In this article, Frank Eagar-managing director and CEO of Sovereign Services Ltd, the company behind the new Kasiya rutile and graphite project outside Lilongwe-argues that that the project has the potential to transform and contribute significantly to Malawi's mining sector, generate jobs, pay royalties and taxes, generate economic and secondary economic growth whilst improving rural livelihoods.
It is exciting to be part of a project that will unlock the world's largest known natural rutile deposit, containing an estimated 17.9 million tonnes of natural rutile. Rutile is the purest form of titanium dioxide (TiO2) at 95 percent TiO. This makes the Kasiya deposit a significant source of the titanium feedstock used in pigments for paints, plastics, paper and refractory ceramics. Approximately 10 percent of the world's titanium demand is driven by the high-tech aerospace and military defense industries. For this reason, titanium has been designated by the US, the EU and more recently NATO as a critical and strategic metal.
The strategic importance of the world's largest known natural rutile deposit and its contribution to Malawi's Vision 2063 if implemented successfully should not be taken lightly.
Kasiya falls within the category of a mega mining project and will take roughly six years to become a fully operational mine, however, and in the meantime several key elements need to fall into place to bring the prospect to reality.
As the project's timeline and complexities become clearer, it is essential to manage expectations and avoid unrealistic optimism.
We are making significant progress towards the completion of a Definitive Feasibility Study (DFS), finding committed investors, lenders and product off-takers, all in support of an eventual final investment decision to unlock the promise below the ground.
And even while this is all progressing, we are working to improve the lives of people within Kasiya and its surroundings. This includes training in climate resilient farming techniques to improve crop yields on the test site where we have rehabilitated earthworks, restoring it to agricultural land without farmers missing a single planting season, in a graphic demonstration of our two immediate priorities: community livelihoods and protecting the environment.
Malawi's mining industry showed some promise early in 2010 but has grown in fits and starts, with moments of highs and lows. Now, as the country stands poised to revamp its mining sector, it is crucial to acknowledge the delicate balance between economic promise, and environmental and social responsibility.
We also need to understand the harsh realities of today's global mining industry and the age-old challenges of mineral exploration, geological surveying, the sheer expertise, risk capital, resources and time required to achieve an economic mineral discovery, and then turn a greenfield project into a fully operational - and feasible - mining operation for the benefit of all stakeholders.
How can Malawi harness the transformative power of mining while safeguarding the well-being of its people and its environment?
As we embark on this journey, it is time to separate the hype from the reality and to chart a course that balances hope with prudence and promise with protection.
Inclusive Investment
Located in the Central Region of Malawi, in Lilongwe District, the proposed Kasiya rutile and graphite project being developed by Sovereign has been generating significant excitement and anticipation throughout the country. At the local administrative level the project area is governed by four traditional authorities, covering Khongoni, Kabudula and Kalolo in Lilongwe District, and Kayembe in the Dowa District.
The project has the potential to deliver an enormous positive impact for the country, including skilled and semi-skilled jobs, as well as significant royalties and taxation. Due to the scale and size of the mineral discovery, Kasiya has the potential to deliver these benefits well beyond its initial 25 year life of mine. However, as with any mining project, environmental and social risks must be assessed and mitigated to ensure that the host communities benefit and the environment is protected.
The project is expected to create hundreds of jobs during the construction phase and over 1,100 permanent jobs during full-scale operations. To achieve this though, significant infrastructure in power reticulation, rail line connectivity, water storage and mine development need to be constructed with an estimated investment close to MWK2 trillion to reach full scale operations over a seven-year construction and ramp-up period.
One of Sovereign's key objectives is skills development and training to ensure the majority of these jobs are filled by Malawians as well as providing the opportunity for local contractors and business to participate in tender processes for future infrastructure development.
Stable and Attractive Policies
While the government and Sovereign are committed to expediting the project, it is crucial to acknowledge the scale and intricacies involved. The project's success depends on various factors, including regulatory approvals, environmental considerations, community agreements, market demand and a stable and attractive Malawian investment climate.
At the moment Sovereign is busy doing all the necessary engineering studies and permitting required to get this project off the ground.
We hope it is going to be one of the largest projects Malawi has ever seen and that it will be one of the biggest rutile and graphite producers globally.
This brings a lot of opportunity and responsibility, not just to Sovereign as a company but also to Malawi as a country. Mining projects of this scale generally creates significant secondary economic development, and if planned appropriately alongside the Malawian government, could have a substantial economic multiplier effect. Planning and implementation require careful consideration to ensure the well-being of local communities and the environment. Sovereign will not progress hastily if either will be unduly compromised.
