Govt set to roll out mining firm

Minister of Finance and Economic Affairs Sosten Gwengwe says Treasury plans to roll out a State-owned national mining firm next year, which needs about K5 billion seed capital to commence.

Ministry of Mining, which is spearheading the establishment of the National Mining Investment and Development Corporation, earlier this year submitted a funding request to the Ministry of Finance and Economic Affairs to consider an allocation of the seed capital.

In a written response on Tuesday, Gwengwe said the request is under consideration and the money will be allocated in the 2023/24 National Budget.

He said: “We believe mining can address a number of issues as the next budget will accommodate such.

“Suffice it to say the priority is the Mining Regulatory Authority and then the mining company, but we will accommodate this in the next budget.”

Ministry of Mining spokesperson Andrew Mkonda said despite waiting for allocation from Treasury, the ministry is exploring other alternative sources of finance.

He said: “The company will act as a catalyst for the mineral sector growth and development, but will also venture into other alternatives on the same.

“We continue to spearhead the establishment and operationalisation of a State-owned mining investment company, whose mandate shall be promotion of the optimal development of the mineral sector and maximisation of the nation mineral revenue and social benefits.”

Mkonda said the ministry is ready and will continue working on the project.

He said the firm will promote the local mining industry, contribute towards the country’s socio-economic development and also create job opportunities.

Said Mkonda: “The nation needs to be assured that the mining company will be established in the country. It may take time, but it will surely be established and once it is done, all testing of minerals will be done right here.

“No mineral samples will be sent outside the country for testing.”

Mining expert and former minister of Energy and Mining Grain Malunga has backed government’s intention to invest in a State mining firm, saying the initiative remains critical to enhancing development of the sector.

He said the State-owned mining firms have two strategic functions and one of which is to invest in strategic minerals that private firms are not interested in.

Said Malunga: “For example, the State can invest in industrial minerals, which are not high-value minerals, but are important in the growth of the local economy.”

Last year, President Lazarus Chakwera announced government’s plans to establish a national mining company to facilitate development of the sector, which is among government’s priority sectors for economic growth.

He said government wants to move away from tobacco as a major foreign exchange earner and mining is regarded as one of the potential industries that can replace tobacco, which has hitherto been contributing about 60 percent to the country’s foreign exchange earnings.

Meanwhile, growth in the mining sector has lately been on the decline from 7.4 percent in 2019 to 3.1 percent in 2020, according to the 2022 Malawi Government Annual Economic Report.

This year, growth for the sector is projected at 4.6 percent with the expectation that demand for quarry aggregate will increase.

In 2023, growth for the mining sector is projected at five percent with the expectation that mining and mineral exploration will continue to grow as more miners obtain exploration licences.