Lack of capital, expertise chocks coal industry

Players in the coal mining industry have bemoaned the lack of human and financial capital which would enable them to do further exploration drilling necessary for extending the life of mines.

The two main players, Kaziwiziwi and Mchenga coal mines in Rumphi, enjoy vast reserves of untapped coal, but a nexus of challenges is threatening their survival.

For instance, Mchenga is sitting on 4.5 million tonnes of untapped coal, while Kaziwiziwi, according to the mine’s finance and administration manager Eliphers Chunda, has between 20 and 30 million tonnes of untapped coal.

Mchenga mine manager Johnson Dandazi said in an interview that geological reports have been done to quantify and ascertain how much they need to extend the life of their mine, but the extension faces hitches due to limited resources.

“I would say the total resource is coming to 4.5 million tonnes, but for us to tap into those resources, we need capital to do more exploration drilling to extend the life of the mine.

“We need more investment, we need more capital, and for us to secure that capital is difficult at the moment. We are looking around for partners who can inject capital maybe in terms of foreign or local investment so that we can do further exploration and develop new mines,” explained Dandazi.

According to Dandazi, they require about $500 000 to do further exploration drilling and develop one mine.

“Banks are not giving us loans, and that is making life difficult,” he said.

While stating that his mine does not require partners who can inject capital for further exploration drilling, Kaziwiziwi Mine finance and administration manager Eliphers Chunda said on Thursday their major problem is lack of expertise.

“We have to import labour most of the time and our mine has most of the geologists and mine engineers from Germany. This is expensive, that is why we need more local engineers and geologists.

“Besides, we don’t have the equipment that could help us find seam deposits. Even when we want to buy some equipment, it is very expensive and our liquidity is getting tight due to the fluctuation of the kwacha,” said Chunda.

He also spoke of the high occurrences of seam discontinuities which greatly affect productivity.

Chunda also urged government to train more mine engineers and geologists that would be attracted to work in local mines, rather than the current scenario where most of them prefer working outside Malawi.

Minister of Natural Resources, Energy and Mining Bright Msaka said he is encouraged that the coal industry is going to endure for a long time. He called on players in the industry to work with government for mutual benefits.

“Government is not in the business of doing business, but we will create an enabling environment for investors to come and partner with the owners of Mchenga coal mine to make sure that their operations grow.

“We have been talking about issues of taxes to make sure that investors from other countries look at Malawi as a very attractive investment destination,” said Msaka.

Currently, cheap coal from Moatze and Tete in Mozambique is also threatening the survival of coal mining companiesin the country, as most local coal users prefer to import the mineral. n