Mining & Trade News

The World Bank says Malawi’s mineral exports have the potential to replace tobacco as Malawi’s top foreign exchange earner within six years of production.

This is outlined in the 2024 Malawi Economic Monitor report released by The World Bank.

The report establishes the promise of mining exports to fuel economic development and validates the sector’s role as a central driver of growth and industrialization.

The report further emphasizes that mining can contribute significantly to the country’s public revenues.

“Potential fiscal revenues could contribute to more than 10 percent of total public revenues,” the report reads.

However, the report shows that the promise of mining will take some years to fully materialize and hinges on adequate policy.

“The pace and progression of mine development in Malawi relies not only on the technical aspects of the projects but equally on the governance of the sector,” explains the report.

It says key factors such as an appropriate fiscal regime, streamlined permitting, strong community engagement, and sufficient infrastructure will shape the mining sector’s trajectory as highlighted in the report.

While mining presents promising opportunities, the Brettonwood institution acknowledges that translating the proven resources in the ground into wealth for ordinary Malawians remains a critical challenge.

“The capital-intensive nature of the mining industry limits potential employment, with the researched projects only expected to generate 20, 000 jobs,” it says.

The report, therefore, highlights the importance of not neglecting other employment-intensive sectors and cautions the country against falling into the “presource curse” trap, where mining revenues are spent prematurely before they materialize.

The report states: “The government also needs to avoid falling victim to the “presource curse,” by spending mining revenues which may never materialize”.

Amidst the ongoing economic crisis, the report notes that Malawi has seen a decrease in imports of fuel and fertilizer compared to pre-crisis levels, even though their share in the total value of imports has been rising.

“Recent revisions of Malawi’s trade data show that fertilizer and fuel accounted for 27.1 percent of imported value since the start of 2022, compared to 18.8 percent two years earlier. However, this still represents 6.1 percent fewer liters of fuel and 30.6 percent fewer bags of fertilizer, reflecting the substantial increase in the cost of both commodities over the past two years,” reads the report.

The Malawi government says it has recorded an increase in coal production from 30,250.76 tonnes in 2021 to 62,166.06 tonnes in 2022 reflecting a 106 percent increase.

This is outlined in the 2022/2023 annual economic report published by the Ministry of Finance and Economic Affairs.

The report attributes the rise in coal production to high resumption of industrial activities after recovering from Covid-19 pandemic and improvement of some companies’ production through optimizing their operations with improved equipment and processes to meet rising demand during the period.

However, the report states that it was not been all rosy in the cement industry as there was a 40.3 percent decline in production of limestone, the major ingredient in cement, compared to the previous reporting period.

The report reads: “Shayona Cement Factory and Cement Products Factory produced 277,979.36 tonnes of limestone, representing a 40.3 percent decline in production compared to the previous reporting period. Similarly, iron ore production fell by 80.3 percent, with only 981.61 tonnes produced in 2022.”

“This was largely driven by high production costs in cement manufacturing and competition with cheaper cement that is smuggled into the country.”

The report also notes that despite awarding more mining licenses in rock aggregate, production declined by 36 percent. A total of 504,536.04 tonnes were produced in 2022 compared to 783,416.55 tonnes in 2021.

“This is because a number of the new quarries were in the construction phase and hence had not commenced quarrying activities. Furthermore, some project quarries delayed to commence production due to shifting timelines of civil construction projects.” the report reads.

Meanwhile, the report states that rock aggregate production is expected to increase as more civil construction projects are in the pipeline and the general public continues to embrace concrete products.

In the current financial year, the government plans to maintain public engagement on mining issues through social media, mainstream media, and other public forums, review the Mines and Minerals Policy to create a more attractive investment climate in the country and develop a National Strategy on Mineral beneficiation and value addition in order to foster productivity, transparency, and accountability of the mining sector so that it contributes significantly to inclusive wealth generation and economic growth in line with the 2063 Vision.

A global conglomerate of Jewish companies of a cross-sector industry portfolio, the Inosselia Group, is the one refining gold which the Malawi Government is purchasing from local artisanal and small scale miners (ASMs) through Export Development Fund (EDF), a subsidiary of the Reserve Bank of Malawi (RBM), Mining & Trade Review has established.

