…looters colluding with Mining officials
..K2 billion worth of gemstones undervalued to k2 million
..Chimwazulu in free for all mining
Everyday, precious stones underappreciated by the Ministry of Mines officials are departing Malawi that The Investigator Magazine has uncovered that gemstones valued at K2 billion on an global market were only assessed at K18 million (US$10,000) and validated by the department.
Minister of Mines Ken Zikhale Ng’oma found himself caught with influential political and public forces when he attempted to enforce the law in February, that within 48 hours- the Ministry issued four press announcements each contradicting the other before eventually retracting all of them.
The Ministry, initially declared the suspension of all gemstones and minerals export licenses, before coming down to say only gemstones and minerals awaiting a review. Hours later the Ministry altered its position to say it was only suspending new applications, before completely removing any reference to any “suspension” “ban” or anything.
In short, mining business would continue uninterrupted. That has been the case of Malawi’s minerals, which have rarely benefited the nation but a few cartels, politicians and public officials. There is no visible impact of Malawi’s mineral sector in communities the valuable stones are being mined.
Malawi’s underground wealth
Malawi is situated on the Neoproterozoic Mozambique Belt, which extends from Kenya through Tanzania, Mozambique, Malawi, and Madagascar. This geological formation is known for its plentiful gemstone deposits.
Despite this potential, Malawi remains one of the poorest nations in Africa.
Malawi gemstones currently being mined include chalcedony, apatite, aquamarine, amethyst, citrine, garnet, jade, tourmaline, sunstone, sodalite, rose quartz, ruby and sapphire. Other major minerals being explored or mined include coal, uranium, rare earth, gold grains, niobium and rutile.
Most locals mine without permits and middlemen buy them at low rates and sell them to foreign nationals who collect them and export them. There are small mines across the country such as gold sands in Chitipa, gemstones in Thazima (Rumphi), Most parts of Mzimba, Nkhatabay, Nkhotakota, Kasungu, Dowa, Lilongwe, Dedza, Mangochi, Balaka, Ntcheu, Blantyre, Phalombe, Zomba, Mulanje, and parts of lower shire.
Mzimba and Ntcheu are the major mining regions but without any visible associated developments with Mzimba being the home of aquamarine, amethyst, tourmaline, and rose quartz are mined from here.
Ntcheu which borders Mozambique is a region in which rubies and sapphires are found, more specifically, at Chimwadzulu Hill, the location of the largest known corundum deposit in the country. Rubies were discovered in 1958 but successive mining firms including at one time the defunct state-owned Malawi Development Corporation (MDC) had significant stake and the ruby was marketed as Nyala ruby. Ntcheu is considered the most gemstone-rich area, since in addition to corundum, it also has tourmaline, quartz and sunstone, but like Mzimba, it has nothing to show within its communities as a result from the natural resources which include gemstones, precious metals and industrial resources.
But corruption, political patronage and cartels are getting wealthy over natural resources.
Dutch national apprehended with 1.5 tons of gemstones valued at K2 billion
The cartels operating in the mining industry are quite well-connected, having recently facilitated a Dutch national in declaring 1.5 (1500kgs) of gemstones, appraised at K18 million. The export licenses had been signed, and the shipment was on the verge of departing Malawi.
The cartels comprise holders of mining licenses, high-ranking department of mines officials, including directors, as well as personnel from the Office of the President and Cabinet, politicians who demand the issuance of licenses, and even members of the Malawi Police and Immigration officials stationed at borders and airports, along with some doba dobas in mining cooperatives.
“It’s a large cartel, operating for years with a well-established network. The true value of the minerals exceeded K2 billion and this was thoroughly certified. The most shocking aspect is that none of the exports has ever requested the CD2 export forms from the Reserve Bank of Malawi,” revealed a source familiar with the situation.
When alarms were raised, the Dutch national was assisted in escaping Malawi while the issue was covered up. “The mining department issues export licenses without following proper procedures, and interestingly, despite the products being sold on the international market, the Department of Mines collects the fees in Malawi kwacha, which are significantly low,” assessed a mining expert.
Interestingly, other governmental agencies such as the Malawi Communications Regulatory Authority (MACRA) issue licenses in equivalent US dollars. “The government collects 20% as royalties, but in kwacha. Therefore, those K18 million undervalued gemstones resulted in Malawians only receiving K3.6 million instead of an estimated K400 million if the actual value had been taken into account. This means Malawians were set to lose K396.4 million in a single shipment; what about all the years before this?” questioned another expert.
