LILONGWE, Jan. 22 (Xinhua) -- The Malawian government on Tuesday launched a Mining Governance and Growth Support Project to enhance the southern African country's economy within the framework of President Joyce Banda's Economic Recovery Plan (ERP).
The project, according to President Banda, is one way of diversifying the country's agro-based economy and that it is expected to contribute significantly to both the GDP and foreign exchange earnings.
"Before 2009 contribution of mining to GDP in Malawi was at 3 percent but it rose to 10 percent after 2010 due to the opening of the Kayelekera Uranium Mine," said the president in the capital city Lilongwe.
"The contribution of the mining sector is expected to increase to at least 20 percent of the GDP by the year 2016," the president added.
She said it was due to this projection that she detached mining from the Energy and Mining Ministry and made it a stand-alone ministry so that the industry gets all the needed focus as part of the ERP.
The project will among other things, facilitate the development of infrastructure for generation and distribution of reliable geological information and it will also facilitate the development of policy instruments to steer good governance and growth of the sector.
The World Bank (WB) and the European Union have since hailed the establishment of the project, saying if implemented, Malawi's economy could transform in no time.
"Malawi has a lot of mineral deposits and if the country could properly invest in this sector the country's economy could boost," said EU Ambassador to Malawi Alexandar Baum, citing countries such as Norway and Zambia as best examples of how their economy grew through mining.
WB Country Manager to Malawi Sandra Bloemekamp appealed to the Malawian government to put in place sound policies that would attract investors in the sector.
She called upon all players in the country's mining sector to embrace transparency saying without it investment in mining would be less meaningful.
Development partners such as the WB, France and the EU have made financial commits of 25 million U. S. dollars, 12.7 million dollars and 5.2 million dollars respectively to the mining sector in Malawi.
There are a number of mining activities taking place in Malawi, but the major and operational one is the Karonga Kayelekera Uranium Mining owned by Paladin (Africa) Limited of Australia.
Another Australian company Global Metals and Mining is conducting feasibility study over Niobium deposit in the northern district of Mzimba and it is expected to commence in 2014.
Other rare earths in various parts of the country are currently being explored by Nkango Mining Company of Britain but registered on the Toronto Stock Exchange.
According to available information, the company has discovered more than 31 million tons of ore with rare earth minerals and it is believed to become a multi-billion-dollar mining project.
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