14 AUGUST 2021
By James Nthondo
Ministry of Mining principal secretary, Joseph Mkandawire, has confirmed that the Mineral Resources Committee (MRC) has recommended to grant Globe Metals & Mining a licence for the Kanyika Niobium Project in Mzimba and, should it come into fruition, Malawi could become the fourth major producer of niobium after Brazil, Canada and Australia, Nyasa Times has learnt.
The Kanyika Niobium Mine will become the largest mine of value after Kayelekera Uranium Mine in Karonga that for ten years run by Paladin Africa Limited (PAL) but is now being managed by Lotus Resources Limited.
Niobium is a rare shiny, white metal that is used for the production of high-temperature-resistant alloys and special stainless steels. Alloys containing niobium are used in jet engines and rockets, beams and girders for buildings and oil rigs, and oil and gas pipelines.
Globe Metals & Mining country director, Neville Huxham, also confirmed receiving formal communication from the Ministry of Mining after nine years of negotiations and waiting.
Huxham said Globe Metals & Mining–an Australia Stock Exchange-listed company–was just waiting for the licence to be duly signed and authorized by the Minister of Mining after MRC recommendation.
According to Huxham, the company will be producing 3 000 tonnes of niobium and 200 tonnes of tantalum annually with a workforce of about 1000 permanent and temporary staff once the mine becomes fully operational.
Mining expert and former minister of Natural Resources, Energy and Mining, Grain Malunga, said granting Globe Metals & Mining was beneficial as there would be economic linkages because the company as well as residents would require a lot of services.
“We need to promote these companies to start mines and encourage them to be responsible companies that will benefit the economy and the local community equally,” Malunga is quoted as saying in the local press.
Nyasa Times has learnt that Globe Metals & Mining is expected to produce high purity niobium pentoxide and tantalum pentoxide at Kanyika in Mzimba in a project that will require a capital investment of around $450 million (K367.2 billion at current exchange rate) with an initial mine life of over 20 years.
“The company is now in the process of finding financiers but we are waiting for the mining licence to start talking to them,” Huxham said, adding that the company had an exploration licence which necessitated it to extract samples but has since expired.
For about nine years, the company has been using an exploration licence and has sent several tonnes of samples to laboratories in Australia, China and South Africa for testing.
However, Huxham said once the licence is issued the company may take a minimum of three years to start actual production of niobium.
As a requisite for any listed company, last week, Globe Metals & Mining updated the Australian Stock Exchange and shareholders, on the delay by Malawi Government to issue the mining licence.
Pursuant to the Mines and Minerals Act of 2018 which became effective on September 1, 2019, the Minister of Mining is obligated to follow the recommendation of the MRC and grant the licence within 45 days, with the registrar then having five business days to notify the company and issue the licence.
However, the 45 days elapsed on July 18 2021 and in its update signed by Globe Metals & Mining managing director Alistair Stephens and company secretary, Michael Fry the company expressed ignorance on the reason for the delay.
“The company is unaware of any reason or basis to delay the grant of the licence from the Minister of Mines and have requested a formal meeting to seek clarification on matters pertaining to the application of procedures in the Mines Act,” reads part of the update.
Mkandawire said Globe Metals fulfilled the mandatory conditions in terms of checklist for the grant of the mining licence by obtaining all relevant environmental certificates in accordance with the Environmental Management Act (2016) and the Mines Act, hence; the recommendation but the delay to grant the licence was as a result of “other processes that were being looked into.
“There were administrative measures that proposed to look at other issues which are very crucial… Apparently the development agreements were not completed but are about to be completed now so I think things will be okay any time,” he said.
While confessing to have contravened the Mines and Minerals Act, Mkandawire said “that happens, we have passed the days but we will be able to grant them the licence.”
Mkandawire said currently they are finalising the development agreements, which will outline the mining’s benefit sharing.
But the project still faces resistance from the community who have filed a lawsuit seeking compensation for prospecting operations.
The community alleges that as a result of the activities of Globe Metals & Mining in the area, it has suffered gross poverty, deprivation and perpetual food insecurity.
Inkosi Mabulabo, in whose area the mine is located, said in an interview that although he had not been officially communicated about the granting of the licence, there were several outstanding issues which have not been resolved such as the disturbance allowances and the community development agreement.
“We are waiting for compensation then we can draw the development agreement failing which nothing will move because people want their compensation and this has been a thorny issue and is still in court,” Mabulabo told the local press.
The finalisation and execution of a development agreement is an important aspect of the project as it outlines the fiscal regime under which the project will operate and sets out the terms upon which the company is able to develop the minerals contained in the project including terms not otherwise required through existing regulations.