Power thwarts mining growth
Power deficit stands in the way of Malawi’s aspirations to see the mining sector’s contribution to the economy grow from about one percent to 10 percent by 2030.
But the Ministry of Mining is upbeat and says the sector’s gradual growth is no lost hope.
Mining alongside agriculture and tourism form the Malawi Government’s ATM strategy expected to drive economic growth.
The current mining development projects in the pipeline require at least 230 megawatts (MW) of electricity, according to Presidential Delivery Unit head Janet Banda. The deficit represents about 40 percent of the current power output.
She said: “This means that Malawi needs to prepare well with adequate electricity to make mining tick.
“We cannot emphasise enough the key role that electricity will play to unlock the mining industry.”
Ministry of Mining Principal Secretary Joseph Mkandawire said in an interview on Tuesday that there are efforts already underway to alleviate the power challenge that could affect mining projects as the country addresses the power deficit.
He said one of the approaches adopted is to address the problem project-by-project with alternative power sources.
Said Mkandawire: “We have been discussing with our colleagues at the Ministry of Energy and there are a number of measures.
“For example, in Makanjira where there is a project to mine heavy mineral sand, the company has signed an agreement with Puma Energy to provide fuel.”
He said the amount of power required to support the mining development is huge and cannot be addressed at once, as such, each project will have its own measures.
Ministry of Energy public relations officer Austin Theu acknowledged the power deficit, but fell short of providing an update on the current efforts to increase power output by one gigawatt by 2025. He asked for more time.
Several mining projects are constrained in progress due to the power deficit as running costs with diesel power weigh heavily on profitability, according to mining experts.
Lotus Resources remains optimistic to get grid power connection at its Kayelekera Uranium Mine in Karonga District, saying negotiations are ongoing with authorities.
The firm targets to reopen the mine in 2025, but subject to timely conclusion of the negotiations, according to one of its investor updates.
Reads the firm’s quarterly update: “A power implementation agreement along with the power supply agreement with the Escom [Electricity Supply Corporation of Malawi] will facilitate the connection of the Kayelekera site to the Malawi national grid and allow the company access to lower cost power, a critical component of the reduced operating costs reported in the restart feasibility study.”
Previous operators of Kayelekera Uranium Mine, Paladin (Africa) Limited, used heavy duty diesel generators as a source of power.
In 2017, the Malawi Government granted a mining licence to a Chinese mining firm Mawei following exploration works that started around 2009, discovering the presence of 354 million tonnes of ore containing the minerals that include ilmenite, magnetite, zircon, rutile and monazite.
However, the power requirement of three megawatts, at the Kayelekera Mine is located 50 kilometres away from the substation in Karonga. The firm said as part of this process, its consultants commenced the community engagement process.
According to Ministry of Energy data, Malawi has installed electricity capacity of 398.39MW and out of this, 390.15MW is produced by Electricity Generation Company while 8.2MW is produced by Mulanje Hydro.
Currently, the JCM power plant provides about 60 MW of solar power.
The Malawi Government is in a race against time to increase electricity generation to about 1 000MW by 2025 at a time National Statistical Office data shows that 17.7 million people lack access to the national grid.
The mining sector’s contribution to the economy has been hovering at around one percent, but in 2010, its contribution to the economy peaked at 10 percent when Kayelekera Mine was in full swing.
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