Malawi losing millions of dollars from illegal mining

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By Penelope Paliani-Kamanga

Lilongwe - Malawi is losing millions of dollars from revenue it could have generated from its diverse mineral resource base through illegal mining by foreigners who have taken advantage of the absence of a legal framework to manage a modern mining industry.

This has been so because the Malawi government is delaying having a revised Mines and Minerals Act in place.

At the moment, the country is still using the Mines and Minerals Act (1981) which is an archaic legislation that was enacted during the one party regime, and vests the control of the country’s resources in the Life President on behalf of the people.

The revised law, when adopted, will put the power to control the resources in the hands of the state on behalf of the people of Malawi.

Stakeholders in the extractive industry believe adoption of the revised law is the only tool that will collectively address a myriad of problems that have arisen in the sector.

Government failure to address a number of problems, including loss of revenue due to smuggling of minerals, unregulated artisanal and small scale mining activities has pushed locals to take the law into their hands by blocking would-be illegal miners from smuggling the precious stone out of Malawi.

A recent incident in Chitipa on the northern tip of Malawi saw communities at Mbirima in the district blocking a Chinese mining firm from collecting mineral samples.

The traditional leaders in the area said the company had been collecting the “samples” in large volumes of at least seven trucks full of the minerals for the past three months.

“They are actually hiding behind samples when in actual fact they were actually mining without a proper licence and committing themselves to the corporate social responsibility,” said one chief.

Residents of Mzimba have also expressed concern that Chinese miners were duping them of minerals being mined in the district.

They claimed that they were losing out on a number of minerals such as rose quartz, rock crystal quartz, smoky quartz and mica.

Investigations in the district have shown that Chinese have been going to different parts of the district as buyers of precious stones but within a few months, they start mining.

The residents said the Chinese claimed they were into joint ventures with local firms.

Some residents say the Chinese use Malawians to get licences and leave them in the cold once they get authorisation.

Levison Nkhata, one of the leaders in the area, told Malawi News that members of the community were surprised to notice the influx of Chinese in the area and later on they discovered that they were interested in the white and smoky quartz.

This prompted them to report to traditional leaders who seemed unconcerned and played a blind eye.

Economic Justice Coordinator for NCA, Thokozani Mapemba, said it was imperative that the country had to enact the revised law as soon as possible because the present legal framework had been rendered ineffective.

“Additionally, loopholes in the current law have led to chaotic mining practices, some of which have resulted in environmental degradation with impunity. The country can put a stop to this kind of self-damaging acts by enacting the new law just now and rolling out its enforcement,” said Mapemba.

A petition which NRJN board chairperson Kossam Munthali recently led the communities from mining areas to present to parliament represents the pinnacle of a desperate push to expedite the enactment of the Revised Mines and Minerals Act.

In the petition, Munthali says the present law contravenes the tenets of transparency and accountability as it promotes secrecy on contracts and licenses that are agreed between government and mining companies without public scrutiny.

This scenario opens the possibility for corruption and mismanagement and defeats unity of purpose and direction as it does not ensure consistency, predictability and fairness,

Yamikani Jimusole, a gemologist, said rock crystal, smoky and rose quartz were on high demand on the international market and they would sell for $1, 500 per kilogramme, even more, depending on quality and size.

 

“Malawi is blessed with so many gemstones such as rubies, sapphires, tourmalines, beryl, just to name a few, that could transform the country’s economy if properly managed,” Jimusole said.

Deputy Director of Mines in the Ministry of Natural Resources, Energy and Mining, Peter Chilumanga, went in the field recently to inspect and get information on illegal mining but has since not shared the outcome.

 Meanwhile of coordination among African leaders has been blamed as the major cause of loss of billions of money in the mining industry for the continent, African Forum and Network on Debt and Development (Afrodad) said recently at a conference in Mangochi. 

The network made the revelation in Mangochi during the closing of a five-day summer school held at Nkopola where participants included parliamentarians, anti-corruption body officials and other accountability organisations officials from Malawi, Ghana, Zambia and South Africa, among other countries.

In an interview with Malawi News Agency (Mana), communications officer for Ghana Anti-Corruption Coalition, Abdul-Kudus Hussein, said the outlined challenges were the key issues that had come out during the five-day summer school.

“Corruption is a big issue contributing to the loss of billions and underdevelopment of mining industry across the continent,” he explained.

“This is why African leaders need to come together at the African Union or at other African regional blocs to discuss such issues.”

The Ghanaian anti-corruption communications officer’s observations were concurred with by Resource Governance Coordinator for Norwegian Church Aid in Malawi, Thokozani Mapemba, who emphasized the need for research and consultations before venturing into mining deals.

“When African countries with little knowledge about mining sector and required procedures jump into mining deals with foreign investors or companies, the foreign investors take advantage of the situation and push governments into hasty agreements,” he explained.

Mapemba said the summer school was designed to help the participants give correct advice to their governments on how to find good investors and how to deal with taxation issues.

Two participants, Inonge Sakala from Zambia’s Economic Social Accountability Programme, and Alalzuuga Albert Akuka, Ghanaian Member of Parliament, stressed the need for African countries to engage fellow African countries in mining ventures to reduce environmental degradation and pollution.

The two observed that a lot of overseas companies working in the mining sector in different African countries were polluting the environment, especially water and air with little care knowing that it was not their home. 

The topic for this year’s summer school was “To influence African governments to institute and implement policies and practices for sustainable development and eradication of poverty”.

 

 

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