Malawi revewing mining Act: Mining firms, public to sign development pacts

  • Communities should see meaningful impact of mining—Muluzi

Malawi in an effort to quell the conflict between mining firms and the community, has made an undertaking to ensure there are community development agreements (CDAs) entered into by the two sides before mining activity starts.

Mchenga_mineThis is one of the critical issues contained in the draft Mines and Mineral Act, which will be presented to interested mining stakeholders next week for discussions and fine-tuning before it is presented to Parliament for deliberations and approval.

Malawi is currently using the archaic mining legislation promulgated in 1981, which is not in tune with the current trends and does not respond to emerging issues in the infant mining sector, which currently contributes about seven percent to the gross domestic product (GDP).

Minister of Natural Resources, Energy and Mining Atupele Muluzi, in an interview on the sidelines of a visit to Geological Survey Department (GSD) in Zomba on Wednesday, said there has always been misunderstandings between mining firms and communities on a number of issues, particularly on corporate social responsibility projects.

“We have made sure that there are community development agreements within the mining law so that communities see the real meaningful impact of mining activities to transform their lives.

“These agreements will ensure that the interests of the investors as well as the communities are protected for the benefit of the economy,” he said.

Muluzi said there have always been “unrealistic expectations” from the public on mining companies because the agreements the companies sign with government have always not been transparent.

To this end, he said Malawi will subscribe to the Extractive Industries Transparency Initiative (EITI) by June this year to ensure that all mining agreements that government enters into.

“We are in the process of ensuring that we successfully implement the EITI accreditation by June this year to open up the mining sector.”

EITI is a global transparency standard for improving governance of natural resources to promote open and accountable management of resources. The initiative seeks to strengthen government and company systems, inform public debate and enhance trust in each implementing country and is supported by a coalition of companies and civil society organisations working together.

Without necessarily spelling out at what stage mining companies should engage in corporate social responsibility projects, Rafiq Hajat, a mining analyst, said yesterday that after government has signed a mining agreement, there is need that in the CDAs, there should be a provision that a percentage of royalty on exports should be paid directly into a properly constituted community trust fund.

“The usage of the money should be determined by the communities themselves. This will ensure that the communities are empowered rather than relying on the big brother government,” he said.

Mining has been identified as one of the country’s growth sectors and government wants it to contribute about 20 percent to GDP by 2024.

Earlier, Citizens for Justice executive director Reinford Mwangonde said the review of the Act will ensure that mining companies do not easily get away with unscrupulous activities due to the archaic law.



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