Mining & Trade News

Panthunzi Eco-Solutions, the organisers of the Blantyre Farmers Market says they intend to utilize the monthly event for the promotion of organic farming. ?

Project Director Chris Walker says the Farmer’s Market will soon be hosting a number of activities including mobilizing people into a network that will produce home grown food using organic farming practices.

“We are looking at starting a Blantyre Urban Food Production Network of home grown food with organic farming and permaculture as means of food of production,” says Walker adding that the monthly Farmers Market event will provide a marketplace for local producers, as well as inspiring and motivating local producers and associations.

The Director says the permaculture concept was adopted from the system of how forests exists in biodiversity and interconnection, “so this place is about that as we tend to bring people together in a relaxed and open environment.”

According to Walker, it is much healthier to practice organic farming compared to inorganic especially to consumers of the produce because no chemicals are applied to crops.

“All along we have promoted organic farming because the current farming practices involves the application of a lot of chemicals to crops which is unhealthy to people eating it,” he explains pointing out that they further intend to promote the Made-In-Malawi concept since all products displayed at the Market pavilions will be locally produced.

Panthunzi Eco-Solutions will also promote entrepreneurship skills amongst participants by conducting business management workshops emphasising on marketing.

“We will train vendors in marketing so that they have relevant techniques on how to keep attracting clients even when they are not attending the farmers market.”

Walker, however, notes that Covid-19 and lack of disposable income for buyers are suffocating market performance because patronage at the event, especially for tourists, who attend the event in large numbers, has been greatly affected.

Established in 2018, the Blantyre Famers Market is supported by Panthunzi Eco-Solutions in partnership with The Truss Project. It is hosted at Glass house located in the outskirts of Blantyre Central Business district, along M1 road in Kabula.

ABSTRACT

MET-CHEM Canada Inc., on behalf of MIDCOR, carried out a feasibility study on the techno-economic  evaluation of the feasibility of setting up an integrated alumina/aluminium plant based on Mulanje mountain bauxite. The study was undertaken in 1993 through funds from African Development Bank.

The results of the 1993 feasibility study show that a combination of probable and indicated reserves of bauxite amounts to 25.6 million tonnes using a cut off grade of 30% Al2O3. An annual extraction of 580 thousand tonnes of bauxite will produce  200 thousand tonnes of alumina which in turn will produce 100 thousand tonnes of aluminium through the use of Bayer process in Alcan P-180 cells.

The capital cost estimate for the project is estimated at US$ 820 million with an Internal Rate of Return (IRR) 7.4% for alumina and 6.2% for aluminium. The corresponding payback periods are 15 and 17 years respectively.

1.0     INTRODUCTION

Mulanje mountain bauxite is situated about 70 kilometres east of Blantyre city. On its foot is situated Mulanje Boma (district headquarters). A Tarmac road connects Mulanje Boma to Blantyre and a rail line from Blantyre to Beira passes through Luchenza township about 30 kilometres west of the massif. A 66 Kv electric line is available from Nkula Hydroelectric Power Station. Telecommunication system is very good.

The low lying areas around Mulanje massif experience warm to hot and humid weather with an annual mean temperatures of about 220 C. Annual mean maximum temperatures reach as high as 350 C in November in the Phalombe plain. The coldest month is July when temperatures reach as low as 10.8 0 C at Mulanje Boma.

2.0     DEPOSIT DESCRIPTION

Mulanje bauxite is a residual product which resulted from the weathering of syeno-granitic rocks that form Mulanje massif. Six extensive bauxitic areas have been identified, but the best deposits are found on Lichenya and Linje plateaux.

The bauxite is mainly a trihydrate gibbsite which lies over kaolinite and has free quartz and geothite as the main contaminants. Some of the quartz is semi precious.

A feasibility study conducted by LONRHO showed that the two deposits on Lichenya and Linje (Figure 1)amount to 28.8 million tonnes within an average depth of 4.5 metres.

Table 1 shows the average analysis of the bauxite:

Table 1: Mulanje bauxite analysis

The bauxite deposit exists in form of lenses which are located on the plateaux at an elevation between 1800 and 2000 metres.  The bauxite will be mined through the use of a front end loader and a backhoe hydraulic shovel will load it into articulated trucks.