As a way of expanding its global footprints in both mature and emerging markets across Europe, Middle East and Africa, the Group has its local base in Lilongwe close to Kamuzu International Airport (KIA).

Apart from pursuing agricultural investments including mega farms, Inosselia has set up a well-equipped and standard gold refining facility.

President Lazarus Chakwera recently informed the budget meeting of the National Assembly that the RBM has commenced the process of purifying gold with assaying. 

In his address, Chakwera told the house that the process is being done locally with a local gold refining company located at Kamuzu International Airport in Lilongwe. 

The statement raised eyebrows of some stakeholders including in our social media groups who were interested to know who owns the refinery, why it is located at the airport and also the agreement that the owner has with the Malawi Government.

EDF Manager for Precious Stones and Minerals Elyvin Chawinga explained to Mining & Trade Review in an interview that the refinery is located close to the airport but not within KIA premises.

Chawinga disclosed that EDF chose to purify the gold at the company because no any other company within the country had the capacity of refining gold.

She also said EDF assigns the company on one time off basis and that no agreement was signed between the company and the Malawi Government. 

Chawinga said: “The refinery is entirely a private entity and there is no any agreement that is there between government and the company.”

“What we do is that we take the gold in raw form and give them. We inspect the process of refining and we take the product which is in bar form back to Reserve Bank for storage.”

“If another company comes in with a refinery, we are free to choose which one to use at that particular time.”

Since the structured gold market commenced in May 2021, RBM has purchased a total of 187 kilograms of smelted and assayed gold at a total cost of MK19.2 billion, and with a total value of MK22.1 billion.

The gold is currently being held within RBM and undergoing further refining process and casting into gold bars to be part of the official reserves.

Commenting on the concern of why the gold is not being sold due to the foreign exchange challenges the country is experiencing, Chawinga asked for patience from Malawians saying the Reserve Bank governor will decide the opportune time to sell the resource. Chawinga said a decision to sell will be made when gold

Stakeholders in Malawi’s extractive sector had an opportunity to share knowledge and experiences on issues of transparency and accountability with colleagues from the Southern Africa region thanks to a workshop that a civil society group the Centre for Environmental Policy and Advocacy (CEPA) through the UNIKA-Strengthening Transparency and Accountability in the Malawi Extractive Sector Project hosted in Lilongwe.

The workshop was aimed at equipping stakeholders from the extractive sector with knowledge and experience on how they can strengthen extractive governance.

It was organized under the theme of ‘Strengthening Natural Resources Governance through Shared Learning.’

The workshop brought together players from Civil Society, members of the Extractive Industry Transparency Initiative (EITI) Multi Stakeholder Group (MSG) in the Eastern and Southern African (ESA) countries, Malawi government and the Media. 

Executive Director for CEPA Herbert Mwalukomo hailed the meeting saying it provided a platform where local players learnt how stakeholders handle issues of transparency and accountability across the southern Africa region.

Mwalukomo also said the workshop enabled players to deliberate on how the extractive sector is benefiting locals in various mining areas across the country.

He said: “Ultimately we are looking at how Malawi is benefiting from the extractive industry. So this workshop is all about learning from our colleagues in the region in terms of what they have done in upholding issues of transparency including tax justice.

“That is why we have invited even colleagues from Tax Justice Africa to share experiences from the entire African region so that we can use those lessons in applying good practices in Malawi.”

“As you know as a country we have just established a company that will be working under Malawi Development Corporation to try and run own projects or own shares in some of the companies that are in the extractive sector. So the question is how can we make use of that opportunity to ensure that we do not go through the same old terrain where we were actually ripped off as a country?”

“We have to make sure we are doing it equitably and that communities around the projects are getting maximum benefits, at the same time we have to ensure that the country is attractive to investors from all over the world.”

CEPA invited members of EITI MSG who are also under Publish What Your Pay (PWYP) representatives from countries such as Zambia, Tanzania and Uganda.

Malawi joined EITI and adopted the EITI framework in 2015 to be part of the global standard. MWEITI is coordinated by the Secretariat under the Ministry of Finance and Economic Affairs, and brings together different players in the sector.

