Digging Deep: How Malawi's Mineral Wealth Could Shape Its Future

Unlocking Malawi's Mineral Wealth: Key Sites and Future Prospects

When I first visited Malawi in 2018, I was struck by the contrast between its natural resources and those of its neighbors, such as Zambia, which seemed more endowed with minerals critical for economic growth. At the time, this lack of significant mineral wealth appeared to be a barrier to boosting the economy and alleviating poverty. However, recent discoveries and developments have revealed that Malawi has the potential to become a key player in the global supply of critical minerals. By responsibly harnessing this newfound mineral wealth, Malawi has the opportunity to transform its infrastructure, fuel economic growth, and ensure long-term benefits for its population.

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A Concentration of Opportunity

Unlike some nations where mineral deposits are dispersed across vast areas, Malawi's critical minerals are concentrated in specific regions, making exploration and development efforts more focused and efficient. Below is a detailed look at these key sites and the minerals they harbour.

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1. Rare Earth Elements (REE)

Kangankunde: Situated in Malawi’s southern region, Kangankunde is renowned for its high-grade deposits of rare earth elements (REE). The Kangankunde Rare Earths Project, managed by Lindian Resources, is in the feasibility stage and holds the potential to significantly boost Malawi’s REE output. These elements are essential for modern technologies such as electric vehicles, wind turbines, and electronics.

Songwe Hill: Located in Phalombe District, Songwe Hill is another critical site for REE extraction. Mkango Resources is spearheading development here, and production is expected to commence soon. With global demand for rare earth elements rising, Songwe Hill's development could place Malawi among the world’s leading producers of these critical minerals.

?2. Graphite

Kasiya: Located near the capital city, Lilongwe, the Kasiya Rutile-Graphite Project, led by Sovereign Metals, is positioned to become one of the largest producers of natural graphite globally. With substantial deposits, this project is key to Malawi’s future in the production of both graphite and rutile, a high-grade titanium dioxide mineral. Graphite is vital for battery technologies, especially in electric vehicles, and its global demand is set to surge in the coming years.

?3. Niobium

Kanyika: In northern Malawi's Mzimba District, the Kanyika Niobium Project is being developed by Globe Metals & Mining. Niobium is a valuable mineral used primarily in the production of steel and superalloys, which are critical in aerospace and automotive industries. The significant niobium deposits in Kanyika could make Malawi a strategic supplier of this essential element.

?4. Uranium

Kayelekera: A historically significant site, the Kayelekera Uranium Mine in northern Malawi was once a major producer of uranium. While the mine has been on care and maintenance since 2014 due to low global uranium prices, it remains a critical asset for Malawi. With rising interest in nuclear energy as a clean power source, the Kayelekera mine could potentially restart operations, positioning Malawi as a key uranium supplier.

?5. Bauxite and Phosphates

Bauxite Deposits: The Mulanje region in southern Malawi has been identified as a potential site for bauxite extraction. Bauxite is the primary ore for aluminum production, a material essential for industries such as construction, transportation, and packaging.

Phosphate Deposits: In the northern Karonga District, phosphate deposits are aimed primarily at supporting the agricultural sector through fertilizer production. These resources could be crucial for enhancing Malawi’s food security by boosting agricultural productivity.

?6. Other Minerals

Titanium and Heavy Mineral Sands: Found along the shores of Lake Malawi and other locations, these mineral sands contain valuable elements like titanium. Titanium is used in everything from aerospace components to medical devices, making it another vital resource for Malawi’s future economic development.

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Future Benefits

With the global demand for critical minerals continuing to rise, Malawi has the opportunity to diversify its economy, attract foreign investment, and secure a more sustainable future.

The Malawian government is actively promoting these ventures through reforms such as the new Mines and Minerals Bill, which aims to enhance regulatory frameworks and attract investment by establishing an independent authority for mining permits. The government envisions increasing the mining sector's contribution to GDP from its current levels to 10-15% by 2030.

A possible mining boom in Malawi is poised to significantly influence infrastructure development across various sectors:

1. Enhanced Transportation Networks

The expansion of mining operations necessitates improved transportation infrastructure, including roads, railways, and ports. As mining companies require efficient logistics for transporting minerals to processing facilities and export points, the following developments are likely:

Road Construction and Upgrades: Increased mining activity will likely lead to investments in road infrastructure to facilitate access to remote mining sites. This can enhance connectivity for local communities and improve overall transportation efficiency.

Railway Development: There may be initiatives to develop or upgrade railway systems to transport bulk minerals, which can reduce costs and environmental impacts compared to road transport.

2. Power Supply Improvements

Mining operations demand substantial energy resources, which could drive improvements in Malawi’s power infrastructure:

Increased Energy Generation: The need for reliable electricity will likely prompt investments in renewable energy sources and improvements in existing power plants. Projects like the refurbishment of hydropower facilities and the expansion of the national grid are essential to meet this demand2.

Interconnection Projects: Efforts to connect Malawi's power grid with neighboring countries (e.g., Mozambique) may gain momentum, allowing for greater energy imports and enhancing reliability.

3. Water Infrastructure Development

Mining activities often require significant water resources, which could lead to enhancements in water supply systems:

Investment in Water Management: To support mining operations, there may be increased investment in water supply infrastructure, including reservoirs and treatment facilities. This can improve access to clean water for both mining operations and local communities.

Irrigation Projects: Improved water management could also benefit agricultural sectors by providing reliable irrigation systems, thus supporting food security.

4. Economic Growth and Urban Development

The influx of investment in the mining sector is expected to stimulate economic growth, leading to urban development:

Urbanization: As mining operations expand, surrounding areas may experience population growth as workers migrate for job opportunities. This can lead to increased demand for housing, schools, and health services.

Job Creation: The mining sector is anticipated to create direct and indirect employment opportunities, which can enhance local economies and contribute to infrastructure needs.

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Tempering Expectations

Nevertheless its important to be realistic around expectations of how mining can transform the Malawian economy.? In a recent article by Leon Louw (https://www.dhirubhai.net/posts/leon-louw-b4354653_whyafrica-whyafricaroadtrips-africa-activity-7247468104153219072-mEdh?utm_source=share&utm_medium=member_desktop) the Malawi Minister of Mining Monica Chang’anamuno explained whi it is a challenge to manage the expectations of all stakeholders, and especially that of local community members.? “When people hear “mining” they expect immediate benefits. So, for us to continuously emphasise the importance of mining to turn the economy around, is a bit of a double-edged sword, as people think their situation will change overnight,” she said.

In this regard I ran some rough calculations:

The mining sector currently contributes less than 1% to Malawi's GDP, but the government aims to increase this contribution to between 10% and 15% by 2030 as part of its Vision 2063 initiative. The GDP from mining was approximately 55.03 billion MWK (around $66 million) in 2022. If the mining sector grows as projected, it could potentially add between $1.2 billion and $2.9 billion to the GDP by 2030, depending on the extent of development and investment in this sector.?

To calculate the GDP per capita for Malawi in 2030 based on the projected GDP and population growth, we can use the following data:

Projected GDP for 2030: Approximately $19.56 billion.

To calculate the GDP per capita for Malawi in 2030 based on the projected GDP and population growth, we can use the following data:

Projected GDP for 2030: Approximately $19.56 billion.

Projected population for 2030: Estimated to be around 24.2 million.

Thus, the projected GDP per capita for Malawi in 2030 is approximately $808.26. This indicates an increase from the current GDP per capita of about $548.58 in 2023 – significant in the context, but not transformative.