The bauxite will then be hauled to a loading bay where it will be transported by a ropeway to an alumina plant about 600 metres below.

The proposed mining output has been set at 580 000 tonnes of bauxite (on dry basis) to produce 200 000 of alumina tonnes per year to meet an annual production of 100 000 tonnes of aluminium.

The bauxite will be processed to produce alumina and aluminium. Run of mine bauxite will be beneficiated to reduce the quartz content as well as reduce the quartz size to an undersized product below a 65 mesh size. Bayer process will be used to transform the bauxite into alumina.    The next stage will be alumina smelting producing 100 000 tonnes of aluminium sows per annum based on the Alcan P-180 cell.  The aluminium smelting will depend on the availability power inthe region of 15.3 kWh per kg of aluminium produced.  The present power supply in Malawi cannot meet this demand.

The main waste from the bauxite processing will be the tailings from beneficiation plant and the red mud from the Bayer process.  The red mud will be washed in high capacity wash thickeners to remove chemicals derived from the Bayer process.  The red mud and the tailings will then be pumped to a mud disposal area.

3.0     LABOUR AND INFRASTRUCTURE

The proposed labour for Mulanje bauxite is divided into mine and ropeway, alumina plant and alumina smelter as shown in the Table 2 below:

Table 2: Proposed labour for Mulanje bauxite

The above table includes 26 expatriates in the alumina plant and 29 in the smelter. They are expected to be in Malawi for a  period of up to 4 years.

The plants and residential areas will be supplied with water from a dam in the Likabula river.

There is enough electricity to supply the alumina plant, but for the smelter more electricity will have to be sourced elsewhere. Suggestions have been made to import electricity through inter connector grid through Southern Africa Power Pool.

4.0     PROJECT SCHEDULE

Mining companies finance their projects in several different ways. Projects can sometimes be funded by equity sharing or from cash reserves of a mining company debt. The most common type is joint venture which mostly shares the project risk. However, it must be noted that inorder to open a mine, billions of dollars are sourced and this depends on ore grade, tonnage, process plant design, geographical location in terms of accessibility etc.

       1.  Feasibility studies for mining projects as an Investment Decision

The law in some countries requires governments’ approval of mine feasibility studies like in the case of Malawi. Since it is the first line of reference, the government has a responsibility to the public to ensure that environmental health, safety (EHS) and social-cultural risks are properly managed and contained in a manner that serves the public interest. In other cases, government limits approval based on Business Plans and Environmental and Social Impact Assessments (ESIA). A Bankable feasibility study can also be a risk management measure. To demonstrate whether a project is technically feasible and financially sound and viable, some of the questions that can be borne in mind by the minng company on investment risk could include identifying the risks and how will they be managed, is the profit acceptable to the investor in terms of the Internal Rate of Return (IRR)? What will be the payback period? Can this project be done and is it sustainable? All these questions come because mining is a ‘notoriously cyclical industry’ which may deter banks from providing funds.

      2. The role of International Financing Corporation (IFC) in Mining

Some multinational mining companies  involve International Financing Corporation (IFC) , a World Bank Group which has demonstrated massive experience in providing finance and sustainable business solutions in the mining sector and contributes positively to mitigating environmental and social risk, providing advice on community engagement, and implementing shared-use infrastructure and mining projects across the development stage, including construction, production, and expansion, with a focus on impact investing for sustainable economic growth. Their advisory work facilitates such initiatives as supply chain linkages and stakeholder development in line with global best practices.The long-term competitive financing instruments meets project needs, including shared equities, corporate and project-level debt, and third-party source capital investments, ofcourse with some strings attached.

An example where IFC has demonstrated outstanding results is the IFC Report with Commonwealth Development on “Mining Royalties Data in Colombia”-Data at Work for the Voice of the people. It  presented a set of recommendations for governments, industry and civil society aimed at improving data disclosure and use practices of mining royalty data to provide citizens with complete, relevant and actionable information(December,2020).

In another development IFC announced in 2011 that it planned to invest about USD300 million in African mining operations over the following 3 years as from exploration stage to early equity mining stage with an intention to participate in project and corporate financing partnerships, supporting mid-tier mining companies.

