Export Development Fund (EDF), a development finance institution with a particular focus on exports, has said it wants local investors to seize opportunities in the mining sector.
In an interview in Lilongwe this week, EDF chief executive officer Rodrick Wiyo said Malawians will now be given an opportunity to own and manage mining ventures.
He observed that Malawians look at mining as a risky business and only ideal for foreigners.
Said Wiyo: “The reason is that these [mining] projects have not been de-risked. De-risking of a project is achievable when a bankable feasibility study is done. Secondly, Malawians are generally short-term investors that do not want to put their money for longer periods.
“Thirdly, Malawians generally do not want to do joint ventures. They would rather go it alone and this is compounded by the secrecy surrounding small-scale mining ventures in the country.”
He said the new approach will give Malawians an avenue and an opportunity to own and manage mining ventures in the country.
The second approach will be to de-risk the mining projects as outlined in the 2016 Malawian Investment Projects Compendium.
“This may involve creation of an appropriate investment structure that interested Malawians can bring in equity capital. This vehicle will then engage the foreign investors for collaboration.
“Discussions with various stakeholders have already started to ensure that current mining investment opportunities are explored. We are working with the ministries of Natural Resources, Energy and Industry, Trade and Tourism as well as the Reserve Bank of Malawi [RBM],” said Wiyo.
RBM has been roped in because increased export generation will ensure continued stability of the local currency.
Figures from the Malawi Government Annual Economic Report 2017 show that the mining sector has potential to raise about $2 billion (K1.4 trillion) annually.
RBM spokesperson Mbane Ngwira confirmed that there are negotiations pertaining to the mining sector and that the central bank’s role is to ensure that the country has enough foreign exchange reserves.
“At the moment, I cannot say whether a body has been set up to look at issues in the sector, but as RBM, we discuss with various ministries and government departments on how we can have enough reserves without going out of our mandate. What we always try to do is to see that sufficient foreign exchange reserves continue to be generated,” he said.
Some of the four potential mines considered for investments are Kanyika Niobium Project in Mzimba, Makanjira Heavy Mineral Sands project in Mangochi, Malingunde Graphite Project in Lilongwe and Mkango Resources Mining project in the Phalombe, according to the projects compendium. n