Malawi has banned the export of gemstones and precious minerals and ceased new export licenses as part of reform efforts in its mining sector. The government seeks to audit contracts and enhance transparency. Notably, Malawi has pursued significant unpaid taxes from foreign companies and aims to capitalize on its minerals to boost its economy.
The government of Malawi has implemented an immediate ban on the export of gemstones and precious minerals, as well as halted the issuance of new export licenses. This decision aims to reform the administration of the mining sector to enhance efficiency and transparency. Malawi possesses significant mineral resources, including uranium, rubies, and sapphires, but has not fully capitalized on their economic potential compared to neighboring countries.
Mining Minister Joseph Mkandawire stated, “This measure has been taken in order to sanitise the mining sector as the ministry will be undertaking some reforms to bring in efficiency and transparency in the mineral rights administration.” The ban is effective immediately and is set to remain in force until further notice. This action follows a directive from the Vice President to audit existing mining contracts, a review process projected to take 21 days.
In recent years, Malawi has pursued billions of dollars in unpaid taxes and royalties from foreign mineral companies. Notably, it has sought over $309 billion from Columbia Gem House, a U.S.-based jewel supplier, concerning rubies exported from Malawi over the past decade. The Malawian government claims that Nyala Mines Limited, a subsidiary of Columbia Gem House, reported taxes of only $600 against projected revenues of $24 billion from its operations in Malawi.
This amount sought from Columbia Gem House is nearly thirty times the country’s GDP, according to the International Monetary Fund. Statistics indicate that the minerals sector contributed only 3.5 percent to Malawi’s national income in 2023, according to the World Bank. The World Bank also highlighted that the sector has the potential to generate up to $30 billion in exports from 2026 to 2040, particularly through the exploitation of “green minerals” like graphite and titanium.
Currently, approximately 75 percent of Malawi’s population, which totals around 24 million people, lives in extreme poverty, according to the World Bank. The government’s reform efforts are crucial to transforming the mining sector into a more beneficial industry for the nation and its citizens.
In summary, Malawi’s government has halted mineral exports and frozen new licenses to undertake significant reforms in its mining sector. The ongoing efforts aim to enhance fiscal accountability and improve management of its mineral resources. As the country moves forward with contract audits, the potential for economic growth from minerals remains substantial, highlighting the urgent need for effective administration in the sector.
Original Source: clubofmozambique.com
