Reserve Bank of Malawi, committee fight over gold purchases

The Parliamentary Committee on Natural Resources and Climate Change has faulted the Reserve Bank of Malawi’ s involvement in gold purchasing, claiming it is fueling illegal mining activities. The government through the Export Development Fund, an RBM enterprise, started buying the gold in May 2021. Ministry of Mining Public Relations and Communications…

The Parliamentary Committee on Natural Resources and Climate Change has faulted the Reserve Bank of Malawi (RBM)’s involvement in gold purchasing, claiming it is fueling illegal mining activities.

But the central bank says it is operating within its jurisdiction and in line with the set legal instruments.

The government through the Export Development Fund (EDF), an RBM enterprise, started buying the gold in May 2021.

In an interview Tuesday, the committee chairperson Welani Chilenga said so far, there is no miner who was awarded a license for gold mining.

“RBM is fueling illegal gold mining because these gold miners are getting this gold from Namizimu forest in Mangochi District and this is a forest reserve.

“As a country, we are losing K20 million every day to illegal mining,” Chilenga said.

But RBM spokesperson Ralph Tseka said the central bank is mandated by law to purchase the mineral and operates within the legal framework.

“The RBM Act of 2018, under section 26 (g) provides that the bank may purchase, sell and hold gold and other precious metals. We have been giving this information to the committee,” Tseka said.

Ministry of Mining Public Relations and Communications Officer Andrew Mkonda said the government conducts proper scrutiny when issuing licenses and about 17 cooperatives were licensed to mine gold and other minerals.

“Since the government mandated the RBM through the EDF to buy gold, we have never received any reports that EDF is buying gold from illegal miners. What we know is that EDF is buying gold from licenced Malawians including cooperatives.

Mining expert Grain Malunga said RBM’s entry into the market has helped in bringing sanity as much of the gold was finding its way out of the country through illegal means.

“Actually, this is reducing smuggling of gold by offering that gold market. I think they are a better devil than the way things were because the smugglers were also not licensed to buy, Malunga said.

According to the sixth Malawi Extractive Industry Transparency Initiative report, since the launch of the gold buying initiative, cumulatively, about 186.96 kilograms of gold were bought at a total purchase cost of K9.4 billion, as of November, 30, 2022.