President Lazarus Chakwera has outlined his administration’s policy on mining to support government’s efforts to restructure the country’s largely agro-based economy.
Mining experts have since welcomed the President’s speech, saying it is long overdue.
In his speech delivered last night, Chakwera outlined how mining could transform the country’s economy and the steps his administration will take to push forward a vision of industrialisation in the country which he described as “mineral rich”.
Said Chakwera: “When the founders of Malawi said that ‘Chuma chiri m’nthaka’, it was assumed that this means our country’s only wealth is our fertile soil and its potential for crop production. We now know that this view is incorrect.
“We know that there is more wealth in our land than meets the eye, a wealth of untapped mineral capital. I stand before you today to say that the time has come to restructure our country’s monolithic agro-based economy.”
His speech focused on tackling the long-standing challenge of diversification of the agriculture-based economy by mooting the potential for the mining sector.
The major policy directions announced include the establishment of a mining authority to regulate the industry whose bill is expected to be introduced in the June sitting of Parliament; establishment of a new national mining company to implement business interests of the country’s mining sector, and the establishment of a gold market by the Reserve Bank of Malawi.
The President further announced he had instructed the police and mining authorities to work on stamping out the smuggling of minerals and pledged that his administration will ensure good governance in the mining sector for the country to fully benefit from the industry.
He said: “As a country, we have issued over 250 mining licences, but we still have no proper mining industry or returns to speak of.
“This cannot continue, because not only are unregulated mining activities a threat to our national security, but they perpetuate Africa’s legacy of allowing unscrupulous external traders to exploit our people.”
Chakwera also bemoaned how previous mining ventures such as the Kayelekera Uranium Mine in Karonga failed to benefit both the country and communities around it.
On the mining authority, the President said its mandate will include regulating the development, management, and utilisation of the country’s mineral resources in line with sustainable development principles and practices.
On the other hand, the national mining company, which will be a State-owned enterprise, will promote the development of the mining sector as a catalyst of private sector investment into the sector administering government’s equity interests in mining operations.
Chakwera said he believed the country’s mineral wealth could be used to transform the whole economy.
He said: “For example, our deposits of phosphate can be used to create a fertiliser production industry which will, in turn, add value to both our agriculture industry and our exports. Similarly, our deposits of heavy sands can be used to create glass manufacturing companies, which will in turn impact our infrastructure development.
“In other words, if we do the right things and do things right, our mining sector can transform every other sector we have and facilitate the creation of a New Malawi as envisioned in Malawi 2063, where mining is linked to industry under Pillar 2 of our national agenda.”
Meanwhile, mining experts have hailed the speech as exciting for the industry and the economy.
In an interview last night, mining expert Grain Malunga, who also served as energy and mining minister under the Bingu wa Mutharika administration, described the President’s speech as long overdue, saying the focus now should be on ensuring quick and efficient implementation.
He said: “If you have been following what I have been writing and saying, he has just endorsed what I have been trying to bring to my fellow citizens attention.
“It is good that at the highest level of government, we now have a vision on turning the mineral sector into a conduit for industrialisation and development. I hope the officers tasked with the responsibility of turning this vision into reality will take the President’s speech seriously.”
On his part, Chamber of Mines chairperson Burton Kachinjika said they are excited that the President has taken steps towards ensuring that the country benefits from its mineral resources.
“We would like the mining industry to grow. Mining becomes pivotal to development If you look at various countries such South Africa,” he said.
In his address to Parliament last June, Chakwera signalled his interest in the country’s mining industry when he revealed that data from rich gulf-States shows that Malawi was the source of large amounts of gold traded in those country.
“You may have heard it that Malawi is a poor country, but we must reject this lie,” he said.
“Surely my country, with $85 million in gold exported to the Middle East every year, is not poor. My country, with a freshwater lake and multiple rivers capable of generating $100 million a year in revenue, is not poor.”
Chakwera has since directed the Ministry of Finance to begin taking steps towards capitalising and operationalising the national mining company, which will operate under the Ministry of Mining.
The President further said government will complete the construction and equipping of a state-of-the-art laboratory complex in Lilongwe, estimated to cost K820 million, and deploy experts critical to the management of the sector.
As part of the operationalisation of RBM’s function as a structured market for minerals, the bank announced last week that it has started buying gold from artisanal miners as mandated by an Act of Parliament of 2018