In his remarks, Leonard Mushane from MWEITI Secretariat lauded the 2023 EITI Standard saying it has huge impact on the extractive sector of the country.

Mushane said unlike the previous EITI Standard, the new standard incorporates new crucial areas including gender and energy transitions.

He also said despite having a panicking economy, Malawi is doing fairly well in terms of tax justice compared to other developing countries.  

Mushane said: “From my understanding in terms of tax justice, the country is not doing entirely bad because looking at our tax base we cannot compare it with developing countries since we have a small economy.”

“Our system is doing well because those that earn more pay higher taxes than those who earn less,” he said.

He, however urged mining companies to ensure that they conduct a larger part of their mineral processing activities within the country to maximize their contribution towards the Malawi’s economy.

 “We hear issues of externalization of funds, transfer pricing, a lot of tax planning with these multinational mining companies. So we need to do more so that we can protect our economy and our tax system,” said Mushane.

But Mushane lamented that MWEITI Secretariat is facing numerous challenges including lack of financing and understaffing, which are weighing in on its activities including dissemination of EITI reports.

“We are not able to reach out to the ground. People do not know much about our reports because of financial challenges that have also triggered lack of networking with CSOs,” he said.

CEPA organized the workshop with funding from Southern Africa Trust, an independent non-profit organization and grant making entity.

Commenting on the progress of the UNIKA project, Communication and Research Associate for Southern Africa Trust Moyna Mwenye said she is impressed with how CEPA is spearheading the transparency and accountability aspect in Malawi’s minerals sector to benefit and safeguard lives of communities.

Mwenye said: “Our specific interest to work with CEPA is to ensure that people’s lives are being safeguarded.”

“Whatever companies in the extractive sector are doing directly impacts communities on the ground, and these people need to be informed about mining projects in all stages.”

“That is why we are working with CEPA as well as other partners in Malawi and other countries to ensure that whatever happens on the ground is transparent, people know the impact, are participating and also contributing in reducing their poverty and levels of inequality,” said Mwenye.

Southern Africa Trust is currently working to support partners in the Southern Africa Developing Community (SADC) region in various thematic areas including gender justice, climate justice, youth empowerment, resources governance and socio-economic recovery.

The workshop covered areas such as beneficial ownership disclosure, EITI regulatory framework and tax justice.

We welcome news that ASX-listed Globe Metals & Mining has finally decided to set up a refinery for the Kanyika ore in Lilongwe rescinding its earlier decision to refine the ore outside Malawi.

We thank Globe Metals for making this important decision despite having both the mining license and mining development agreement which legally empowers them to start mining at Kanyika.

As reported in our front page article, this announcement by Globe meets Malawians long-expressed wishes for local value-addition, instead of seeing the country’s mineral resources routinely exported overseas to be transformed into high-value saleable products.

By producing Niobium and Tantalum oxides within Malawi for export to world markets, the Kanyika Mine will add significantly to the country’s foreign exchange earnings, boosting the Balance of Payments account and raising the National Gross Domestic Product.

We also feel this refinery will provide lots of jobs to Malawians which would have been lost if processing of this ore was to be conducted in Namibia.

In addition, the setting up of this refinery in Malawi will assist in capacity building of the locals who will acquire knowledge and skills from expatriates engaged at the facility.

Setting up of this refinery in Malawi will also assist Government to easily monitor the products from the ore as the Kanyika deposit contains niobium, tantalum, uranium and zircon.

We, therefore, appreciate the efforts by the Malawi Government to convince Globe Metals to set up this refinery within Malawi.

We share the view of the Malawi Government that local value addition is the way to go for Malawi if the country is to fully reap from the potential of its mineral sector.

The country is producing graduates in mining related courses such as metallurgy who are expecting to get jobs and the best way to create jobs for them is to establish laboratories for mineral processing and refineries within Malawi.

Countries in the region such as Zimbabwe, Tanzania and Zambia are encouraging local value addition so Malawi does not have to lag behind.

The current hype in exploration activities for industrial minerals such as niobium and rare earths is a clear indication that Malawi has enormous potential for these minerals so it is important that Government should uphold strict local content policies to maximise benefits for the nation.  

