Licensing for Mineral Rights in Malawi
By Ahmed Mussa | Head of Legal -Transaction Services
Governing Law
Mining in Malawi is regulated by the Mines and Minerals Act No. 8 of 2019 (MMA) as read with its accompanying regulations. The MMA requires that for one to carry out any mining activity, they must first be conferred mineral rights in respect of minerals in/on land. The Ministry of Natural Resources, Energy and the Environment (the Ministry) is the government authority in charge of minerals generally responsible for minerals. The Minister is empowered to award mineral rights (licensing) to companies and individuals.
Types of Mineral Rights
The mineral rights to search for and extract minerals from the earth are acquired through the grant of licenses namely:
- Reconnaissance Licence – gives the holder a right to carry out a physical search for specific minerals on a specified license area;
- Exploration Licence – gives the holder exclusive rights to locate minerals within a license area and ascertain the availability, quality, quantity, and the economic value of the minerals sought;
- Retention Licence – gives a holder an opportunity to apply for a mining licence. An applicant for a Retention Licence must be a holder of an Exploration Licence.
- Mining Licence – gives a holder exclusive rights to extract minerals within a license area and sell them locally or internationally. Mining Licences have been divided into Medium-Scale Mining Licence and Large-Scale Mining Licence.
Qualification for Mineral Rights
To hold any of the above mineral rights in Malawi, you must meet the following eligibility criteria:
- An applicant must be a company, duly incorporated or registered as a foreign company in Malawi;
- An Applicant must have the technical competence and financial ability to fulfill license obligations;
- Directors or shareholders of the applicant must not have any prior criminal conviction; and
- The applicant must not have been a holder of a license that has been canceled.
Application Procedure and Requirements
- On an application for a Reconnaissance Licence, an applicant must make their application in a prescribed form and must furnish:
- their details;
- the exact boundaries and location of the proposed reconnaissance area;
- a sketch map of the proposed reconnaissance area;
- a copy of the applicant’s certificate of registration;
- a proposed plan and work program of the reconnaissance area;
- an indication of the minerals sought;
- proof of payment of application fees;
- a statement on the applicant’s financial; and
- technical resources or capability accompanied by a proposed work program.
2. An application for an Exploration License must have the following:
- their details;
- the exact boundaries and location of the proposed exploration area;
- a sketch map of the proposed exploration area;
- a copy of the applicant’s certificate of registration;
- a proposed plan and exploration work programme of the exploration area;
- an indication of the minerals sought;
- an indication of the period required for completion of the intended exploration work;
- proof of payment of application fees;
- a statement on the applicant’s financial; and
- technical resources or capability accompanied by a proposed work programme.
- applicant’s financial and technical resources statement;
- an employment and training of citizens plan.
3. An Application for a Retention License must be accompanied by:
- a schedule describing the coordinates of the proposed retention licence area;
- a sketch map showing the boundary of the proposed retention area;
- a copy of the applicant’s certificate of registration in Malawi;
- a copy of the applicant’s exploration licence to which the retention licence area relates;
- a statement justifying the application that provides all the information required under the MMA;
- a proposed retention work plan and estimated cost of implementation;
- proof of payment of application fees.
4. An application for a Medium-Scale and Large-Scale Mining License must be accompanied by:
- applicant’s certificate of incorporation in Malawi;
- details of the directors or officers;
- proof that the applicant has the technical competence to fulfill the licence obligations;
- proof of applicant’s financial ability or a credible plan to obtain adequate financing to fulfill licence obligations;
- environmental requirements approval supported by an environmental and social impact assessment report;
- a schedule, boundary survey and sketch map describing boundaries of the proposed mining licence area;
- an indication of the period for which the applicant seeks the mining licence;
- a copy of applicant’s exploration licence;
- a feasibility study report delineating the mineral deposits in the licence area;
- a report providing the name of each lawful occupier and landowner of lands located in, or partly in, the licence area;
- a description of plans and initiatives for planned, sustained economic and social development in the region and local communities affected by the mining operation, and in the case of a large-scale mining licence, any community development agreements that have already been approved;
- in the case of an application for a medium-scale mining licence a community engagement plan suffices;
- a mining operations plan;
- a mine site plan;
- a mine waste management plan;
- a rehabilitation and closure plan;
- a resettlement management plan;
- local content plan; a community engagement plan;
- a resettlement management plan;
- a business development assistance plan;
- proof of payment of a prescribed application fee or proof that the fee has been paid.
5. All applications for Reconnaissance Licences, Exploration Licences, Retention Licences, Medium-Scale Mining Licences and Large-Scale Mining Licences must be accompanied by:
- an Environmental Impact Assessment [EIA] report for the licence area carried out according to the Environmental Management Act No. 19 of 2017;
- the EIA report must inform the effects mining activities would have on the environment and proposed methods of alleviating such impacts on the environment;
- the EIA report is one of the key considerations for the Minister when exercising his discretion whether to grant or reject an application for a mining license;
- the EIA report must be prepared and submitted by an approved Consultant under the EIA Guidelines and must exhibit proof of public consultations with all stakeholders who may be affected by the mining;
Time Frames for Processing Licenses
The processing of licences is as follows:
- An applicant for a mineral right is required to submit their application to the Registrar of the Mines Department;
- The Registrar vets the applications to ensure compliance with and/or satisfaction of all necessary requirements;
- Once all requirements have been met, the applicant is required to pay the prescribed fees and file their application;
- The Date of payment of such an application is considered the date of submission of your application;
- The application is posted on the website of the Registrar via http://portals.landfolio.com/malawi/;
- From here the application is scrutinized by the Mineral Resources Committee (MRC) which meets every two months to assess such applications;
- Once the applications have been approved by the MRC, they are submitted to the Minister for signature;
- The Minister shall sign such licences within 45 Calendar days. In a nutshell, the practical time frame of processing licenses is 3 Months at most.
Associated Costs
The application fees for licences are as follows:
* Reconnaissance Licence MK100,000;
* Exploration Licence MK50,000;
* Retention licence fees are yet to be provided under new Regulations being a new type of licences;
* Medium Scale Mining Licence, MK100,000;
* Large Scale Mining Licence MK100,000
* Exploration Licence MK250,000 to MK400,00
* Mining Licences application fees range from MK500,000 to MK1,000,000
Conclusion
In conclusion, it must be pointed out that the application fees for the different types of mining licences are subject to change. Once the fees have been adjusted, we shall revise this business guide in order to align it with the new fees and/or costs.