    3.  Types of Project Funding and Financing

      (a)  Debt Avoidance

When companies operate at a profit, the board of directors makes decisions on how to use profits after tax. To finance capital projects during the operating life of a mine (LOM), a mining company may generate funds. These funds may be applied to all purposes: funding replacement capital and funding project capital for improvement projects, expansion and even extension of the Life of Mine. .

Financing new mines out of accumulated cash has the advantage of avoiding debt and interest liabilities and of keeping equity undiluted, i.e. no additional shares need to be issued as such a mining company has cash reserves.. However, mining companies discover certain mechanisms that can have an advantage of sharing risk alternatively. Therefore, it may seem very important to provide funding to new commissioned mines so that   other mechanisms can be employed to source the remaining cash requirements. Practically, most mining companies cost of construction does not wholly require resources from the company and must be funded in its entirety by any other means.

     (b)   Joint ventures (JV)

This is viewed as a useful risk-sharing mechanism. It may be a Joint Venture between two or more partners holding mining companies or with other companies, financial institutions or governments. Usually, in addition to funding, each participant provides other resources to the venture, in the form of specialized expertise and/or physical assets.  An example can be a mining company with a deposit, Resource model done, holding a mining Licence (holding primary assets) with feasibility studies done and perhaps a Bankable feasibility study. This primary asset holder usually proposes the structure of the JV, often retaining a controlling interest of 51% or more and another that will have secondary assets and can be a company that will in partnership holding less than 50%.

The structure of a Joint Venture is embodied in a contract legally provided for which may vary considerably. The agreement normally specifies how many executive and non-executive directors each party may appoint Other partners may be required to contribute funds at the initial stage and possibly at later stages of the contract, whilst other partners may have a carried interest, meaning an entitlement to future benefits of the project such as, expertise, grant of mineral rights by a government, dividends etc.

   (c) Debt funding

Banks and other types of financial institutions are willing to consider lending for new projects in Mining, and are, actively seeking investment opportunities .Mining being a relatively-high risk sector, it has two important consequences for borrowers: in that interest rates may be higher than for other sectors of the economy and also that Lenders or Lending Instiutions are likely to exercise caution considering the risks. It is for this reason that Due Diligence is a must meet requirement and is exercised  with caution meaning  financial institutions will take all reasonable measures to assess the risks and ensure that a project is both technically and financially viable before committing  to funds which they really hold in trust for other parties. Thus a feasibility study is of paramount importance at this stage…A financial institution may also engage consultants but typically a mining company will commission an independent review by appropriate experts who will sign off on a feasibility study, business plan or other document supporting a project proposal.

The professional integrity and reputation of the consultants provides all interested parties with assurance that their report is totally impartial, independent regardless of who is paying them, and gives a professional factual assessment of the project proposal.

Financial institutions also exercise care in ensuring that their funds are not applied to projects which may in any way be accused of human rights violations, abuse of the environment or other aspects of life which are likely to attract negative media and Non-Governmental Organizations (NGO) comment. Of interest to note is the Equator Principles of which some countries are signatories which is, an international convention providing a minimum standard for due diligence in risk-based decision-making regarding loans in all formats, covering social and environmental protection, including climate change and in some countries, such as Australia, there are requirements for guarantees of protection of the rights of indigenous communities. Lenders will therefore review the history of a company making loan application, its assets and proven level of competence and will make a decision, and possibly fix interest rates, taking account of those factors.

   (d)  Equity

In order to raise funds without resorting to debt finance, or in combination with it, companies have the option of offering equity, i.e. an opportunity for other parties to participate by investing in shares. A new company just embarking on a mining venture, could be a Junior, might be offering shares or making IPO (Initial Public Offering) .The stock exchange may chose it for listing at the stock market may be in the mine’s host country, the country where the company is headquartered, or another venue, and a listing may be sought on more than one stock exchange. An existing company requiring to raise funds beyond its internal capacity may also offer a special issue of shares, with priority being given to existing shareholders.

The parties investing in shares may be individuals or different organizations, including governments. Other companies or organisations might decide to invest venture capital, i.e. funds invested in a situation where the risk is known to be relatively high and there is anticipation of good rewards and shares may be preference shares which have priority when dividends are declared, and in the disbursement of funds from disposal of company assets.

Malawi’s Parliamentary Committee on Natural Resources and Climate Change (NRCC) has expressed concerned on how Malawi Energy Regulatory Authority (MERA) has handled the fuel procurement process saying it could lead to fuel shortage.

