Government has moved a step forward in its effort to recover $309.6 billion (over K541 trillion) in unpaid taxes and royalties for minerals believed to have been smuggled from Malawi by a US-based company.
A US district court for the Western District of Washington at Tacoma has granted Malawi a nod to proceed with criminal litigation against Columbia Gem House (CGH), a Washington-based supplier and wholesaler of exotic gemstones accused of using its Malawi-based subsidiary, Nyala Mines, to exploit minerals and ship them to the mother company in the US.
In the matter, Malawi Government outsourced the services of a New York-based legal firm, Seiden Law.
In a written response to a questionnaire, senior associate for Seiden Law, MarcAnthony Bonanno, confirmed that his law firm was representing the Malawi Government against CGH.
He said: “We can confirm that my firm [Seiden Law] represents the Republic of Malawi in the case. But due to several judicial limitations, we are unable to comment at this time.”
In July 2022, Attorney General (AG) Thabo Chakaka- Nyirenda filed a demand letter to CGH, claiming that Nyala Mines, which had been extracting rubies from Chimwadzulu Hill Mine in Ntcheu and exporting to the US was a subsidiary of CGH, hence his action.
But in August 2022, CGH brand manager Natasha Braunwart, speaking to a New York-based online publication, Law360, said her company did not own Nyala Mines Limited or any other entity in Malawi.
This compelled the AG to file an ex-parte application to the US court in April last year for an order to obtain information from CGH for use in contemplated criminal and civil proceedings stemming from its investigation into the Chimwadzulu Mine.
The AG, through the American lawyers, wanted the information to help the country establish the exact quantities and quality of gemstones mined, exported and sold by Nyala Mines between 2004 and 2020.
Further, the AG sought to ascertain whether CGH is or was the parent company of Nyala Mines as government contended the firm had an exclusive agreement with Nyala Mines to sort, cut, and market sapphires and rubies from Chimwadzulu Mine.
On May 23 2025, United States District Judge David G. Estudillo found that the AG’s application had merit and authorised Malawi to issue and serve a subpoena for the production of documents on CGH.
Further, the judge authorised Malawi to issue and serve a subpoena for deposition testimony from a corporate designee from CGH and its founder and owner, Eric Braunwart.
Reads the order signed by Estudillo: “Until further order by this court, CGH shall preserve all documents and evidence, electronic or otherwise, in its possession, custody, or control that contain information potentially relevant to the subject matter of Malawi’s document requests, as set forth in the document subpoena. CGH shall not file any documents produced in response to the subpoena with this court absent leave of the court.”
Ministry of Justice spokesperson Frank Namangale, on behalf of the Attorney General, said they have no comment on the matter for now.
But the AG told our sister newspaper The Nation on August 5 2022, that his letter to CGH, which is a family-owned business, clearly explained how the firm owns companies by creating shell companies with the aim of evading the payment of application taxes.
The AG further said his letter explained the involvement of CGH, including the use of trade mispricing and improper transfer techniques.
“Also, they created front or shell companies to evade the payment of applicable taxes in Malawi,” the paper quoted the AG.
Mining is identified in Malawi’s long-term development blueprint- MW2063, as one of the key strategic sectors with potential to support industrialisation.
In 2025 and 2026, the sector is expected to grow by 5.6 percent and 8.5 percent, respectively, from 4.8 percent last year.
According to published online information, besides rubies and sapphire, other gemstones currently being mined in the country include chalcedony, apatite, aquamarine, amethyst, citrine, garnet, jade, tourmaline, sunstone, sodalite and rose quartz.
In its 20th Malawi Economic Monitor [MEM], the World Bank says Malawi has a unique opportunity to leverage its mineral wealth to drive sustainable economic development.
Published on the World Bank website on January 29 2025, the publication projects that Malawi’s mining sector could generate up to $30 billion in exports between 2026 and 2040.
