AMN - Malawi tunes up on contract negotiations - comment by Yolanda Torrisi

Malawi is making positive moves in a quest for its extractive industries to optimally and equitably benefit all citizens. In this regard it aims to become one of the model mining countries in Africa.

Mining reforms form an important part of the country’s new direction led by President Peter Mutharika, Malawi is developing a Country Mining Vision (CMV), inspired by the Africa Mining Vision (AMV), an initiative adopted by African governments in 2009 to ensure that natural resources form inclusive sustainable foundation for the continent’s socio-economic development.

The country is also seeking to increase its skills in negotiating mining development agreements (MDAs) with more experienced mining companies in a bid to ensure more equitable benefits for everyone.

The government is undertaking these measures following widespread public concern that the country is not benefiting adequately from exploitation of mineral resources because government officials are unable to successfully negotiate win-win deals with multinational mining firms.

Minister of Natural Resources, Energy and Mining Bright Msaka said for more than a century of mining many African countries, including Malawi, had not derived maximum benefits from mining in terms of soliciting tangible sustainable development outcomes, including improved livelihoods of people due to several complex causes, including inadequacy in negotiating MDAs.

He said MDAs were often highly complex and many African governments were less informed about the technical details and geological endowments than the mining companies which came to negotiate, backed by highly qualified international lawyers and reputable technical experts.

Malawi is being supported in addressing this issue by participation in an African Minerals Development Centre (AMDC) two-year pilot project ‘Strengthening the capacity of African governments to negotiate transparent, equitable and sustainable contracts in the Extractive Industries for broad-based sustainable growth and socio-economic development’, which is also being implemented Chad, Congo, Equatorial Guinea and Niger.

The project encompasses training programs for stakeholders to competently negotiate deals with mining investors.

In Malawi it included a five-day training workshop, ‘Best Practices for Negotiating and Drafting Mining Contracts’ financed by the African Development Bank Group (AfDB) and which attracted participants from across the government and from the private sector. It was run by AMDC in partnership with the African Legal Support Facility (ALSF) and International Senior Lawyers Project (ISLP) under the AMV umbrella.

Bright Msaka said it was timely that the workshop was conducted as it would technically and legally equip and empower the country’s negotiating team to ensure sustainable development and exploitation of mineral resources, while also supporting the aims of CMV.

Senior Mining Engineer and Coordinating Officer of AMDC/ALSF led projects in Malawi’s extractive sector, Cassius Chiwambo, said Malawi would benefit hugely from the capacity building project, which covered all critical areas of MDAs including fiscal, environmental and technical.

Chiwambo concurred with Msaka on the timeliness of the project saying Malawi may soon start engaging mining companies in contract negotiations. “There are already several projects in advanced stages of their exploration and we hope this training will equip us to engage the mining firms. Possibly, there will not be talk of Malawi getting a raw deal on a mining investment in the future.”

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the African continent. Contact:yolanda@yolandatorrisi.com