As Sovereign Metals progresses with the Kasiya Graphite Project, concerns emerge over whether Malawians will benefit or if foreign entities will dominate the gains.
With demand for graphite rising, particularly for battery production and refractories, the project holds significant investment potential. However, structural barriers could hinder local investor participation.
Investment analyst Stephen M’modzi observed that graphite is a crucial commodity in the modern economy, offering an opportunity for investment diversification. However, Malawi lacks the necessary investment mechanisms for local participation.
“Unfortunately, no firms or investment instruments exist on the local exchange for commodity companies like Sovereign Metals, potentially sidelining Malawians,” he said.
The analyst noted that Malawians can invest through international exchanges where Sovereign Metals is listed, with shares increasing from $0.48 to $0.80 in the past year.
For those unable to invest directly, exchange-traded funds (ETFs) and mutual funds could provide an alternative. However, the absence of local brokerage options remains a significant challenge.
Old Mutual financial education manager Bernard Chiluzi has previously advised investors to prioritise investments that yield returns exceeding the inflation rate.
With a share price increase exceeding 66.67 percent, Sovereign Metals shares are appreciating at more than twice the local inflation rate, currently at 28 percent, according to the Reserve Bank of Malawi.
Beyond investment opportunities, the broader concern is how Malawi can secure long-term economic benefits from the Kasiya Graphite Project.
“An independent, state-led investment vehicle is crucial for ensuring sustainable economic benefits,” the analyst advised. Processing graphite locally instead of exporting it in raw form could generate skilled jobs and spur industrial growth.
National Planning Commission director general Thomas Chataghalala Munthali has previously emphasised that local producers should prioritise value addition to maximise returns.
“We have several mining projects lined up, but they will not drive the growth envisioned in Malawi 2063 if we continue exporting raw materials. We must prioritise value addition and industrialisation to achieve middle-income status,” he said.
Global case studies highlight the importance of sound policies and strategic planning. As sustainability gains prominence, Malawi must align its education and economic policies with future industry trends.
“A significant economic transformation is possible—but only if we act strategically,” said M’modzi. “Malawi must ensure that both its people and businesses benefit, rather than just foreign investors.”
Collaboration among government, investors, and financial stakeholders is important to ensuring that the project becomes a genuine economic opportunity for Malawians.
With the right policies in place, Malawi has a chance to transform its mineral wealth into sustainable development, positioning itself as a key player in the global graphite supply chain.
