Malawi mulls listing Mining firms on mse

Malawian investors stand a chance to have stake in large-scale mining firms through listing on the Malawi Stock Exchange (MSE), a situation that could create wealth for the locals.

A letter Business Review has seen dated May 10 2024 signed by Minister of Mining Monica Chang’anamuno addressed to Minority Shareholders Association of Listed Companies confirms that the aspect of Initial Public Offering (IPO) on the MSE is being given priority.

She said: “I wish to indicate that meanwhile government is negotiating mining development agreements [MDAs] with some companies and the aspect of IPO is being considered strongly.”

The government’s stance follows a letter to the ministry by the association on January 25 2024 proposing partial ownership in large-scale mining firms and how indigenous citizens can mobilise funds through MSE and provide necessary capital to the mining firms.

The Government of Malawi, in collaboration with stakeholders, is overseeing several mining projects for rare earths, graphite and uranium, which enjoy high global demand due to their application in emerging green technologies.

According to Treasury, extensive mineral reserve estimates indicate significant long-term production potential at medium and large-scale.

Feasibility studies are underway for some projects, while MDAs are being negotiated with investors.

Treasury confirms that, through the Ministry of Mining, government has finalised and signed an MDA for niobium production at the Kanyika Niobium Mine in Mzimba with Globe Metals and Mining Limited, an Australian Stock Exchange-listed company incorporated in Malawi and expected to start production in 2025.

Among others, the agreement provides for 10 percent free equity (fully paid shares) for the Government of Malawi and an option to acquire another 10 percent by financing.

Lotus Resources has also negotiated a Community Development Agreement with the Kayerekera community and is in the process of finalising a revised MDA with the Government of Malawi.

Lotus Resources has undertaken technical work to facilitate the re-opening of the mine which was placed on care and maintenance.

Exploration works at Kangankunde Hill in Balaka is showing potential for rare earth oxide, according the ASX-listed Lindian Resources.

In an interview on Tuesday, MSE chief executive officer John Kamanga said most mining firms come with an application of tax holiday, which is a foregone income to Malawians; hence, listing on the 16-counter local bourse could be a big consolidation.

“If Malawians have forgone that income, let them also be part and parcel of fortunes the mining companies create and be able to realise results in terms of job creation and  wealth creation to the public,” he said.

Kamanga said while this is new in Malawi’s mining industry, the “nationalisation of industries” is there in Zimbabwe and Zambia. 

“Within the telecoms industry, its already applicable where a foreign investor is supposed to relinquish 20 percent to the public as is the case of Airtel Malawi plc,” he said.

Minority Shareholders Association of Listed Companies secretary general Frank Harawa said while the listing will help create financing vehicles for the firms, it will be an opportunity for Malawians to create wealth.

“This has been the missing link in Malawi where there have been no proper agreement between mining firms and the natives,” he said.

Country manager of Lancaster Exploration Limited of Mkango Resources Burton Kachinjika welcomed the idea to  list on MSE.

“If an individual has money to invest why not. It is a great thing,” he said..