Mining of rubies and sapphires at Chimwadzulu Hills in Ntcheu is yet to start nine months after a new company took over from Nyala Mines, it has been established.
The Malawi Government awarded the Chimwadzulu Corundum Licence to Mwalawanga Mining Limited in January this year.
Although not fully operational, the new investors said they pump in K7.8 million monthly, a development one of the firm’s shareholders, Ishmael Wadi, has described as a loss.
In an interview, he said the previous miner has not yet decommissioned from the hills.
Government opted for Mwalawanga after rejecting Nyala Mine’s extension of its 10-year mining licence.
Nyala Mines fell out of favour with government after it delayed to apply for an extension of the licence, among other reasons.
The Malawi Government signed a development agreement with the firm, which among others, granted locals 30 percent participation in the mine while it got 10 percent royalty of the gross value of corundum exported, according to the Department of Mines.
Nyala Mine’s was also exempted from resource rent tax, value added tax on capital purchases, import duty on materials, equipment and consumables for use in mining and processing of minerals.
Following disagreements with Nyala Mine’s, government awarded a licence to a consortium of Malawians trading under Mwalawanga Mining Limited in January this year.
But since then, the mine is not fully operational.
In an interview, Mines Department director Jalf Salima said the company has not yet submitted an Environmental Impact Assessment to Environmental Affairs Department for approval.
He said since the new company took over, there has been no mining development agreement negotiations.
But Wadi said their firm is mining at a minimal scale.
“It is hard for us to operate fully because the previous company is still occupying the staff quarters and it is difficult to have our experts on the site,” he said.
Wadi said the firm is also failing to conduct full geological mapping because it does not have full control of the mine.
“It is difficult to even conduct an Environmental Impact Assessment because of the same reasons. The only difficult thing is that there has been no complete handover,” he said.
Wadi said thus far, the firm has employed 60 people from the surrounding communities.
“We will speed up things after a complete handover. Currently, we are not yielding anything,” he said.
Mining contribution to gross domestic product (GDP) is less than two percent after the closure of Kayelekera Uranium Mine in Karonga in 2014.