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Mining will revive Malawi’s economy says Minister

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Malawi’s Minister of Mining Hon. Minister Monica Chang’anamuno in her office with a copy of WhyAfrica’s magazine next to her during our visit in August 2023. Image credit: Leon Louw for WhyAfrica

Mining will revive Malawi’s economy says Minister

Although Malawi’s Minister of Mining Hon. Minister Monica Chang’anamuno is still new in her position, she is facing a deluge of challenges head on, and mining makes her excited, she tells me in an hour-long interview in August when we paid her a visit during the recent WhyAfrica Road Trip through Namibia, Zambia, Angola, Malawi, Botswana and South Africa.        

By Leon Louw owner of WhyAfrica and editor of the WhyAfrica magazine

It is a humid spring morning in August when I walk into the office of Minister Chang’anamuno on the third floor of Government Building in Lilongwe, the capital city of Malawi.

Outside, more and more vehicles join the snaking queue of drivers eagerly awaiting the arrival of fuel at the pump station across the road.

WhyAfrica’s finds itself amid a fuel crisis in Malawi as the shortage of foreign currency starts affecting the landlocked country’s faltering economy. My mind involuntarily takes me back to a time when the people of Zimbabwe experienced similar challenges in the late 90s and early 2000s.

Nonetheless, this is Malawi, not Zimbabwe. It’s 2023, and the country is forging ahead with modernising and rebuilding its economy after suffering debilitating setbacks over the last few years.

The Government of President Dr Lazarus McCarthy Chakwera has identified agriculture, tourism, and mining (ATM) as the sectors critical to Malawi’s revival.  In February this year President Dr. Lazarus McCarthy Chakwera appointed Minister Chang’anamuno, as the first female Minister of Mining in Malawi, to steer the sector into the right direction.

The mining portfolio is new to Minister Chang’anamuno, having served as Deputy Minister of Education previously.

Even if it has not been an easy journey since her appointment, Minister Chang’anamuno is confident and has settled in her new role very quickly. The hardest part of it all, she admits, is to manage the expectations of so many stakeholders.

“When people hear “mining” they expect immediate benefits. So, for us to continuously emphasise the importance of mining to turn the economy around, is a bit of a double-edged sword, as people think their situation will change overnight,” she says as the traffic outside slowly starts moving again.

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Mining is not a poisoned chalice (Mining will revive Malawi’s economy says Minister)

Minister Chang’anamuno shrugs off my insinuations that she was handed a poisoned chalice with a big smile. Before the morning of our interview, the Minister had to field questions from concerned investors about new changes to Malawi’s mining regulations for a few days, and she surely expected that it would be one of my first questions.

“I can assure you that investors do not have to be concerned about changes to the mining regulations. The changes include the establishment of a new regulatory body that will work very closely with the Ministry of Mines. In addition, we are in the process of establishing a state mining company that will form partnerships with exploration and mining companies in Malawi,” says Minister Chang’anamuno.

I re-focus my discussion and questions on possible opportunities for mining companies, as well as challenges Minister Chang’anamuno will be up against. One of them, and something very close to her heart, is the plight of illegal miners, and especially women caught up in the informal mining sector.

“We have a lot of challenges in Malawi. Illegal mining is one of them and we are finding solutions to this problem. We are aware that most of the illegal mining involves communities and especially women in remote villages. We are encouraging these people to apply for official small scale mining licenses with the government. In this way we want to make sure that they have access to formal markets so that they can sell their commodities legally. When they are mining illegally, they are selling their products to illegal buyers, and that is not helping us to develop Malawi’s economy. We want to prevent that from happening.

“But challenges aside, there are many opportunities for investors in Malawi, especially for exploration companies. Malawi’s resource base is diverse, but we need further geological work to be done to truly understand what exactly we have in the ground, we need to be 100% sure of we’re looking at,” says Minister Chang’anamuno.

An Exploration License (EL) in Malawi is issued for three years, with allowable two-term extensions over an area not exceeding 2500km2 while a Reconnaissance License (RL) is issued for one year over an area not exceeding 100,000km2. Other licenses to consider in Malawi are Medium-Scale Mining Licenses (MML) and Large-Scale Mining Licences (LML), issued for not more than 25 years with allowable term extensions, and Licenses for Artisanal and Small-Scale Mining (ASM) – Artisanal Mining Permit, Reserved Minerals Licence (RML), Non-Exclusive Prospecting Licenses (NEPL), Small-Scale Mining License (SML).