These components are interrelated, and the project must have all those elements in place to succeed.
Environmental and Social Governance
The project's success is not solely dependent on its economic benefits. As the project progresses, it is important to maintain transparency and open communication between Sovereign, the government, and local communities.
The company has initiated a comprehensive Environmental and Social Impact Assessment (ESIA), which has already gone through its initial public consultation process with the engagement of well over 10,000 people and institutions. Once completed, the ESIA will provide a detailed evaluation of the project's potential impacts on the environment and local communities and identify mitigation measures to minimise potential disturbance. This is to help manage expectations, address concerns, and ensure that the project's benefits are shared equitably.
The procedure is a critical component of our project development process. It will enable us to identify potential risks and opportunities, and develop strategies to mitigate negative impacts and maximise benefits. The process involves extensive stakeholder engagement, including consultations with local communities, government agencies, and other interested parties. This is to ensure that the project is developed in a transparent and inclusive manner, and that the concerns and interests of all stakeholders are considered.
Value Addition and Local Content
The question about the downstream beneficiation of minerals in Africa, closer to where they are extracted, has been around for some time. This is no different in Malawi. Sovereign is highly supportive of efforts to expand the industrial base and capacity within the country, which will be a strong driver of employment creation and economic growth. The secondary economic activity brought about by a large-scale project such as Kasiya where energy, infrastructure, local content, skills transfer, SMME's are prioritised, will be the first step towards such long term development goals.
Over and above mineral deposits, key elements of downstream beneficiation include a highly skilled workforce, surplus low-cost energy, economies of scale, industrial capacity, attractive fiscal investment incentives and large competitive markets.
These require long term planning and industrial partnerships that will be necessary to better balance Malawi's economy between agriculture and industry.
Over 90 percent of Malawi's population live in rural areas relying on subsistence agriculture. National surveys estimate that crop production accounts for 74 percent of all rural incomes. The agricultural sector is the most important sector in the Malawian economy, accounting for about 39 percent of gross domestic product, employing 85 percent of the labour force and generating about 83 percent of foreign exchange earnings.
We are committed to working with local communities, the government, and other stakeholders to ensure that our project benefits as many Malawians as possible so we can take some of the first steps towards these long term development goals. From a social investment perspective, we are doing a lot early on - much earlier than you would normally expect from a mining project at this stage of its development. We are about implementation and action.
Improving Livelihoods
One of our key focus areas of livelihood restoration is Conservation Farming. Conservation Farming is a climate resilient farming method which promotes minimal soil disturbance and improved soil nutrients.
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In Lilongwe District where the project is hosted, smallholder subsistence farming accounts for 344,353 hectares of arable land, with estate land holding comprising only 11,692 hectares, representing a mere 3 percent of the total arable land. Excessive soil disturbance, soil erosion, climate change, food pressure and population growth are all contributing to a decrease in soil conditions and a negative growth rate in annual land carrying capacity.
After achieving more than 300 percent yield increases during a 90-farmer pilot phase in 2023/2024, we have now increased the participants to 350 farmers for the current planting season. Initial indications are that farmers will achieve more than 400 percent yield increases. This all while soil conditions are being improved through minimal soil disturbance. The objective is to roll this out across the project-affected area, combine the programme with Kasiya's secondary economic impacts and firmly align with Malawi's 2063 vision development goals.
Continuous stakeholder engagement indicates a real need from communities to improve the way they farm, enabling them to be self-sufficient throughout the whole year.
Ultimately Sovereign is a mining company, but we want to mine in a responsible way and leverage our infrastructure and develop partnerships to create a smallholder farmer economy and secondary industry.
Stakeholder Engagement Remains Key
While the Sovereign exploration project in Malawi offers tremendous potential, it is essential to manage expectations and acknowledge the complexities and timelines involved. This will ensure that the project's benefits are realised in a responsible and sustainable manner that benefits all stakeholders.
Speaking during the parliamentary hearing Parliamentary Committee on Industry, Trade and Tourism, chairperson Paul Nkhoma said the government of Malawi had also expressed its commitment to ensuring that the project was developed in a responsible and sustainable manner.
Sovereign will continue with its widespread and transparent community engagement through which we engage with almost 15,000 people per quarter to ensure affected people remain informed and up-to-date as to the status of the project and its future timelines and implementation.
Ends
Frank Eagar managing director and CEO of Sovereign Services Ltd
