Malawi Mines Sector Faces Slower Growth Than Government Hopes
World Bank Forecasts Modest Gains, Citing Project Risks
Malawi’s ambitious plans for its mining sector to drive economic growth are facing a reality check, with the World Bank projecting a more gradual expansion than the government’s ambitious targets. The nation’s Vision 2063 aims for mines to contribute up to 10% to GDP by 2030, but new World Bank analysis suggests this figure could be closer to 5%.
Fiscal Outlook Uncertain Amidst Project Delays
The World Bank’s “Malawi Economic Monitor” highlights that significant tax benefits from mining development may not materialize for another five to ten years. Uncertainty surrounding the completion of high-risk projects and the government’s ability to effectively capture revenues within the existing tax framework contribute to these lower projections.
Public revenues from the mining sector could reach approximately 5% of GDP by 2033, contingent on successful project execution and revenue capture. This revised outlook contrasts sharply with Malawi’s national development strategy.
Key Projects Under Scrutiny
The World Bank’s analysis details a baseline scenario involving the exploitation of the Kayelekera uranium project, operated by Lotus Resources, and the Graphite/Ruile Kasiya project by Sovereign Metals. These initial ventures are estimated to generate around $200 million in mining revenue, equating to roughly 2% of Malawi’s current GDP.
A more optimistic, “unconstrained” scenario envisions a 5% contribution to GDP. This projection hinges on the successful advancement of five additional projects, including the Niobium deposit at Kanyika and the rare earth elements extraction at Kangankunde and Songwe Hill.
These figures stand in stark contrast to Malawi’s “Vision 2063” roadmap, which envisages mining sector growth reaching up to 25% by 2063, a significant leap from the current contribution of less than 1%.
Ensuring Project Realization is Crucial
The World Bank’s report underscores the critical need for Malawi to ensure the timely realization of its announced mining projects. This reminder comes as some operators are still navigating crucial project development stages. For instance, Globe Metals & Mining, the developer of the Kanyika Niobium deposit, was recently granted a one-year extension to finalize funding and withdrawal agreements essential for commencing construction.
In the interim, the restart of the Kayelekera uranium mine, which has been dormant since 2014, is anticipated by the end of 2025. Its operator projects a total output of 19.3 million pounds of uranium over a decade-long operational life.
Globally, the demand for critical minerals is rising significantly. For example, the International Energy Agency reported in 2023 that demand for key minerals used in clean energy technologies could increase by up to 40% by 2040 (IEA 2023).
