Malawians have unrealistic mining expectations-Globe Metals

Globe Metals and Mining, an African focused resources company, active in southern and east Africa, has accused Malawians of habouring unrealistic expectations from mining projects taking shape in the country.

The company, whose main mining activity is the Kanyika Niobium Project in Mzimba, has said their exploration work at Kanyika and other projects it is currently embarking on in the country could take seven to eight years before starting making profits hence no realistic for Malawians to expect social corporate responsibility now.

Apart from the Kanyika project in Mzimba, Globe Metals and Mining is also at the helm of Chiziro graphite project and Salambidwe Rare Earth Projects in Mahcinga.

“The people of Malawi need to understand better what mining involves. It’s not just opening a business and making money. What you need to understand is that companies like Globe will develop the project, we will not see any money coming from that investment for seven to eight years,” said Neville Huxum, Globe Metals and Mining Managing Director in an exclusive interview at the weekend.

Huxum said the company plans to spend about $500 million in all its mining activities in the country but said the fact remains that such an investment could only be recouped after seven to eight years.

“If I told you that I went to people in the rural areas and say you [the rural people] are going to plant here maize which you won’t see any harvest for five to seven years, there will not be interested. So we are planting and it will take a long time for the investment to realise.

“So you pump in huge money, money like $500 million which you don’t get any return for seven to eight years before the mine comes into production. So it’s a wrong expectation,” he added.

On social responsibility, Huxum said as long as Globe would start making profits from the mines, it would plough back to the communities in form of corporate social responsibility and not at present.

He said it was also imperative for all Malawians to beginning understanding how shareholders of mining companies work and their expectations adding that there is need for government and everybody to help educate the public on the right things about mining and not unrealistic expectations.

Commenting on the niobium project in Mzimba, Huxum said Globe is still waiting for samples which are being tested in China to come back adding that the company has so far spent $34 million in exploration activities of its four mining prospects.

He said the company is also still engaging government to have a full mining agreement on Kanyika mine.

The multi-commodity Kanyika project was earlier earmarked to start production of ferro-niobium in 2014, a key additive sophisticated steel.

Apart from niobium, Kanyika is believed to contain some other minerals such as uranium, tantalum and Zircon.

The Kanyika project is expected to last at least for 20 years and would employ 300 to 500 locals when production commences.