MERA declined to approve National Oil Company of Malawi’s (NOCMA) 2021 to 2022 application to award contracts to suppliers of fuel by the names of Independent Petroleum Group (IPG) and Lake Oil Limited saying they were concerned with the premiums stipulated under NOCMA’s Delivered Duty Unpaid (DDU) which in MERA’s view were not competitive and not transparent.

But reporting to the General Assembly following consultative meetings it conducted with MERA, NOCMA and other stakeholders, NRCC committee Chairperson Werani Chilenga told the house that MERA’s action on the matter indicated that as regulators they intended to prolong procurement period.

Chilenga said: “The Committee, however, is concerned that MERA’s action shows that it wants to prolong the delays in the procurement process of fuel.”

“The Committee is, therefore, concerned that such acts are a recipe for a possible fuel crisis in the country which could translate that government has failed.”

“The Committee is therefore concerned that MERA and some officials who are benefiting in the current saga may stir problems for the government.”

Considering that the fuel procurement process has taken over eight months instead of four months, and based on the approvals from Public Procurement and Disposal of Assets (PPDA), Anti-Corruption Bureau (ACB), Government Contracting Unit and Ministry of Justice, Chilenga said the committee has recommended NOCMA to proceed with necessary administrative arrangements within the law to proceed with the procurement of fuel.

Understanding that Malawian Transporters have been suffering due to the brokerage system that is not supported by any law, the committee has also recommended that Malawian Transporters should be allowed and supported by oil companies to operate without the brokerage system.

Chilenga also said the committee has also directed MERA to be operating as a regulatory body and follow the law and not meddle in the procurement process.

“That due to the damage caused by MERA for the past eight months in delaying the fuel procurement process, the President should consider dissolving the MERA Board; and that the Anti-Corruption Bureau should investigate the claims already submitted by NOCMA on the November 6, 2020 as soon as possible,” Chilenga said.

On November 26th, 2020 NOCMA submitted to the Anti-Corruption Bureau reporting all authorities that had a hand to influence the fuel procurement process.

Meanwhile, 100 percent of NOCMA’s transport business under DDU is given to local transporters on Beira Route.

NOCMA’s 2021 arrangement which was supposed to be implemented in March, 2021, will see 87 percent of NOCMA business on transportation for Beiraand Dar es Salaam given to Malawian Transporters. The oil company uses DDU to ensure security of fuel supply in the country even when there is a financial challenge for the company as NOCMA still procures and only takes responsibility of the product at a later stage when the product is in its reserves.

Sugar group IllovoMalawi Plc has registered a net profit of Mk6.1 billion for the six months’ period to February 28, 2021, compared to MK2.0 billion that the company made for the corresponding six months to February 29, 2020.

In an unaudited financial statement for the six months, Illovo explains that despite being hit by Covid-19 challenges, company sales revenue remained relatively flat with six-month sugar and molasses sales totaling MK74.5 billion.

Reads the statement co-signed by Chairman Gavin Dalgliesh and MD Lekani Katandula:  “Both factories completed their crushing seasons in December 2020 with agricultural operations performing well in terms of cane yields and overall sucrose content from both own and smallholder farmers cane.”

“Investment in drip irrigation at Nchalo delivered improvements in cane yield in line with targets.

“Engagement continued with the Government on the need to dissuade the rampant smuggling of sugar and other products.”

The statement also said in January 2021 the company experienced very dry weather which triggered high irrigation demand and a rise in aphid infestations.

It says good rainfall at both factories received in February 2021 partly helped to relieve the dry conditions.

Milling operations for both factories achieved consistently high throughputs prior to closure of their crushing seasons and commenced their respective off crop maintenance programs in December 2020.

It says the programs were completed successfully and both plants resumed production in mid-April this year.

States Dalgliesh and Katandula: “Despite the domestic market being under significant pressure through a combination of general instability, a slowing economy exacerbated by the Covid-19 pandemic, currency depreciation and influx of informal imports, domestic sugar sales reflected a welcome return to more normal levels supported by active marketing and logistics improvement initiatives and sustenance of our reduced domestic pricing since mid-December 2019.”

