As the mining sector is set to boom within three years starting from 2025, the government through the Ministry of Finance and Economic Affairs has assured the public that regulatory tools are ready to deal with exploitation.
In an interview, the Minister, Simplex Chithyola-Banda acknowledged the extraction sector’s exposure to exploitation forms like illicit financial flows and labour laws violations, among others, which could undermine the sector’s economic benefits.
He has, however, attributed exploitation in the mining sector to lack of oversight or regulations and expertise which give room for players to bypass the system and behave in a manner that only benefits its financial interests.
“To counter this, we are implementing transparent licensing processes, establishing legal frameworks that enforce fair partnerships, and strengthening institutional capacity through the Malawi Mining Authority.
“The involvement of the Malawi Development Corporation (MDC) ensures that every ton of mineral extracted is properly evaluated and accounted for, with benefits directly flowing into our economy,” Chithyola-Banda said.
According to Chithyola-Blanda, by developing robust mechanisms and hiring professionals in resource evaluation and management, there could be assurance of the minerals benefiting the nation.
“Mining revenues will now be tracked transparently, and contracts will prioritise local benefits,” he adds.
His remarks come at a time Lotus Resources Limited is set to restart Kayelekera Uranium Mine in the third-quarter this year, 10 years after its closure in 2014, marking the re-emergence of a large-scale mining activity in a decade.
The Chamber of Mines and Minerals coordinator Grain Malunga has since projected that the re-opening of Kayelekera will increase mining sector contribution to the country’s Gross Domestic Product (GDP) to 6 percent in 2025 from 0.7 percent in the past years.
“We expect the sector’s contribution to be between five and six percent in 2025 because of the anticipated reopening of Kayelekera uranium mine by Lotus in September and the expected opening of Kangankunde Rare Earth mine in Balaka by Lindian Resources.
“We also expect huge investment in construction of other mines by Mkango Resources at Songwe hills for rare earth project and Global Metals at Kanyika in Mzimba for niobium project, significant injections in the economy,” Malunga said.
Malunga, a geologist and mining consultant has, however, said while some targets to strengthen regulatory and local capacity are being met, a lot of work is outstanding, including installation of lab equipment at the Mines Department, adding that the online geological database is not functional.
In a separate interview on Tuesday, mining expert Ignatius Kamwanje said although some targets are dragging, there are signs that the sector is on track to achieve a long term target of 15 percent GDP contribution by 2030.
He said: “Mines and mineral regulatory framework and capacities for artisanal and small-scale miners have remained behind although training and guidance have been provided for artisanal small-scale miners.
“However, some efforts are there and with the proper approach to fast track regulatory framework, it is possible to deal with exploitation as the sector grows.”
In an earlier interview, newly-appointed Mines and Mineral Regulatory Authority director general Samuel Sakhuta said the authority will ensure policies are timely formulated without bureaucracy-induced delays from the ministry.
The chamber expects the sector’s GDP contribution to hit 12 percent in 2027 when three projects of Kayelekera Uranium Mine in Karonga by Lotus, Kanyika Niobium Mine in Mzimba by Global Metals and Kangankunde Rare Earth Project in Balaka by Lindian Resources will be in operation.
