Commission backs delay to conclude mining pacts

The National Planning Commission (NPC)has justified the delay to conclude Mining Development Agreements (MDAs), saying the process need not be rushed as it is critical to the future of the country’s mining sector. .

NPC communications specialist Thom Khanje, whose organisation is part of the negotiating team, said this in an interview on Tuesday following concerns from a mining expert and others that the delay to conclude MDAs could frustrate investors and derail the country’s  prospects of benefiting from the sector.

He said: “In the past, we have had agreements that some believe were not properly negotiated and, as a country, we learnt something. It is important to scrutinise the clauses and bargain for the best.

“While it might take time, I believe this is for the betterment of the country because it means some areas are being reviewed and it means informed decisions will be made for the betterment of the country.”

But in an interview on Tuesday, geologist and mining expert Grain Malunga warned that such delays are affecting investor confidence in the mining sector

He said: “MDAs negotiations are not being taken seriously looking at public pronouncements by those in charge.

“This has resulted in affected mining companies losing share values on the stock exchanges they are listed.

“Equity holders have also shown dissatisfaction on the way the government is delaying in giving final decisions on outstanding negotiations.”

Parliamentary Committee on Natural Resources and Climate Change chairperson Welani Chilenga said in an earlier interview that there is need for government to tread carefully before signing the MDAs.

He said: “It is always critical to ensure that all the issues are rectified before rushing to sign these agreements.

“Otherwise, as a committee, we have heard that some companies are making unrealistic demands.”

The comments come two years after Mkango Resources Limited completed the definitive feasibility study for rare earths at Songwe Hills in Phalombe which followed a technical report.

It also comes at a time  Lotus Resources Limited wants to start production at its Kayelekera Uranium Mine in Karonga after completing a positive restart study which demonstrated that the mine can support a viable long-term operation.

Currently, negotiations are underway to conclude MDAs for Mkango Resources Limited and Lotus Resources Limited, with the Ministry of Finance and Economic Affairs yet to conclude scrutinising key such as taxation, among others.

Ministry of Mining Principal Secretary Joseph Mkandawire is quoted as having said that there is need for the country to ensure that mining contracts protect the resources while ensuring gains for Malawians.

Mining is one of the key priorities of the government under the agriculture, mining and tourism (ATM) strategy to boost economic growth.