“Export sales revenues were however below expectations with covid-19 hampering both inter-continental and intra Africa exports.”

“Quality remained a key focus area to ensure superior delivery of our customer experience.”

The company has generated operating profit of MK10.6 billion against MK5.0 billion the company made for the last period.

Despite the hiccups that the company faced in the last period, Illovo eyes improvements in terms of agricultural production and electricity supply.

According to the statement, it is envisaged that there will be a return to more stable weather patterns in the next six-month period.

It says: “With regard to the commercial environment, the business will continue to build on the successful route to consumer initiative with a focus on product pack sizes, branding, affordability and quality.”

“Sugar exports, in what is expected to be very challenging markets, will also continue to be an area of attention for the commercial teams especially in light of the receding Covid-19 induced logistical challenges as global vaccination programs gather momentum.”

“The interplay of stable domestic inflation, moderate exchange rate depreciation, stable interest rates and improved national food supplies could provide a platform for a better second half provided that there are no further covid-19 related downsides.”

It also says Illovo has embarked on various initiatives that will help to improve cane crop yields, plant reliability and people productivity across the business value chain.

The initiatives include: the ongoing factory recovery improvement; optimal use of field irrigation systems; standardizing sound agronomic practices and; embedding of the workforce transition project.

UAE oil exploration firm Rak Gas LLC, which held exploration licenses for Blocks 4 and 5, has terminated its oil exploration activities in Malawi.

Rak Gas has become the last multinational oil search firm to pull out of Malawi following another Asian firm Pacific Oil and Gas (Block 6), South Africa’s Energy for Africa (Block 1), and recently Hamra Oil (Blocks 2 and 3).

Country Manager for Rak Gas Martin Kansichi Banda confirmed to Mining & Trade Review that just like Hamra Oil, Rak Gas has notified the Ministry of Mining that it is pulling out of Malawi because it is difficult to mobilise equipment and human resource for oil exploration in Malawi due to travel restrictions that countries are enforcing to fight the coronavirus (Covid-19) pandemic.

“Oil exploration programmes demand that we mobilise equipment and experts from overseas and this is difficult due to boarder restrictions countries are enforcing to fight Covid-19,” said Banda.

He said currently the Rak Gas Malawi office is settling all its taxation obligations to wind up activities with a clean book.

Commenting on the development, Chairperson for Natural Resources Justice Network (NRJN) Kossam Munthali said the relinquishment of the licenses by the oil and gas companies may not be related to Covid-19 but that as the country, Malawi is not ready in that direction in terms of issues to do with legislative environment.

Munthali said the country might be lacking direction in the oil and gas sector due to the legislative framework which is very outdated. 

He said: “You may recall; these are the same companies that signed Petroleum Sharing Agreements less than a week to elections in 2012 and as Civil Society Organizations (CSOs) we were very shocked in terms of timing.”

“So this have told us that what they wanted is unachievable. They are only sending a signal to say we were not ready as a country.”

“I also hope wherever they go they will not speak bad of this country. If they were frustrated, then the government needs to do some setting and see how we can move.”

Munthali stressed that the country requires serious investors that can express demonstrative investment to sustainably exploit the minerals for the benefit of Malawians and not only for their own selfish course.

He also in order to attract the right investors, Malawi needs proper legislative architecture which is conducive not only to investors but also the people of the country.

Munthali said: “Petroleum Exploration and Production Act that we are using today is so archaic and dirty and is not speaking to the current practices.”

“The 1983 paper is a long overdue, we just need to quickly to go back to the drawing board.”

“This should be a wakeup call to the government to expedite review of the legislative framework.”

He also said though the country might not have serious investors for oil and gas, the upstream petroleum industry still be there and still belong to the nation.

He said: “Let me also remind the government that they need to provide us with figures on how much these companies have been contributing to the government through Petroleum Training Funds.”

“We need to know how we have managed to utilize these funds.”

Munthali said the last time he checked the records the companies were paying US$50,000 per block every year to the Malawi Government.

Coordinator for Chamber of Mines and Energy Grain Malunga commented that though the oil and gas investors have closed offices in the country, Malawi is still holds prospects in the future of upstream petroleum.

Malunga also said when the Ministry of Mining grants relinquishment certificates to the companies, it will have an opportunity to re-demarcate the big blocks.

