Malawi Mining Investment Company (Mamico) has established that the country loses potential revenue in excess of $700 million (K1.2 trillion) annually through gold smuggling.
The amount is equivalent to at least double what the country realises from tobacco, the main foreign exchange earner, annually.
Mamico’s month-long study has also established that there are 81 sites nationwide where gold mining activities are happening illegally, supported by foreign merchants who buy the mineral from artisanal small-scale miners.
The continued smuggling is happening at a time the Reserve Bank of Malawi (RBM) has only bought 540 kilogrammes (kg) gold valued at $70 million (about K123 billion) since 2023, a development mining experts attribute to rampant smuggling.
In an interview on Wednesday, Mamico chief executive officer Leonard Kalindekafe confirmed the findings of the study, saying gold can help to solve the country’s foreign exchange challenges.
When asked on the measures being done to ensure the country benefits from gold, which is mostly extracted informally, he said measures are being formulated, including making Mamico an active gold buyer in the country.
“We conducted the study to track where gold mining activities are taking place and we are now determined to be strongly involved in gold procurement once we get the necessary funds,” he said.
Kalindekafe said Mamico will open spots where it will be buying gold at competitive prices to ensure that the locals have designated markets to sell at their convenient time.
In an interview, geoscience expert in minerals, mining and metals Ignatius Kamwanje said the informal gold mining and trading has been worsened due to increasing participation of foreigners, observing that there is a need to formalise the market.
He said: “Gold mining in Malawi is mostly informal and small-scale so the miners sell to foreign merchants from neighbouring countries who smuggle it out.
“What these merchants are doing is moving the gold from Malawi to the markets where prices are higher.”
In a seperate interview, geologist Paul Mvula applauded the formal gold buying initiative, but said RBM could have bought more if illegal mining was curbed.
“It is an area that we are losing a lot. 540 kilogrammes is good, but we could have bought more if we curbed illegal mining,” he said.
Mining and Minerals Regulatory Authority director general Samuel Sakhuta is quoted by The Nation as having said that they are struggling to curb illegal mining as it is a complex matter, especially because some miners shun licences.
But he said if miners can have licences, they would be selling the gold to established markets, which will make it easier for authorities to track proceeds and maximise returns for the country.
“Without that, we can’t know. Most of the [illegal] miners found at the sites are just workers. There are big people behind them that hide. But there is government, no matter how long it might take, they will be caught,” said Sakhuta.
Mamico is expected to take over the gold buying responsibility from RBM apart from its other mandates, including being a local vehicle for high-value mining investments.
Malawi 2063 (MW2063), the country’s long-term development plan, has identified mining as the fastest route to achieve targets in the strategy’s MW2063 First 10-Year Implementation Plan.
Mining contributes roughly one percent to the country’s gross domestic product although experts believe the contribution will grow following the restart of Kayerekera Uranium Mine in Karonga and progress attained in various mining projects.
