Misunderstandings have erupted among community members surrounding Chimwadzulu Hill in Ntcheu following government’s revocation of Nyala Mines Limited’s licence.
Nyala Mines Limited was granted a 10-year contract to mine rubies in the hill, and part of the agreement was for the company to fulfil its corporate social responsibility (CSR) which has been deemed as below the expectations both from government and surrounding communities.
Government has made it clear that it will not renew the company’s mining license, which expired on October 2 2017, saying the company has failed to give royalties as expected.
According to government, Nyala Mines has remitted less than K150 million over the 10 years it has been operational.
Chief mining engineer in the Ministry of Natural Resources, Energy and Mining Cassius Chiwambo, told The Nation in an interview that government decided not to renew the company’s license because the company said it was operating on losses.
“We also feel they have not been honest enough because for the 10 years they have been there, they have paid less than K150 million. If you can see the price of rubies on the Internet and what was paid to government, we feel as government we are not gaining anything. The rubies that have been exported are worth more than what the company claims,” he said.
A visit to Chimwadzulu Hill by The Nation crew and the Parliamentary Committee on Natural Resources and Climate Change revealed there is chaos in the mining area where people have now started mining illegally.
Ellias Mwechande from Muso 2 Village in the area said Malawi has precious minerals but the locals poor.
“After we started mining, we have realised that we were sitting on gold. The foreigners have been benefitting from our land. We are taking over. Just from the time we started mining, we have been able to cater for our needs from the proceeds. For example, I managed to buy fertiliser and some are even constructing their houses,” he said.
Although the locals refer to Nyala Mines Company owners as foreigners, its managing director, Abdul Mahomed, is a Malawian of Asian origin.
Mwachande says if Nyala Mines had employed the locals, it would have been better.
“But they employ people from other districts. We feel this is our hill and we have to benefit from it,” he said.
The illegal mining, which started after the license expired, has not spared women and children who are spending most of their time at the hill digging to find the precious stone.
Janet Chikafa, a mother of four who was found at the site, told The Nation that they are benefiting a lot.
“We are reclaiming our property and doing what will help us. We are tired of poverty. We want to work with government in this. Since we started mining, we have been able to sustain ourselves, even buying fertiliser,” she said.
Chikafa said the prices range from K20 000 to K1 million per stone. She said they sell to vendors located within the hill. Although The Nation spotted one of the vendors, he refused to grant an interview, saying he was just a concerned party.
Parliamentary committee chairperson Welani Chilenga said the chaos at Chimwadzulu have arisen because of the responsible ministry’s negligence.
Said Chilenga: “Now the communities are doing whatever they want, at the same time disturbing the mining activities. We need to get to the bottom of this.”
He further said their visit was a fact-finding mission, and he said the committee would come up with recommendations once they heard both sides of the story.
“We were told the company was paying royalties and has done a number of CSR activities, but we will come up with a final say on this once the investigations are done. Interestingly, the district commissioner does not know about this,” he said.
Nyala Mines project geologist Thomas Mussa Mbewe said it was not true that they were not remitting royalties.
He said the mining company provided all necessary documents to government to have their licence renewed.
Said Mbewe: “I would challenge them to produce evidence that we are not producing royalties. We have been producing monthly statements for the ministry on our operations. We export once or twice a year and the production is not of good quality.”
Appearing before the Parliamentary Committee on Natural Resources and Climate Change last week, Mahomed said government revoked their licence in 2013 and they have not been mining since then until the licence expired in October this year.
“We are ready for dialogue with the ministry and have our licence renewed,” he said.
He acknowledged giving government less than K150 million in royalties.
Malawi mining laws give the leadership of the country supreme powers on the activities of the mining sector.
Meanwhile, government has deployed six armed police officers to calm the situation at Chimwadzulu as they await interested investors.
According to Chiwambo, Nyala has a month to seek legal redress if they need their mining license to be renewed.