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Malawi looking to reform the Mining sector

Malawi government is taking reforms to the mining sector and control the trade in minerals with Vice-President Saulos Chilima holding orientation meeting with Minister of Mining Rashid Gaffar and officials from his ministry.

Gaffar said the ministry is working major reforms to ensure that there are increased benefits to Malawians from mineral resources through review of Minerals and Mines Act of 1981.

“To this effect, the new Act, gazetted in 2019, makes a requirement for a large scale mining holder to have a Community Development Agreement – like a long term Corporate Social Investment commitment – to ensure that communities in the vicinity of the mining operations benefit directly,” said Gaffar.

The new legislation has led to increased Foreign Direct Investment, Improved transparency in doing business and increased access to geoscientific and mining information, pointed the minister.

However, Chilima, who is also Minister of Economic Planning and Development and Public Sector Reforms, expressed dissatisfaction to the ministry that there are some companies which obtained mining licenses several years ago but are yet to go on the ground.

He advised the Minister to seek legal advice so that such licenses should be revoked.

The Mines and Minerals Bill passed into an Act on December 14, 2018, assented on January 25, and gazetted on February 15, 2019, is aimed to regulate the development of the mineral resources of Malawi through adherence to sustainable development principles, and ensure that the mineral resources benefit the economy and promote the economic growth of Malawi, protect and improve the welfare of the present and future citizens of Malawi, and provide an attractive and conducive environment for investment in the mining sector.

They also include to minimize or prevent economic declines related to decreased mining activity by creating through training and other means of a foundation for the future, social-economic empowerment, uplifting and development of local communities, and regions affected by mining, and manage environmental impacts for the management of all present and future generations of Malawi.

The Law puts the overall administration of the minerals sector in the hands of the Mineral Resources Committee which shall consist of the Commissioner for Mines, Secretaries responsible for Mines, Local Government, Water, Lands, Treasury, Environmental Affairs and the Directors for Geological Survey, Parks and Wildlife, Forestry, Inspector General of Police and Solicitor General, or their representatives.

“The Minister shall not grant an exploration license, retention license, medium-scale mining license or large scale mining license unless the Mineral Resources Committee has recommended the respective application, and any grant of a license that contravenes this subsection shall be null and void,” reads the Act.

The new law entitles the government to acquire free equity of up to 10% in any mining project that will be subject to a large scale mining license.

It says any company that is a large-scale mining license holder and has provided free equity ownership interest to the government shall have on its management committee or board, as the case may be, a committee or board member nominated by the Minister responsible for Mines.

 

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