The Ministry of Mining says construction of the new mineral laboratory in Area 4, Lilongwe will adequately benefit the artisanal and small scale miners (ASMs) in Malawi.

Public Relations officer in the Ministry Tibonge Kampondeni tells Mining & Trade Review that the construction of the Mineral Laboratory, which State President Lazarus Chakwera mentioned in his State of the Nation Address at the opening of the current budget sitting of Parliament, was completed and some of the equipment has been purchased, waiting for commissioning.

She says the facility will start operating once the equipment is commissioned and the staff are trained on how to operate it.

Kampondeni explains that when the laboratory is commissioned, the Ministry will utilize it to provide training programmes to ASMs in cutting and polishing of stones, and some value addition in order to generate more revenue from their products.

“When you do value addition, prices increase. This will result in more revenue generation for the ASMs,” says Kampondeni.

She says understanding that most of the ASMs sell raw minerals which reduces their benefits, the new facility will focus on processing targeting gemstones.

“In terms of capacity building, we are looking at procuring more mineral analysis equipment, but currently we will focus on processing,” says Kampondeni.

She also says the Ministry of Mining will continue with its initiatives to support the ASMs to increase their productivity including formalizing them into registered cooperatives that can be easily accessed for provision of training and financial support.

Kampondeni says the Ministry has planned to continue training the ASMs in sustainable mining and recent technologies to help them mine optimally to avoid cracks in the stones.

Malawi’s 2023 annual economic report indicates that in 2022, the country recorded higher gemstone production amounting to 329.45 tonnes reflecting an increase of over 2000 percent compared to the production in 2021.

Gemstones produced included aquamarine, amethyst, citrine, garnet, rhodolite and ruby. The report, nonetheless, says that despite high gemstone production, value addition is still very low such that potential revenues are lost as gemstones fetch lower prices in their rough (unprocessed) form.

“Investment in value addition would generate significant income, provide employment opportunities, and create business opportunities in jewelry production and selling,” reads the report.

Malawi has one of the most diverse ranges of coloured gemstones in the SADC region. Most gemstones are mined locally by artisanal or small-scale miners, whereas some are introduced into the market through international trade, especially from neighbouring countries such as Zambia and Tanzania.

Globe Metals and Mining Limited has announced that it plans to produce high-grade Niobium and Tantalum products in Malawi at a Lilongwe-based refinery, and is in discussion with the Government of Malawi regarding the financial incentives and location for the new plant.

The announcement by Globe meets Malawians’ long-expressed wishes for local value-addition, instead of seeing the country’s mineral resources routinely exported overseas to be transformed into high-value saleable products.

By producing Niobium and Tantalum oxides within Malawi for export to world markets, the Kanyika Mine will add significantly to the country’s foreign exchange earnings, boosting the Balance of Payments account and raising the National GDP.

The move by Globe follows extensive research and test-work over the past many months, reviewing and fine-tuning refining technologies to optimise engineering designs for the mining and concentrate recovery processes which are aimed at maximising value from the Kanyika orebody.

By changing the refining technology to a benign process based on the use of chlorine – which is environmentally sustainable and cost-effective – Globe will be able to produce high purity products that attract premium prices from international buyers in the speciality metals markets.

The benign chlorination technology was perfected by Globe’s research partners, and its use in Malawi to produce high-purity metal oxides will replace the original plan for Hydrofluoric Acid (HF) recovery process at a refinery to be located in the UAE.

(Note: Hydrofluoric acid is extremely poisonous and corrosive, and is fatal if inhaled or swallowed- it requires extensive neutralisation before wastes may be safely disposed.)

Globe’s engineering design has focused on optimisation of the milling and concentration circuits, with greater efficiencies and recovery rates achieved through innovative improvements to the milling and flotation circuits. One example is the reduction of reagents in the revised flotation suite from the initial 12 to only 4 reagents required.                          (Reagents are special chemicals used in the recovery flotation process, and represent a significant cost as they are not available in Malawi and must be imported.)

