Thursday, June 24, 2021

Malawi to have Gold buying market- RBM

The Reserve Bank of Malawi (RBM) has finally taken cognizance that gold is being mined on a large scale in the country and has now announced that from May, 2021, it is introducing a structured market for gold.

Gold market is currently carried out on a black market leading to loss of revenue by government through smuggling and under-pricing on the poor miners.

In a statement, RBM says the structured market — done in line with Section 28 of the Reserve Bank of Malawi Act (Cap. 44:02) of the Laws of Malawi — will go a long way in supporting Artisanal and Small-Scale Miners (ASMs) involved in mining and trading of gold as a way of sustaining livelihood, since ASMs will conveniently access the market.

Reserve Bank of Malawi set to now regulate the emerging gold mining industry

“In addition, ASMs will be empowered through capacity building and other forms of technical assistance that will be availed under the framework of the initiative, to ensure that ASMs are mining gold in a safe and environmentally sustainable manner.”

The Central Bank said the concept of the initiative started with confirmation of the existence of alluvial gold in the country and it involved collaboration among government ministries, departments and agencies.

It also involved extensive research, including consultations with other countries that have successfully implemented similar initiatives in order to draw key success lessons.

RBM says this initiative will be facilitated by the Export Development Fund, a subsidiary of RBM mandated to promote the growth and diversification of exports as well as accelerating structural transformation in Malawi through financial and non-financial interventions.

Export Development Fund will work in collaboration with all key government ministries, departments and agencies.

“The general public is therefore urged to support and embrace the initiative that its goals are attained. Benefits of this initiative are comprehensive prices, instant payment, secured market and improved livelihoods for the Artisanal and Small-Scale Miners.

Earlier this month, the gold rush was discussed on social media, with Kennedy Rashid writing on his Facebook page, saying: “To me the Reserve Bank of Malawi is sleeping on its duties. Did you know that the RBM Act gives it the task of buying and selling precious mineral resources like gold?

“Imagine if the Reserve Bank could open a market for gold that is being mined in Malawi — but no RBM thought of taking a nap and let the informal gold miners sell their gold at raw deals to foreigners.”

But now he can be rest assured since what he thought was “sleeping on the job” was actually work in progress.

Meanwhile, gold buyers have formed the Gold Buyers Association of Malawi and they were reported in the media last month that they are poised to bring sanity to this industry by introducing price determination mechanism that will strengthen their market.

In an interview with Mining and Trade Review, the association’s chairperson Maotcha Banda said they are poised to promote and maintain positive working relationship amongst its members by “regulating buying prices, collaborating with government in revenue collection from the gold industry and ensuring that profits from gold benefit Malawians”.

“We will link up gold buyers and government through line ministry,” Maotcha Banda is quoted as saying, adding that they will also work closely with the Artisanal and Small-Scale Miners (ASMs) to help them not to be exploited.

He further disclosed that they are negotiating export deals with a Dubai gold dealer while asking the mining and immigration offices to urgently deal with the influx of illegal foreign buyers on the local gold market.

“The association will not allow foreigners who are not properly documented to do the business in Malawi,” Maotcha told Mining and Trade Review, adding that the government should establish selling points in all cities and to provide a conducive environment for local and international buyers.

The association is headquartered at Ntaja Trading Centre in Machinga, a district that is active in the gold rush together with Lilongwe, Neno, Kasungu, Ntcheu, Mangochi and Salima districts.

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