• Lindian Resources says Malawi export ban won’t affect Kangankunde project
• Malawi bans raw mineral exports to boost local processing and revenues
• Mining reforms aim to raise sector’s GDP share from 0.7% to 10% by 2063
  

Australian mining company Lindian Resources said Monday that its Kangankunde rare earths project in Malawi would not be impacted by the country's new policies requiring local processing of minerals.

The company's statement follows a presidential decree announced days earlier banning the export of raw minerals from the southern African nation. Malawi's government introduced the regulation as part of a broader push to maximize revenues from its mining sector amid several new projects under development.

Promoting Local Value Addition

The decree, signed by President Peter Mutharika, aims to "promote local value addition" and ensure mineral resources contribute substantially to Malawi's economic development. The export ban applies to all minerals extracted in the country, specifically targeting strategic minerals such as uranium, rare earths, and graphite. Crucially, the measure exempts products that undergo processing, refining, or any form of beneficiation within the country.

Lindian Resources is using this exemption to affirm the compliance of its Kangankunde project. The company plans to process the rare earths into a concentrate before export, noting this represents the "highest possible" level of value addition achievable in the country at this stage. A mineral concentrate is typically the initial stage of processing and is not yet a chemically refined or finished product.

Other mining companies operating in Malawi have yet to comment on the new policy. The country hosts several major projects in development, including Sovereign Metals' Kasiya graphite and rutile mine, Mkango Resources' Songwe Hill rare earths project, and the Kanyika niobium project. Additionally, Lotus Resources recently restarted the Kayelekera uranium mine.

Mining Sector Growth

These projects are expected to drive growth in Malawi's mining sector, which officials predict will account for up to 10% of national GDP by 2063. The World Bank reported in January that the sector contributed only 0.7% to GDP in 2023. By focusing on local transformation through the raw mineral export ban, the Malawian government is seeking to accelerate progress toward this long-term goal and align the country with a regional trend of resource beneficiation.

Similar policies are advancing in several other African nations. Zimbabwe is focused on local processing of lithium, while Guinea is encouraging mining companies to build bauxite processing plants, a key step in the aluminum value chain.

Such measures, however, risk eroding relations between governments and investors, depending on their implementation. The recent dispute that led to the nationalization of the Emirates Global Aluminium (EGA) bauxite mine in Guinea illustrates this risk. Furthermore, local mineral transformation presents several challenges, as noted in a report by Ecofin Pro on producing electric batteries in Africa. The report highlighted the need for countries to ensure a stable electricity supply for processing plants and have sufficient technical capacity. Malawi’s strategy for implementing its new policy, and its potential impact on the projects underway, remains to be seen.

Aurel Sèdjro Houenou