“New companies will come in under re-demarcated exploration blocks. Good for Malawi. The blocks were too big,” Malunga said.

Meanwhile, the Ministry of Mining is still in the process of assessing whether the companies have met all obligations with both the government and local communities to be granted cancellation certificate.

But Minister of Mining Rashid Gaffar told Mining & Trade Review in a recent interview that government has no intention to block the companies from relinquishing the licenses.

Government says it is in the process of introducing new banana plant varieties to regain the glory that the crop lost to Banana Bunchy Top (BBTD) virus, which ravaged 11 countries in the sub-Saharan Africa in 2016.

Agriculture Minister, Lobin Lowe, said the districts of Mulanje and Thyolo, famous for some of the lost naturally-flavored varieties, will be case studies on the effects of BBTD and how the banana virus disrupted livelihoods as imported species dominated the local market.

In Mulanje alone, the disease affected 6,000 hectares of land, affecting 185,000 farming households.

“The Ministry is lobbying farmers in affected areas to uproot all bananas from their farmlands in order to replant new disinfected ones,” he said explaining that the process has, however, been facing resistance from some farmers who were used to the old variety.

Lowe said that to ensure that its production is doubled, the ministry will be introducing the new crop in other districts while using the two districts as trial epicentres.

A study by the Food and Agricultural Organization (FAO) of the United Nations shows that, in 1999, Malawi registered a sharp increase in the production of the banana crop from 93,000 tons in 1998 to 300,000 tons.

Figures from the World Bank show that Malawi earned more than $6.6 billion from banana sales in 2015, before production dropped sharply due to Banana Bunchy Top Virus.

BBTD was first detected in Nkhata Bay, where it is believed to have been brought by smugglers. Infected plants are dwarfed from their early growth stages and do not bear fruit.

Malawi President Lazarus Chakwera says his administration is determined to scale-up transport infrastructure development projects in the country in order to attain job, wealth and food security creation agendas.

Chakwera cited in his speech themed   “Accelerating the Change Malawians Fought For” presented when he opened the third meeting in the 49 session of parliament and the 2021/2022 budget meeting in Lilongwe.

The president explained that improved transport infrastructure is part of the three delivery accelerators that the current administration will invest time, resources, and energy in to speed up the realization development agendas.

Chakwera said: “Transport infrastructure and public works has been identified as an accelerator of economic activities. There can be no exchange of goods and services without transport infrastructure.”

“In the next financial year, my Administration will commence construction and rehabilitation of several road projects including:  Expansion to dual carriageway of the M1 road from Crossroads Roundabout to Alimaunde in Kanengo, Lilongwe at a total cost of US$25 million through a grant from the People’s Republic of China.”

He also announced that government intends to expand to dual carriageway M1 Road Section between Lilongwe Hotel and Lilongwe CCAP estimated to cost about US$ 30 million with a grant from the Japanese Government and the stretch between Lilongwe Hotel and Crossroads Roundabout will be financed locally.

Government is also planning to rehabilitate M1 Road from Kamuzu International Airport Junction to Mzimba Turn Off and from Kacheche to Chiweta at an estimated cost of 195 million Euros co-financed by the European Investment Bank and the Malawi Government as well as Nsipe – Liwonde Road at an estimated cost of US$30 million financed by the African Development Bank.

Chakwera said: “My Administration will use part of the MK1 trillion Infrastructure bonds which will be raised on the local market to rehabilitate and upgrade eight roads.”

Among the roads to be refined from infrastructure bonds include; Nsanje – Marka Road – Completing upgrading to paved 28 kilometres; Dzaleka – Ntchisi – Mpalo – Malomo Road upgrading to paved road covering a distance of 70 kilometres and the M5 Balaka Market – Kaphatenga – Dwangwa Mukwiya (Nkhatabay) – rehabilitation covering a distance of 469 kilometers

“We will also commission the design and construction of the other stretch from Edingeni- Kamchocho-Euthini-Mpherembe-Rumphi as this road has a huge significance in this agricultural rich area,” he said.

On rail transport, the President stressed that his administration will resuscitate the Sena Corridor Railway from the Port of Beira in Mozambique to Limbe in Blantyre. The project will involve rehabilitation and upgrading of the 201 kilometre Limbe – Marka railway section.