The refinery process available to Kanyika’s production also allows for the recovery of materials other than Niobium/Tantalum, and offers Globe wider opportunities that include refining for mining operations in Malawi and in neighbouring states.

Current projections for the Mine envisage an initial Phase 1 lasting 3 years, requiring US$29 million capital expenditure and producing 1,760 tons per year of concentrate. Kanyika’s concentrate will be transported to the planned refinery in Lilongwe where high-grade oxides will be produced. Annual turnover in Phase 1 is estimated at US$20m. 

The Mine will ramp-up after the 3-year Phase 1, expanding capacity during Phase 2 to 1.5 million tons-per-year (mtpa), and producing 17.7 k/tpa of concentrate for the planned Lilongwe refinery. Annual turnover in Phase 2 is estimated at US$205m, and the life of the Kanyika Mine will be extended by three years – effectively until around 2050 – as a result of the Phase 1 interlude.

Globe is currently pursuing funding for this project and has in recent months attended investor conferences in South Africa and Australia. Once the funding is in place, construction at the Kanyika mine site will begin.

Niobium has many applications in the New Economy Aerospace, and Niobium alloys NiNb and Vacuum Grade are used in aerospace and defence industries due to their high strength, low density, and resistance to temperature extremes.

Niobium is also used in the Nuclear industry due to its high-temperature absorption, strength and resistance to corrosion. It is used in reactor components, fuel elements and surface acoustic wave devices. Thermo-Power Niobium is used in Ultra Temperature Thermal Power, due to high-temperature and corrosion resistance, also in high temperature pipes.

Super Conductor Niobium metal is used as superconductors in particle accelerators, such as the CERN Large Hadron Collider in Switzerland (CERN is the acronym for the French “Conseil Européen pour la Recherche Nucléaire“, or European Council for Nuclear Research.)

EV Batteries: As the green energy transition gathers pace, Niobium’s use in electric vehicle batteries has the potential to decrease charging times, increase range, improve battery life and maximise performance. Niobium oxide makes batteries greener, cheaper and cleaner.

Niobium oxide increases the energy density of batteries by ultra-fast charging, and Niobium oxide batteries are more stable because of their ability to withstand extremely high temperatures. Toshiba’s Niobium Titanium Oxide (NTO)-SCIB battery provides a range of up to 320km, reaches 90% charged capacity after six minutes, and fast charges to 80% capacity after 25,000 charging cycles. At lower operating temperatures Niobium oxide batteries can be fully charged in less than 10 minutes – versus 6 hours for conventional EV batteries.

Niobium oxide is used for specialised ophthalmic lenses, because it combines the advantages of high refractive index and relatively low value of specific gravity for a glass. Additionally, 65% of Niobium is used in ferro-niobium’s production of High Strength Low Alloy (HSLA) steel.

Globe is well pleased with the outcome of the research and design work carried out by specialist scientists in laboratories in South Africa. With such highly satisfactory results, the Kanyika Mine is now on a secure and financially viable track and promises to deliver benefits over many years both to the Malawi nation and to the investors in the project, all of whom have waited patiently for a long time to arrive at this exciting and positive point.  

The Lilongwe City Council has advised burnt brick moulders in the city to migrate to moulding cement blocks in order to conserve the city’s environment.

Lilongwe city council’s director of Parks, Recreation and Environment Allan Kwanjana told Mining & Trade Review in an interview that the government with the spirit of protecting the environment from the destruction caused by the process of molding and burning bricks is taking an important direction that those involved in this destructive practice should be taxed heavily to eventually drive them out of the business.

Kwanjana explained that there is a lot of sand in the shores of Lake Malawi and along some big rivers in Malawi which if used technologically can be developed to come up with cement blocks which can be used for construction instead of burnt bricks.

He also said that the government is doing everything necessary to encourage the cement brick business and also encouraging investors to invest in new technologies that will come up with building materials which are environmental friendly.

Kwanjana said the Council is contemplating “developing guiding policies with legislative tools to enforce environmental friendly practices to gradually stop this way of creating building materials.”

He also said that those who are involved in the burnt bricks business should be required to restore the land they have destroyed by burying the pits they create and plant vegetation and tree.

