Mining scandal involving trillions of money hits Malawi

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Malawi Mining

The mining industry which is touted to have the potential to pull Malawi out of its economic woes continues not to bear fruits as details of a fresh scandal involving trillions of Kwacha have emerged.

Investigations by News, Research and Initiatives on the extractive industry in Malawi have revealed irregularities in mining, energy, and other environmental project contracts and permits.

Due to poor governance, the Malawi government gave the Kangankunde Rare Earths Mining Project in Balaka to multiple tenants.

One of the companies that were contracted to carry its work in the area, Australia’s Lynas Corporation, is failing to develop the resource after purchasing it at US$4-million (about K2.5-billion) due to legal complications.

Malawi Mining
Mining in Malawi remains corrupt.

Previous tenement holder of the Kangankunde Rare Earths Mining Project, South Africa’s Rift Valley Resources, sued the Malawi Government and obtained an injunction against the development of the mine on the grounds that the Bakili Muluzi administration erred by not renewing its exclusive prospecting license for the Kangankunde resource, whose rights at that time were with Rare Earths Company.

Rare Earths Company sold the resource to Lynas Corporation at US$4-million in 2007 for fear that it will lose the mineral rights, and the  Bingu Wa Mutharika administration allowed the deal to go through despite the prevailing court injunction.

Currently, Rift Valley Resources, owned by South African geologist Michael Saner, is claiming US$100-million from the Malawi Government for damages plus sunk costs, legal costs and interest.

Lynas says the purchase agreement contained a number of conditions precedent that were satisfied before completion, including approval by the Malawi Department of Mines for the transfer of the Kangankunde tenement to Lynas, approval by the Malawi Investment Promotion Agency for the Lynas project proposal and approval by the Malawi exchange control authorities for Lynas to make payment as a foreign investor.

The wrangle arose because of poor decision making by the government and it has become costly to the nation and the investor for the Kangankunde Rare Earths Mining Project.

According to the paper, the corrupt acts involved the innermost circles of power during the tenures of late Mutharika and Muluzi.

Meanwhile, Rift Valley Resources, Lynas Corporation has left the site due to the High Court injunction.

Mining and energy projects in the country have also faced intense community resistance which has often become the target of crackdowns by state and corporate security forces.

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26 Comments

  1. When l first heard that mining had added into our economy 18 bilion kwacha just in November 2011, l said to myself malawi will be at the same stride as Botswana. Ironically our economy is going down on a daily basi n even malawians now dont pay any attention to kaerekera as there is no any accountability now n govt is not benefiting any kwacha. Only greedy few are the beneficialies. Thus nobody should dare to explore oil in our lake; tithamangsanapo ndi mifuti sopano ndapota nanu.

  2. malawi sazatukuka we will be a laughing stok owezz …God please give us leaders who have true visions and fear u look these crooks they com embezzle and start bowing down to sins for aid mxieeewww

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  4. Kavotedwe amalawi aaa anthuena amakhala anzeru zakusukulu zokha no nzeru zaumunthu si izi pano kungonva anabadwila ku amerika ali ndi masters kupwetekesa malawi tu…ngat akutuluka thukuta kutangwanika kukanika kulephela kuyendesa malawi nzeru zilipo?pomwe anzao akuongolela bwino maiko akuluakulu kuposa ka malawi mxiiii ma cent omwewa mukubanso ngat mnabadwila kuumphawi bwanji chonsecho mnadadwila pa chinyezi kusakhuta kusowa chikondi kuendesa dziko si bizimizi mukuenela kuziwa!!!!!!

  5. Pano Mukupanga ma dongosolo woti muyambe kuwenga Mafuta mu nyanja yathu yokongolayi….Ndi wanthu angati omwe azapindule nawo?ngati momwe tikupindulira pano??Pano ngakhale munthu wosaukitsitsa akupindula ndi nyanjayi koma,mukazayamba zanuzo za mafutazo Ndiochitabwino nokha muzapindule. Anthu wozikonda inu.

  6. First solution is to change the name of the country.The british called our coutry by our big resource we have some one jst changed it to flames of fire i dont know for what reason.

  7. Malawian politicians go into politics to steal not to help the country develop. This why we see them become so rich within short period of time. They are there just to be seen as if they want to help the country to develop but inside they have a purpose to accomplish this why we should be vigilant to guard against any corruption hovering around by supporting ATI bill. This bill will expose any future shady deals by Govt.

  8. Poor people are suffering while the money goes to the richer and the richer getting richer is not human, these big people think like animals like lions only want to get the best

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