Malawi loses US$700 million a year to gold smuggling

The artisan miners captured in Kasingu during Mining Minister’s tour

* Government records show that the gold is not sold through government systems despite that there are many gold mining hotspots across the country

* The loss could be reduced by establishing formal buying points closer to mining communities

By Wanangwa Tembo, Malawi News Agency (MANA)

Malawi could be losing more than US$700 million worth of gold to smuggle every year, highlighting the scale of the challenge facing government as it moves to bring artisanal mining and gold trading into the formal economy.

Malawi Mining Investment Company (MAMICO) Chief Executive Officer Prof. Leonard Kalindekafe said investigations into international markets indicated that large quantities of Malawian gold were leaving the country outside government-controlled trading systems.

Despite the fact that there are many gold mining hotspots across the country, government records show that the gold is not sold through government systems, Kalindekafe said.

He was speaking on Thursday when Minister of Mining Thoko Tembo visited Chimbiya in Kasungu, where hundreds of people are engaged in artisanal gold mining.

Kalindekafe said the loss could be reduced by establishing formal buying points closer to mining communities, making it easier for miners to sell their gold legally and at competitive prices.

MAMICO, in collaboration with selected banks and the Ministry of Mining, plans to establish gold trading centres in mining hotspots, alongside mobile buying units: “We want to remove the incentive for people to sell to smugglers,” Kalindekafe said.

The initiative, expected to start in September, will also support registered mining cooperatives with training in safe mining, accounting and environmental protection.

Minister Tembo said the government was encouraging artisanal miners to form cooperatives so they could access machinery and improve their operations, while also creating stronger links with formal gold markets.

“This is the only way they can access heavy machinery for their mining projects,”Tembo said, adding that the Export Development Fund (EDF) — a government-owned gold-buying company — is one of the channels through which miners can sell their gold at competitive prices, with the Reserve Bank of Malawi (RBM) also expected to facilitate formalisation of the trade.

Tembo further raised concerns over the use of mercury and cyanide by some miners, saying the substances pose environmental risks and underscoring the need for safer mining practices.

Member of Parliament for Kasungu East Felix Nkhoma called for miners to be provided with appropriate equipment and safety training, while Traditional Authority Chitanthamapiri said gold mining could provide an alternative source of income as tobacco production declines.

The mining sector currently contributes about 1% to Malawis economy and is identified as one of the key pillars of MW2063 alongside agricultural commercialisation.