Africa Mining: Malawi importing 65,000 tons of coal per year

Former minister of Mines and Energy, Grain Malunga who is also a mining expert says “the local mining industry has the potential to surpass agriculture as the number one forex earner.

Malawi imports about 65,000 tonnes of coal per year and spends around US$3.9 million annually from neighboring countries.

According to Malunga this trend can be changed if local miners including Jalawe Coal Mine, Chombe Coal Mine, Mchenga Coal Mine, Kasikizi Coal Mine, Lisikwa Coal Mine, Nkhayuti Coal Mine and Nkhachira Coal Mine are fully supported by local industries and government.

For example, Jalawe Coal Mine is capable of producing at least 100 tonnes per month to supply the tobacco industry and other industries including brewery companies.

Speaking in an interview in Lilongwe, Malunga said Malawi is not fully utilising the existing mineral endowment because of lack of public investment in the minerals sector.

He said “ Priority should be put in exploration of minerals to the level that investors can be attracted to put their money for feasibility studies and mining. This is true with the coal sector where mining is done without more information on continuity and tonnage. The efforts being undertaken by the local coal miners such as Mean Jalawe Coal Mine need to be supported in order to grow their capacity to contribute to import substitution.”

According to Malunga, the mining industry id hampered by luck of capital and technology leading to companies operating blindly.

Malunga said that this problem can be sorted out through proper tax incentives and basic knowledge generation to attract private investment as is the case right now.

Malunga said Malawi has huge potential to produce minerals such as gold, coal, rare earths, niobium and uranium which can in the end spur sustainable economic growth.

“In Malawi we have companies such as Mean Jalawe, Nkhayuti, Nkhachira and Lisikwa which are locally owned and are helping government in job creation and saving forex. This effort needs to be guarded jealously band harnessed to grow the industry”.

“Since independence, Malawi has been depending on agriculture as number one forex earner but lately mining has been identified as a priority sector for economic diversity along side tourism. Malawi’s coal deposits are of good quality with low ash content and less sulphur hence suitable for sustainable use without influencing much climate change,” he added.

Spokesperson in the Ministry of Natural Resources Energy and Mining Sangwani Phiri concurred with Malunga that there is need for more efforts to woo a lot of investors in the mining sector if Malawi is to benefit more.

He said.”Mining by nature is labour intensive and a lot of jobs can be created if huge investments can be attracted to the sector. As a country we have a lot of information at geological survey and investors must make use of it. With more in vetsors in mining
agriculture casn just be playing a complementary role.”

Former Chief Geologist, James Chatupa concurred with Malunga that the mining industry in Malawi is not being fully utilised but has got huge potential.

Chatupa said in an interview that Malawi spends a lot of resources importing coal from neighbouring countries including Mozambique.

“Companies such as Mean Jalawe, Chombe , Kasikizi, Nkhayuti and Nkhachira have the capacity to supply local demand and meet the export demand. What government needs to do is to support local companies in growing their production capacity through removal of non tariff
barriers.”

Mining industry in Malawi is currently contributing about 1 percent to the GDP and has the potential to contribute 20%. Currently the industry employs abour 40,000 people and has the capacity to employ about 200,000 people.