By Collins Mtika

A nation rich in minerals, losing K25 million daily to illegal mining

Beneath Malawi’s rugged terrain and ancient waterways, a new economic future is emerging. Once defined by tobacco exports, the country is now turning its focus underground, to vast reserves of valuable minerals that could reshape its destiny.

Graphite, rutile, uranium, and rare earth elements, often referred to as “green minerals” due to their role in clean technologies like batteries and wind turbines, are drawing international interest.

Malawi is positioning itself as a critical player in the global clean energy supply chain. But transforming this mineral wealth into tangible national benefits has proven more difficult than anticipated.

“Malawi stands on the cusp of becoming a key supplier in the global clean energy and high-tech value chains,” states a 2025 report from the Export Development Fund (EDF).

Historically, mining contributed less than 1% to Malawi’s GDP. Today, it accounts for 3.5%, driven mostly by small-scale gold and gemstone mining. If large-scale industrial projects succeed, mining could generate more than 20% of GDP – though more cautious projections estimate 10% by 2063 or 12% by 2027.

At the heart of this transformation is the Kasiya project near Lilongwe, which holds one of the world’s largest undeveloped deposits of rutile and graphite. By the early 2030s, the site could contribute nearly half of the country’s mining export revenues.

The EDF describes Kasiya as “a transformational force in export diversification.”

Currently, Malawi’s total exports amount to less than US$1 billion annually. But with green minerals leading the charge, exports could reach US$3 billion a year by 2034 and generate up to US$40 billion cumulatively by 2040, according to World Bank forecasts.

Despite these optimistic projections, President Lazarus Chakwera has raised concerns about the sector’s lack of transparency.

“Our minerals are a matter of national security,” Chakwera said at the 2025 Mining Investment Forum in Lilongwe. “And there is no better security than putting things in the light.”

As part of its ATMM Strategy (Agriculture, Tourism, Mining, and Manufacturing), the government froze all mineral exports in early 2025 to conduct a comprehensive audit.

That audit uncovered serious problems: underreported gemstone exports, unpaid taxes, and potentially billions in lost revenue.

Authorities are now reviewing export permits, chasing unpaid royalties, and investigating a massive US$309 million claim tied to years of gemstone underreporting. While this figure is likely cumulative, it underscores the extent of alleged malpractice.

Though the moratorium disrupted operations, it signaled a stronger stance against corruption, smuggling, and tax evasion. The EDF praised it as a bold move to improve transparency.

Mining Minister Kenneth Zikhale Ng’oma defended the freeze as a necessary step.

He highlighted the formation of two new regulatory bodies – the Mining and Minerals Regulatory Authority and the Malawi Mining Investment Company – to restore investor confidence and strengthen state oversight.

Still, structural challenges persist.

Being landlocked, Malawi relies on long and costly transport routes through Mozambique and Tanzania to access seaports. Outdated infrastructure, power shortages, and limited financing options continue to hinder investment.

“As a landlocked country, Malawi’s export routes rely on long haulage… power supply is another bottleneck,” the EDF warned.

Ng’oma has pledged investment in rail, road, and digital infrastructure. However, delays in licensing and shifting policies remain major deterrents. Globe Metals, for example, waited years for its Kanyika licence, delaying vital investment decisions.

Much of Malawi’s gold and gemstone mining remains informal. Most artisanal and small-scale mining (ASM) gold is smuggled into neighboring countries, costing the government millions in lost revenue each year.

To address this, the Reserve Bank and EDF introduced a gold-buying program that offers fair, local prices to miners. A national ASM policy is also in development, aimed at legalizing operations, increasing traceable exports, and promoting environmentally safer practices.

“Formalizing ASM… will boost production and export volumes,” the EDF report states.

The growth of the mining sector has also led to rising tensions in rural communities, where promises of development often go unmet.

In Mbirima village, Chitipa District, the Ilomba Mining Company arrived over 20 years ago with promises to build a school, clinic, roads, and a mineral processing plant. None of these promises were fulfilled. Instead, locals report environmental degradation and valuable granite being exported with little local benefit.

“We are not happy because the mine isn’t benefiting us,” says Mercy Mpoha, a former ward Councillor.

Community frustrations led to protests, a court case, and the impounding of a truck carrying soda light granite. Although a court injunction was later lifted, the company’s expired licence reignited public outrage.

Civil society organizations, including the Natural Resources Justice Network, have opposed the renewal of Ilomba’s licence. In Parliament, Werani Chilenga, Chairperson of the Natural Resources and Climate Change Committee, pointed out that the company has only built two boreholes in 25 years.

Critics also accuse some foreign investors—particularly Chinese nationals, of illegal mining activities in Rumphi and Mzimba. In 2023, a local court fined three Chinese nationals K7 million each for illegal mining. But enforcement remains inconsistent.

President Chakwera has acknowledged that Malawi has not meaningfully benefited from its mineral resources, blaming both foreign exploitation and domestic mismanagement.

While the Mines and Minerals Policy promotes sustainable development and community benefits, implementation is weak. Regulatory agencies lack funding and staff, licensed companies often ignore their social obligations, and illegal operations thrive.

It’s estimated that Malawi loses K25 million every day to illegal mining.

To promote transparency, the country – an Extractive Industries Transparency Initiative (EITI) member since 2015 – is establishing a sovereign Mineral Wealth Fund to ensure mining revenues support national and local development.

“Malawi could consider modest resource rent taxes… and allocate a percentage to a Mineral Wealth Fund or to local development,” the EDF suggests.

While some industry leaders remain optimistic, others advise a more cautious, long-term approach.

Maxwell Kazako, President of the Malawi Chamber of Mines and Energy, remains hopeful:
“If we secure good and productive mining development agreements, extract in a way that protects our environment, and create jobs, then mining can be a useful tool to empower everyone.”

But as World Bank Country Manager Firas Raad cautioned: “In terms of job creation, we have to remember that mining is not labour intensive.”

He advised the government to manage public expectations and focus on long-term value addition.

For now, agriculture—especially tobacco—remains the backbone of Malawi’s economy. But mining is no longer just a side bet. It has become a central gamble in the country’s quest for transformation.

Collins Mtika produced this story for the Centre for Investigative Journalism Malawi (CIJM), as part of the Centre’s aim to expose corruption, hold power accountable, and amplify marginalised voices. CIJM: ‘Uncovering the Truth. Empowering change’.