The Investigator Magazine reported on a fraudulent Sheikh Al Qassim deal orchestrated by Secretary to the President and Cabinet Colleen Zamba, in which the company was granted a mining license in Kasungu, expedited by the Head of Public Service.
With such influential and untouchable figures occupying pivotal roles, Malawians should not expect any benefits from the mining sector. The same situation is occurring at the Ruby and Sapphire mine located at Chimwazulu in Ntcheu.
AG Chakaka Nyirenda’s K600 trillion mine being looted
Attorney General Thabo Chakaka Nyirenda made global news when he asserted close to K600 trillion from US-based Columbia Gem House for unpaid taxes and royalties for rubies extracted from Chimwazulu mines in Ntcheu.
The Investigator Magazine can now disclose that the mine is being plundered, excavated, and its rubies are exported by unidentified individuals who are not remitting anything to the government.
But that is the essence of the mining sector in Malawi, where influential cartels linked to the Malawi Congress Party (MCP) are now dominating the sector. The Department of Mining is at the forefront issuing export certificates for rubies and sapphires, providing essential foreign exchange that never returns to Malawi.
Malawi’s government made headlines in international media when it demanded an astonishing sum of $309bn in unpaid taxes and royalties from a US-based gemstone company, Columbia Gem House, a family-owned business which claimed at the time to adhere to fair trade practices but labelled the accusation as “baseless and defamatory.”
The amount being sought from the company is nearly 300 times Malawi’s national debt of around $1.2bn, and 22 times its Gross Domestic Product (GDP) of $14bn. Speaking to the BBC Focus on Africa podcast, Nyirenda stated that Columbia Gem House had been underreporting the value of rubies it had exported from Malawi.
He noted that “some of the evidence that we will be using comes from Columbia Gem House itself, such as declarations they have made in the US, and what they have reported on their website, which they have now removed.” “The amount is not just [for] one year; it extends over 10 years. It also includes the interest,” Nyirenda told the BBC.
Columbia Gem House contended that the government’s calculations do not add up. The $309bn assertion “implies Malawi has somehow produced and exported trillions of dollars’ worth of coloured gemstones,” the firm said in a statement. “They haven’t achieved this by any stretch of the imagination,” it added. Columbia Gem House stated that it does not operate in Malawi but acquires its gemstones from Nyala Mines, a Malawian-owned company in which the government has a 10% stake.
However, a visit to Chimwazulu shows that the new owners are unclear, as a company called Mwalawanga Mining Ltd appears to have assumed control of the mining of ruby and sapphire. Still, no documents are available regarding the exports it has made since taking over the operations.
“It is peculiar that the government is pursuing what it terms lost taxes but is not collecting anything from this Mwalawanga group, which is said to be backed by a Bangladesh national but owned by politicians affiliated with the MCP administration,” our source claimed.
The only documentation available on the company is a letter signed by a nameless Director to the Inspector General of Police, requesting security, including a dedicated taxpayer-funded police unit to enhance security.
The letter was penned on 11 October 2024. “After making global headlines, the Malawi government should be able to declare how much it is now collecting from ruby and sapphire from Chimwazulu because mining has not ceased. The unfortunate reality is that someone named Omar Abdeen mysteriously secured a license for this mine, which is 10% owned by the people of Malawi. Nobody clarifies where the ruby and sapphire funds go. You will never hear it in SONA or official documents,” charged a senior mining expert.
“Thabo Chakaka Nyirenda’s claim was official acknowledgment that the country has been exporting ruby and sapphire from Ntcheu. How much and where the money goes remains a mystery,” stated an official from the Treasury.
And Lutile in Kasiya, coal at Kamkwamba being hijacked? In our next mining story, we explore how influential figures in the Malawi government are acquiring stakes in some of the largest mining projects. Ministers have been spotted by workers at a mining firm collecting cash near Kamuzu Central Hospital roundabout in Lilongwe, we reveal who they are.
Reverend Chakwera’s administration stinks of corruption- Editors view
Very little has come out of Malawi since a self-proclaimed man of God took the reigns of power. We have six stories from Akatswiri Holdings adventures in Mulanje connected to the President himself to mining deals his SPC Zamba and Energy man Alfonso Chikuni wants to give away to a Nigerian Chief, a fake Sheikh in Dubai and hordes of cabinet ministers lining at an office near Kamuzu Central Hospital to receive alms. This administration stinks of corruption and Malawi will be better off when they lose this coming September
