A mining firm claiming a stake in a small granite mine in Chitipa is protesting government’s decision to cancel its licence, exposing how government is struggling to control the trade in minerals.
Illomba Granite owner has since accused government of forcing him out to allow another operator to take over.
The firm, which has been using the licence since1985, claims government wants to cancel its contract without justification.
But government has accused the miner of non-performance based on the terms of the licence, arguing Illomba Granite has demonstrated lack of capacity to develop the mine for close to three decades of operations.
The company, however, says government has no right to cancel the licence as the mine has lived up to its obligations and only stopped production in the last few years due to the plummeting prices of granite on the world market.
Illomba Granite further points at a court case in which it is suing G and Y Gemstone and Mining for alleged encroachment into its mine, claiming that G and Y, was encouraged into its actions by government.
In an interview, Illomba Granite managing director Faisal Hassan said government’s actions were suspicious.
“Government says they recently made a mistake when they indicated in their system that the site of the mine is not licensed. At the same time, government wants to cancel the licence. On the other hand, these G and Y Gemstone Centre and Mining guys have already gone to the site and started loading rocks, which we mined, into trucks.
“When we asked the people who were arrested [on the site] how they were going to export the granite, they indicated they had officials at the Department of Mining who would support them,” claimed Hassan.
Acting director of mines Akileni, Wona, in an interview said the department did not sanction G and Y’s presence at the disputed site, adding that the inclusion of the application of G and Y at the site was a technical mistake.
He argues that the department has already rejected the licence application of G and Y; hence Illomba remains the rightful licence holder.
Hassan further accused G and Y Gemstones of acting unprofessionally by encroaching on the site.
But in a letter by one of G and Y directors to the ministry, dated August 25 2017, the company is appealing the decision to reject its application number 0005 for Illomba Solidate Mine, saying they were assured that the concerned area was vacant.
“Our company, which is 100 percent owned by Malawians, first conducted a research on the concerned area, and we discovered that the place had been unoperational for more than a decade, which means government is not benefitting anything. Apart from our internal research, we sought advice from all relevant authorities, including your office before going ahead with the application.
“The Department of Geological Survey did the technical report and demarcation upon verifying that the place was vacant. We further came to your office, and you, together with your officer, confirmed after checking on the cadastre system, that the place was vacant,” reads G and Y’s letter in part.
The letter adds that Illomba only emerged when G and Y was about to start constructing a road from Chitipa to the mine.
“When we queried your office why this company was appearing all of a sudden in the cadastre system, your officer told us not to worry, saying their area was far from our interest area, and besides, they said his mining licence is for granite.
“By this time, we had already hired a consultant to do the Environmental Impact Assessment. We had sent one of our co-founder for training, deposited money for machinery and all these in preparation for the sodalite mine project. In short, we conclude that your office has been negligent, and your negligence has cost us a lot of money,” further reads the letter.
A history of the mine shows that before the current wrangles, Hassan fought a legal battle with Italian investors for control of the company for five years which went all the way to the High Court.
In 2013, the Department of Mining cancelled the contract, but the decision was rescinded after the Minister of Mines’ intervention.
According to a letter titled ‘Cancellation of Mining licence Number ML0019’, the then director of mining, Charles Kaphwiyo informs Illomba Granite that the decision to rescind the cancellation was made by the minister.
“Following the appeal you made in your letter on August 26 2013, requesting the Minister of Mining to rescind his decision to cancel your mining licence, I have been directed to inform you that the minister has rescinded the cancellation letter. We will be expecting you to submit a fresh programme of operations on how you are going to take advantage of improving markets and resume commercial production and shipment of solidate blocks to the different level. The programme of operations will be scrutinised by the Mineral Licensing Committee, who will make an appropriate to the Minister of Mining,” reads part of the letter.
But the department says it now wants to cancel Illomba Granite Mine’s licence because the company has failed to deliver on the requirement to reinvigorate the mine as requested by government when it rescinded the cancellation in 2014, according to a notice of cancellation we have seen, dated July 19 2017.
Government also argues that the company has further failed to comply ‘satisfactorily with the requirement of the Act and Regulations and conditions’ of its licence.
“The company has held the licence since August 4 1988 without any significant production and sale of minerals. For the last few years, there has been no activity at all on the licensed area. An attempt was made to cancel this licence in May 2013, but this was rescinded after you appealed.
However, the rescission was accepted on condition that you submit a “fresh programme of operations” for which you should have been held to abide. This has not been done. The company has not resumed operations to date, from April 2014, when you were given a second opportunity,” reads part of the letter signed by Secretary for Natural Resources Patrick Matanda.
But the company and its legal counsel, Kalekeni Kaphale in separate letters to the department argues against the decision.
In his letter, Kaphale argues that the company should be allowed more time as it has demonstrated that it is working towards attracting new investors in the mine.
In a letter dated August 13 2017, Hassan says when he travelled to Chitipa after G and Y allegedly invaded his site, G and Y officials, who were arrested by police at the site, told him they had been assured by the Department of Mines that they would be granted the licence.
“When I questioned their presence on our site, and the removal of our blocks, he told me that they had received permission from a Mr Hassan Mdala at the Department of Geological Surveys, as well as Mr Wona of Department of Mines. He claims that Mr Wona assured him that our licence had been revoked and that; therefore, the blocks lying on the site belonged to government,” reads part of the letter.
But Wona rejected in an interview assertions that he had signalled to G and Y Mining that it would be granted the licence and accuses the company of unprofessionalism.
“I am disappointed because not only have they found themselves in this issue of enchroachment, but after we rejected their licence, they have been making threats against our officers. One officer has had to report to police after he was given [threats] one day through phone calls. We don’t condone such actions,” said Wona.
Other mining officials, speaking on condition of anonymity, said government wants a serious investor to operate the mine.
“They have owned a mine for decades but don’t have finances to invest in it, they are acting as a broker for the mine—asking various investors to invest in their company while government doesn’t make any profit. This is why government wants the licence cancelled so that we can have serious investors,” said the source.
Granite is used in making things such as tiles. A random check on the Internet for world market prices indicates that a 100 square metre of granite can cost as much as $100 dollars or more.