The Malawi government has hired international legal experts to assist it in negotiating a ‘win-win deal’ with Australian company Globe Metals & Mining, which has applied for a licence to mine niobium at Kanyika, in the north of the country.
Mines Minister John Bande says the deal with Globe will form the basis for future deals with mining companies.
Globe plans to invest $300-million in the Kanyika project, which will be Malawi’s second major mining investment, after the Kayelekera uranium mine, which was commissioned in 2009 and is owned by another Australian firm, Paladin Energy.
Globe has already presented a draft development agreement to the Malawi government, which, Bande says, is being scrutinised before negotiations start.
Bande says the Malawi government has proposed a 5% royalty from the project rather than the 3% royalty received from Paladin’s Kayelekera mine.
The Malawi government is also pushing for a 30% local shareholding in the mine – up 15% in Kayelekera.
“We hope the international legal experts we have invited will help us in negotiating effectively . . . and, in the long term, building capacity in the Malawi government in terms of negotiating mining deals,” says Bande.
Mark Goodrich, of International Senior Lawyers Project (ISLP), who has been engaged by the Malawi government to scrutinise the Kanyika draft development agreement, tells Mining Weekly: “Governments all over the world have to create a win-win situation with mining companies.”
The Kanyika project is scheduled to produce 3 000 t of niobium oxide and 150 t of tantulum a year.
Niobium is mainly used in the manufac- turing of special steels for gas pipeline construction. It is also used in the welding of stainless steel and other special steels as well as in the nuclear, electronics and optics industries. Niobium also has a surprising role in numismatics (coin) production because of its low toxicity and unusual ability to change colour through anodisation.
World demand for special steels – including niobium – is certain to escalate in coming years. Global niobium production is currently around 63 000 t/y, with 92% (58 000 t/y) coming from Brazil’s Araxa and Goias mines and 7% (4 400 t/y) from the Niobec mine, in Quebec, Canada.