Kasiya mine to generate K1.13tn annual revenue

By Kingsley Jassi:

Sovereign Metals, the company developing the Kasiya project, has predicted that an annual revenue of up to $645 million (about K1.13 trillion) will be generated from mineral exports from the rutile mine.

The mine is expected to run over an initial 25-year life span, with potential to extend to 75 years based on deposit estimates.

This means that the Kasiya rutile and graphite mine will become a major global titanium source and the country’s largest foreign exchange earner.

This is coming at a time Malawi is sailing through an industrial slowdown and balance of payment challenges impinging on the economy’s growth.

In an interview, mining expert Grain Malunga described the project as transformative for Malawi’s mining sector, projecting government revenue at 45 percent of the total $645 million annual revenue under standard mining regulations.

This could translate to approximately $290 million (about K497.8 billion) in annual government revenue through various taxes and royalties, heavily boosting both national income and foreign exchange reserves.

However, Malunga expressed concern over negative reactions to the company’s investor presentation, while advocating for increased local participation through stock market listing and direct government investment via the national mining company.

“Government is entitled to 10 percent free equity but it can increase the shareholding by investing in the mine, even if it takes a loan. We need the national mining company to be operationalised to have shareholding in the company,” Malunga said.

Nevertheless, Sovereign Metals indicates these pre-feasibility estimates may be revised following Rio Tinto’s entry as a 19.9 percent shareholder, potentially bringing enhanced operational and marketing efficiencies to the project.

Ministry of Mining officials, speaking off record, confirmed recent meetings with the company regarding mine development progress, though formal updates were unavailable.

But in a recent interview, spokesperson in the Ministry, Tiwonge Kampondeni said: “Causes of delays have been primarily associated with environmental assessments and securing community approvals, which have now been successfully navigated.

“The company plans to provide further updates on the pilot phase, product qualifications and the DFS in the coming months.”