Human Rights Defenders Coalition (HRDC) has demanded an investigation into mining deals in the country amid revelations that 72 mining licences are at risk of cancellation for non-performance.
A confidential government report in possession of HRDC, which we have seen, shows that Malawi has 72 firms given exploration and mining licences but were not doing much.
The report is based on an assessment government carried out in September to establish which licence holders were active or not.
Reads the report in part: “A total of 199 licences comprising 118 exploration licences [EL], 77 mining licences [ML] and four petroleum exploration licences [PEL] were assessed. “Out of these licences, 49 exploration and 23 mining licences were classified as non-performing.”
The revelation is part of HRDC’s whistle-blowing initiative.
In a letter dated October 28 2020 addressed to Anti-Corruption Bureau (ACB) director general Reyneck Matemba, HRDC is raising questions on how government issued about 200 exploration and mining licences yet the same does not translate into improved revenue for the public purse.
In an interview on Wednesday, HRDC chairperson Gift Trapence wondered why government was maintaining the licencees despite not performing.
He said his organisation’s analysis of information showed that “there is a cartel that controls the mining sector to their benefit”.
Said Trapence: “We need an investigation on this matter because if you look at how much Malawi makes out of these deals, you are left with so many questions: Why should more licences be issued when some are dormant? We doubt this is true?”
Malawi is home to various minerals, including graphite, gemstone, uranium, coal, gas and oil.
The 2020 Malawi Government Annual Economic Report indicated that between July 2019 and April 2020 the public purse earned K450 million through royalties, licence processing and annual ground rent. But HRDC said the revenue was on the lower side.
During his maiden State of the Nation Address delivered in Parliament on September 4, President Lazarus Chakwera indicated that gold was being exported from Malawi to the Middle East without benefitting Malawians.
The President said: “You may have heard it said that Malawi is a poor country, but we must reject this lie. Surely, my country, with 85 million dollars in gold exported to the Middle East every year, is not poor”.
HRDC has also raised alarm on how government has treated a graphite mining company whose licence was twice cancelled and renewed.
Illomba Granite Company Limited had its licence withdrawn on June 10 2013 and in 2017.
The Extractive Industry Transparency Initiative (EITI)2016/17 Report acknowledges Malawi’s challenges in the distribution of benefits and licence awards “particularly related to the oil exploration around Lake Malawi. Malawi is implementing the EITI to build trust amongst stakeholders in the mining, oil and gas sectors”.