Kwanjana also pointed that the move to stop the practice of molding and burning bricks will affect both the manufactures of the burnt bricks and the users economically.

But brick moulders in the City have put their foot down insisting that they will continue their trade despite government’s pressure to stop the business.

Charles Jumbe, a brick moulder who does business in Chiudzira Township in the City, told Mining & Trade Review that without the government empowering them with seed capital to upgrade into the cement blocks business, they cannot leave the business of moulding and burning bricks.

Jumbe said for one to venture into cement block production, there is need for huge capital injection to purchase raw materials such as cement and quarry dust.

“The business of burnt bricks puts food on my table and pays my utility bills and for me to venture into cement block business I need to generate at least some millions of Kwacha which I cannot afford,” said Jumbe.

He called on government to engage financial institutions to ease conditions for the brick moulders to acquire loans so that they have the capacity to start the cement block production business.

Another brick moulder based in Nathenje, Bright Mkuche said he cannot stop the business because it is his only way of survival.

“Cement blocks are for those who have got cash and most of us, Malawians, in brick business are poor hence cannot afford to venture into this very expensive venture,” Mkuche said.

Small-scale miners in the newly discovered gold mining hotspots in Southern Malawi are encountering a myriad of challenges including lack of training on sustainable mining practices and utilisation of primitive mining equipment, which are negatively impacting on their production and causing serious environment degradation in the mining sites.

Mining & Trade Review visited Milepa in Chiradzulu, and other near-by hotspots of Zomba and Mulanje along the Namadzi River including in Moleni and Chikomwe Villages in Traditional Authority (T/A) Mbiza area in Zomba, and Mgunda Village in T/A Mpama in Chiradzulu – along the Mwaye river, which is a tributary of the Namadzi River.

 “Just look around this whole mining area, people are using picks and shovels and relying solely on guess work to decide where to excavate. Had it been that they had gold detectors they would easily spot the right places to extract gold and so too if they had mechanized digging equipment, they would save time and reap big,” said Yamikani Maduka, chair of the grouping of small scale miners in the area in an interview at the Moleni site.

He, just like others interviewed, called for support from the Malawi Government to overcome their problems and scale up production from the area, which is producing gold of good quality.

Artisanal and Small Scale Mining (ASM) activities in these areas started in November last year and have attracted people from different areas including foreigners who are renting portions of plots to conduct mining activities from traditional land owners.

“We rent a portion of land measuring 1 by 4 metres at K140,000, and because we do not have gold detectors, it is a gamble as we may not get the intended return. Mostly I have 25 to 30 people doing the digging for me, and I pay them K2,500 per day. I also pay some people engaged in earth moving  K2,000 per each, and provide food for them daily, it is quite an expensive venture,” said Honest Chitimbe, a Mozambican our reporter interviewed at the site.

He said a network of friends alerted him of the gold potential in the Milepa area, and he risked the odds to come and embark on the venture.

“We sell the few grams of gold we find to buyers who come here, who in turn sell to Export Development Fund, and other buyers they know,” said Chitimbe.

Another ASM Damson Chimphamba said they sell their gold to buyers at K100,000 per gram; and can acquire between 8 to 12 grams from the portions they buy at K140,000.

“If we have proper expert advice and machinery, especially detecting and digging ones, we would obviously make more profits, hence improve our livelihoods. I have two portions measuring 2 by 2 metres, I have since made a loss on one, and a profit on another,” he said, urging government to come in to equip the locals with necessary mining technologies.

Black Gondwe, a miner and buyer of gold, said the gold deposits in the area would have improved the welfare of the locals if proper machinery was available.

Gondwe said: “For instance, in our case, we employ diggers, buy gold from local miners, and sell to EDF. We buy the gold at K100,000 per gram, but considering that there is no proper equipment, the job of finding right volumes of gold, is cumbersome.”

“Of course I am one of the few people who use machinery [compressor and water pump] to process the gold grains. However, using primitive equipment for excavation is hard, and it is why we need machinery,” said Gondwe.

The Malawi Government is, currently, formalising small scale miners in the country into cooperatives so that the ASMs should be easily identified, licensed and provided with technical and business training, and financial opportunities whenever it is feasible.