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27/09/2016

Malawi discovers new mineral deposits, eyes investors

Development Policy

Malawi discovers new mineral deposits, eyes investors

Bright Msaka

[Malawi Voice]

Impoverished Malawi announced yesterday (20 August) that new mineral deposits had been discovered in a $30-million geophysical survey sponsored by the World Bank and the European Union.

Natural resources and mining minister Bright Msaka did not specify the minerals, but other officials said they were phosphate, copper, coal, kimberlite, nobium and uranium.

No details were given of the size or value of the deposits, nor any indication of whether they could transform Malawi’s agriculture-based economy.

Unlike many African countries whose economies rely on mineral exports, Malawi has until now only boasted of a $185-million uranium mining project in the north of the country.

Msaka said the new data, obtained in a year-long survey, “will significantly increase our knowledge of our geology and enable prospective investors to start using it in geological mapping and mineral exploration.”

He said that in the past, the country’s “full mineral potential was poorly understood because of lack of geological information … This hindered meaningful mineral exploration.”

Msaka said the first time Malawi collected mineral data was 30 years ago during the era of late dictator Kamuzu Banda, when Malawi “did not have enough details and accurate data.”

He said the new data, acquired using modern and state-of-the art equipment, “was accurate and will reduce needless speculation and the high risks involved in discovering mineral resources.”

Msaka said he hoped Malawi, like Tanzania, Uganda and Mozambique, would now “witness a surge in foreign investment in the minerals industry”.

Neville Huxham, managing director of Global Metals and Mining (Africa) Limited, an Australian firm mining niobium, told AFP the survey was “a step in the right direction because it is simply showing us where there is a possibility for exploration and Malawi’s mineral potential.”

He said Malawians would now be “well-informed of what is involved in mineral exploration and realise that they won’t be millionaires overnight.

“A great deal of work now begins because you need a lot of investment to open a mine.”

Malawi’s minerals industry, on average, contributed around 1.5% to national income between 2006 and 2010, according to the World Bank.

The bank projected that the sector would contribute 2.8% to the economy between 2011 and this year.

Msaka said the industry was set to “drive the diversification of the agrarian-dependent economy.”

He said that because of its dependence on agriculture, with tobacco contributing nearly 70% of foreign exchange earnings, Malawi had been hard hit by the global anti-smoking lobby and unpredictable climatic conditions.

Half of Malawi’s population of around 16 million live on less than a dollar a day.

The Kayelekera uranium mine in Karonga district, northern Malawi, remains the single biggest mining project, after opening in 2009.

The project is owned by Paladin Africa, an Australian firm which holds an 85-percent stake, with the government holding the remaining shares.

The mine suspended its operations last year due to low prices at the international market.