Malawi has temporarily banned the export of gemstones and precious minerals as it embarks on a major reform of its mining sector, the government announced on Wednesday. The move aims to enhance transparency and efficiency in mineral rights administration.
According to Mining Minister Joseph Mkandawire, the decision is part of an effort to ‘sanitise the mining sector’ as authorities review existing policies. The export freeze takes effect immediately and will remain in place until further notice, the ministry stated in an official announcement.
The southern African country, which is rich in uranium, rubies, and sapphires, has yet to fully benefit from its mineral resources, unlike some of its regional neighbours. The ban follows a broader push to ensure fair mining contracts and recover lost revenues from foreign mining firms.
Government orders review of mining contracts
The export suspension follows a directive from Malawi’s vice president to review all existing mining contracts, a process expected to take 21 days.
Malawi has been engaged in legal battles to recover unpaid taxes and royalties from international mining companies. Since mid-2022, the government has demanded over $309bn from Columbia Gem House, a US-based gemstone company, for alleged underpayment on ruby exports over the past decade.
The government claims that Nyala Mines Limited, a subsidiary of Columbia Gem House, paid only $600 in taxes, despite generating estimated revenues of $24bn from its Malawian operations. The case underscores the challenges of regulating foreign mining firms and ensuring that Malawi benefits from its natural resources.
Unlocking Malawi’s mining potential
Despite its resource wealth, Malawi’s mining sector contributed only 3.5 percent to the country’s GDP in 2023, according to the World Bank. However, industry experts believe that with better regulation and investment, the country could unlock significant economic potential.
A recent World Bank report estimated that between 2026 and 2040, Malawi’s mineral exports—particularly ‘green minerals’ like graphite and titanium—could generate up to $30 billion in revenue. These minerals are in high demand globally due to their use in renewable energy technologies.
The mining sector’s reform is especially critical given Malawi’s high poverty rate, with nearly 75 percent of its 24 million people living in extreme poverty, according to the World Bank.
As the government works to strengthen oversight, secure fair contracts, and recover lost revenues, the mining sector could become a key driver of economic growth in the coming years.
(with AFP)