Chakwera said: “The funding for these 40 works will also come from the MK1 trillion Government bond. In addition, my Administration will prioritize the construction of the Salima-Tunduma Railway-line under the Build Operate and Transfer Model following review of the relevant laws to make this happen.”

“Meanwhile, a feasibility study of this railway will start as a matter of urgency. Still on railway lines, we will also commence construction of a 170 metre long Rail – Road bridge across the Ruo River.”

On water transport services, the President announced that government will finalize the construction works on a MK10 billion Port at Likoma Island which will include a landing facility at Chizumulu Island.

He also said his government is planning to resuscitate local aviation industry through establishment of the Malawi Civil Aviation Authority to regulate the air transport sub – sector.

“We will have a fully-fledged Civil Aviation Authority by June 2022, my administration is determined to bring back the glory that our flagship airline once enjoyed and we will recapitalize Malawi Airlines.”

Meanwhile government is revising the National Construction Industry Act of 1996 and its subsidiary regulations to be in line with African Union’s Agenda 2063 and the Africa Continental Free Trade Area.

Government is expected to enforce Malawian construction firms Order of 2014 which requires foreign firms to either partner in a Joint Venture arrangement or subcontract at least 30 percent of the works by volume or value to local Malawians.

Minister of Agriculture Lobin Lowe says he is impressed with how the multimillion dollar Agricultural Commercialization Project (AGCOM) is fairing in commercializing local daily farming in the country.

The Minister made the remarks on Wednesday when he toured Thyolo district to appreciate dairy farming activities being carried out by Mangunda Milk Bulking Group.

Lowe expressed excitement at the knowledge and skills the famers had on how to sustainably run daily farming.

“Am really impressed with how the project is fairing in terms of the economic empowerment of farmers, especially women,” he said noting that the design of the program was to attain production sustainability through animal cross breeding and the provision access to markets through the producer and off-taker arrangement.”

But the minister admitted that the existing 3% withholding tax and pricing constraints suffocate farmer’s business growth. He then promised that his ministry will consult widely to address the two issues.

On the withholding tax, he indicated the need to revise the 3% tax deduction arrangement since government expanded the tax band of withholding tax to be subjected to income of over K100-thousand.

According to a snap survey conducted around local retail outlets by the Milk Bulking group, milk farmers yield less when compared to the profits made by an off-taker. It was revealed that an off-taker sells a litre at K1,200 yet he purchases the same milk at Mk210 per litre.

Lowe asked the group to put its house in order as it looks in the possibility of facilitating the acquisition of milk processing unit so that the farmers can reap meaningful returns from their labour.

He added that ministry, through the department of Animal Health and Livestock Development, is currently in the process of analyzing a piece of legislation that will facilitate establishment of a Milk and Milk-Product Board, which will, among others, negotiate prices on behalf of the local farmers.

In his remarks, AGCOM National Coordinator Dr. Teddie Nakhumwa said the project’s development objective is to increase commercialization and competitiveness of agricultural value chain products in crops, livestock and fisheries.

He said it intends to rectify fiscal constraints encountered by small and medium scale farmers such as poor access to organized markets, poorly organized farmers and farmer groups, poor access to competitively priced finance and poor market infrastructure.

“The project provides 70% matching grants for the purchase of capital equipment and also insures that farmers lend from commercial banks to finance operations by guaranteeing 70% of their loans,” he said adding that the project also provides public infrastructure through connecting producer organisations to power, irrigation and road infrastructure—in what is known as Last Mile Infrastructure.

The project only supports producer groups that have formal arrangements with off-takers to promote a business culture among small and medium scale milk farmers.

And one of the project beneficiaries Elizabeth Mwalama, a 51 years old widow based in Chimwanga village T/A Naseta in Thyolo district hailed the project for helping in transforming people’s economic statuses.

“My life has been transformed through this project. Initially, I had no capacity to support my five children, but with the daily farming that was introduced to us through our milk bulking group, I can now afford a smile knowing my financial struggles are over” said Mwalama.

AGCOM has so far approved 45 PAs, out of which, 25 have already paid the required 30 percent contribution and are already accessing funds from AGCOM for implementation of the sub-projects. Over 400 hectares of land for local and foreign investments have been identified to secure an enabling business environment for PAs.