EDF ventures into gemstones buying

Export Development Fund (EDF), a Reserve Bank of Malawi institution mandated to promote the growth and diversification of exports, has started buying rough gemstones from small-scale artisanal miners.

EDF precious metals and mineral unit manager Elyvin Nkhonjera confirmed the development yesterday, saying the structured market started in the first week of February.

She said the establishment of the structured market follows President Lazarus Chakwera’s announcement in 2021 on the need for government to participate in the mineral resources market.

Nkhonjera said while this seeks to boost foreign reserves by bringing the much needed foreign exchange, it will also help provide responsible markets for the locals.

She said: “We are providing a market to the local suppliers, who have for a long time, struggled with market access.

“So far, we are collecting the gemstones and we are also getting a lot of interests from the international market.”

Nkhonjera, however, said there is need for civic education to the locals so that they are able to differentiate between a gemstone from any others.

Gemstones, which include ruby, sapphire, aquamarine, tourmaline and rhodolite garnet are mined by small-scale miners across the country, but marketing them requires use of sophisticated techniques.

Speaking in an interview yesterday, mining industry commentator Grain Malunga said this may have a positive impact if it is meant to curb illegal buying and smuggling of gemstones.

He said: “EDF should realise that the price of gemstones is not fixed and, therefore, can lead to loss or gain of revenue.

“Professional integrity and expertise is of paramount importance.”

Natural Resources Justice Network chairperson Kossam Munthali observed that while this is a positive development, it is important to ensure that middle-men or intermediaries are flushed out of the system to ensure that economic gains get down to the local suppliers.

He said: “Malawians should be the ones selling these stones. This will add value to growth and improvement of livelihoods.

“The only positive thing is that at least, its EDF buying, but what needed to be done is for government to help how they can reach out to as many communities as possible as most people don’t know about the market.”

Currently, Ministry of Mining is fighting illegal mining of precious stones that has become rampant in the country.

Treasury figures show that during 2020/2021 financial year, 174 export permits were issued for 13 tonnes of gemstones valued at K92.1 million.

The gemstones were destined for China, Thailand, South Africa, France, United States of America, Canada and other European and Asian markets.

However, most of the gemstones were exported raw resulting in significant loss of earnings and only 2 700 carats (540 grammes) of value added gemstones was exported.

According to the data, known mineral deposits, reserves and grade for gemstones in Malawi are Mzimba, Nsanje, Chitipa, Chikwawa, Rumphi, Ntcheu, and creates 2 577 jobs.

EDF, under the RBM also acts as a structured market for gold, which as of November 2022, had procured 186.96 kilogrammes of gold at K9.4 billion.

An official from RBM said while the market is not an issue for gold, the central bank has earlier engaged their Zimbabwean counterparts on capacity building basis.

Last year, Chakwera announced plans to reform the country’s mining sector to boost the economy and crack down on rampant, illegal mining and mineral smuggling.

He said, if properly regulated, mining could play a major role in Malawi’s economy, currently one of the poorest in Africa.  n