Currently license applications are handled by the Ministry of Mining, but to expediate the process the Mining Regulatory Authority will manage all the applications in future.

Opportunities for investors in Malawi (Mining will revive Malawi’s economy says Minister)

So what other opportunities are there for investors in Malawi?

“What many people don’t know is that we have licenses for oil and gas exploration available. Early exploration work has already been done in six blocks in Lake Malawi. “Being on the rift valley gives us hope that there could be some oil and gas deposits.

Kenya, Tanzania, and Mozambique have made significant discoveries recently. All the preliminary exploration in Malawi has been positive. But because of Covid-19 the companies that came to do this work couldn’t complete their projects as they encountered financial difficulties. But we have the results in our custody and will make it available to any investor interested in oil and gas,” says Minister Chang’anamuno.

There was an outcry by onshore communities and civil society groups recently about possible exploration for oil and gas and other development projects in this unique and sensitive freshwater lake. And perhaps it is something that must be put on the backburner. The lake is a natural wonder and alternative activities might be more sustainable, but that is a decision better left to the people of Malawi.

Recent studies suggest that Malawi has high potential for discovery of petroleum (crude oil and natural gas). On average, crude oil contains about 84% carbon; 14% hydrogen; 1 to 3% sulphur; and less than 1% of nitrogen, oxygen, metals, and salts. Potential areas have been identified as thick sediments in Lake Malawi, Chitipa, Vwaza, Mangochi –Phalombe Area and the Shire Valley. The host rocks could be sandstone and carbonate rocks.

Structural analysis of the Lake has also proved sedimentary basins in Karonga, Nkhata Bay and Nkhota Kota. Geoscientists have called these basins as Karonga, Usisya, Mbamba, Bandawe, Matengula and Mtakataka respectively. The thickness of the sediments is over 4000 metres, well above oil forming window.

 

 

Exploration and energy needed (Mining will revive Malawi’s economy says Minister)

Minister Chang’anamuno interrupts my thoughts and returns the conversation to solid mineral deposits and energy in Malawi.

“We have several mineral deposits that is worth pursuing and we need to invest heavily in the energy sector, so there are many opportunities available here. The energy sector goes hand in hand with manufacturing and if we want to develop more industries, we obviously need an efficient energy sector. Currently Malawi relies on one hydro-power station to generate all the country’s electricity.

“Furthermore, we have good deposits of iron ore and uranium, as well as reasonable coal deposits in the north of the country, which is in fact being mined, but not to its full potential. There are excellent Rare Earth Element (REE) projects in the south of the country, and this makes me very excited. In addition, we have the largest rutile deposit in the world (in which mining giant Rio Tinto has bought into), and great graphite prospects.”

Minister Chang’anamuno optimism is contagious. The morning noise of rush hour has died down and I start wondering if the long queue of cars in the main road are still waiting for the fuel trucks to arrive.

Minister Chang’anamuno is not the only one that is excited about Malawi’s mineral riches. International companies like Lindian Resources, Global Metals, Mkango Resources and Sovereign Metals are already heavily invested in Malawi.

Moreover, a long list of exploration companies from Australia, Canada, India, China, the UK, and South Africa are on the way to do early exploration work on various projects.

Minister Chang’anamuno has criss-crossed the globe over the last few months to make Malawi ‘s case, and her efforts seemed to have paid off. Malawi, often called the “Warm heart of Africa”, and its mining sector are in good hands, is my last thought as I walk down the corridor towards the front door and back into the street. In front of me the queue of cars now snake around the corner for more than five blocks. Maybe there’s fuel tomorrow, or the day after, but it will eventually arrive.

Despite its many challenges, Malawi dances to its own rhythm. This is not Zimbabwe in 2000, this is Malawi in 2023, and here everything revolves around the ancient, life-giving freshwater lake that covers most of the country’s undulating surface. If the fishing is good, life is good, the beat goes on late into the night, and nothing else matters. I rest my case on the way back to this magnificent natural wonder of the world and the warm people guarding its shores.

Mining will revive Malawi’s economy says Minister

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Mining will revive Malawi’s economy says Minister

 

 

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