Malawi’s industrial mining sector has been slow, lagging by nine years from the average lead time, published data shows.
According to S&P Global Market Intelligence 2023, globally, the average lead time from discovery to production for mining projects is 18 years while Malawi’s lead time currently averages 27 years.
The timeline includes geoscientific works, detailed exploration, feasibility assessments, environmental and social impact assessments as well as the negotiation of mining development agreements (MDAs) to extract and export mining products.
The slow growth, according to the World Bank, occurs during MDA negotiation and signing stage, with one project taking 12 years to complete.
Currently, Malawi Government signed MDAs with Mkango Resources to develop the Songwe Hill rare earths project, Lotus Resources to restart the Kayelekera Uranium Mine and Globe Metal & Mining for the Kanyika niobium project.
In its analysis of the mining sector, World Bank noted several factors could prevent Malawi from fully leveraging the potential of the mining sector to drive long-term growth and poverty reduction.
Reads the analysis in part: “In Malawi, limited institutional capacity, weak sectoral governance, and inadequate infrastructure pose especially serious risks.
“Unrealistically high stakeholder expectations regarding the mining sector’s impact on job creation, infrastructure improvements, and fiscal revenue pose challenges for policymakers.”
Malawi has eight energy transition minerals projects in the pipeline evaluated as potentially economically viable, including Kayelekera Uranium, Kasiya Rutile, Kangankunde Rare Earth Elements, Kanyika Niobium, Songwe Hills Rare Earth Elements, Makanjira Heavy Sands, and Malingunde Graphite.
However, the bank says production timelines for all eight projects are subject to uncertainty, with projection showing all eight sites could be in production by 2031 with the sector generating $30 billion in exports, with annual exports reaching $3 billion by 2034 and remaining broadly stable over the life of mines between 2026 to 2040.
Meanwhile, Minister of Finance and Economic Affairs Simplex Chithyola-Banda said last week that government is 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,” he said.
Mining, which is part of the agriculture, tourism and mining strategy, is touted to grow the economy in the short to medium-term for the country to achieve the lower middle-income status by 2030.
Currently, the sector contributes about one percent to the GDP, the broadest measure of economic growth.
