; Introduce Jatropha to farmers in the region and trans-esterification processing plants that would produce bio-diesel as a cost effective and environmentally friendly alternative to the importation of diesel for the generators at the site. This would establish Karonga as a valuable source of bio-fuel in the northern region – even after closure of the mine; Review and update the Mines & Minerals Act (1981) in line with internationally accepted ‘best practice’ standards - with active participation of CSMNM; Develop supporting legislation for the transportation and handling of Radioactive & Hazardous Substances that conforms to internationally accepted ‘best practice’ standards - with active participation of CSMNM; Set up, with active inclusion of specific CSMNM members, a Monitoring Committee to oversee and evaluate all aspects of the mining operation at Kayelekera. The Committee would be given free access to all areas of operations and be granted the power to stop mining operations in the event of any serious violation or transgression discovered; CSMNM would be consulted as a partner in all future mining agreements entered into by the Government; Withdraw the Court action and not revive it on the issues that had already been agreed upon; Cease the campaign against the Kayelera mining operation and Paladin resources Ltd.; Provide competent participation in the Monitoring Committee; Respect confidentiality of all information gleaned during monitoring exercises; Perform a positive and creative role as a partner in future issues emanating from development of extractive industries in Malawi, by being a conduit for local aspirations, alternative views and unheeded expertise – amongst other things;
Recommendations
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A comprehensive and transparent review of all mineral deposits in Malawi;
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A comprehensive holistic review of extractive industry legislation premised on inclusivity and adherence to international best practices standards;
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Remove concentration of discretionary powers in individual offices;
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Build local technical capacity in GOM/Civil Society to cope with current realities/new demands in issuance of permits and subsequent monitoring and conservation of finite mineral resources;
Recommendations
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Create a Stakeholder Forum mandated to oversee all permit issues to ensure equitable benefits for Malawi and thereafter, to monitor mining operations;
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All current operations must be revisited to ascertain adherence to international best practices standards;
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No new permits to be granted until all the above recommendations have been realised;
Conclusion
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It is apparent that Malawi stands at a crossroads that is unique in its agro-based history, by virtue of being the source of rare minerals that are of major global strategic significance. Malawi thus has to rely on all the expertise that well wishers’ have to offer in order to develop a framework that provides the best mechanisms for an equitable realisation of the optimal benefits that could accrue therefrom. It is entirely conceivable therefore, that Malawi could thus find the path towards shedding its poverty stricken image forever.
Conclusion
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The choices that are made at this crucial juncture will therefore determine the economic and environmental future of this country and it is imperative to ensure that all decisions are made in the most transparent and inclusive manner that will harness the active participation of all stakeholders. Any divergence or compromise in favour of personal agendas or any other reasons whatsoever could spell a catastrophe from which there will be no return.
Conclusion
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