Malawi has frozen exports of gemstones and precious minerals and stopped issuing new mineral export licences while it reforms the way the sector is administrated, the government said late on Wednesday.
The southern African nation has significant mineral deposits, including uranium, rubies and sapphires but, unlike its neighbours, has yet to maximise their benefits.
"This measure has been taken in order to sanitise the mining sector as the ministry will be undertaking some reforms to bring in efficiency and transparency in the mineral rights administration," Mining Minister Joseph Mkandawire said in a post on Facebook.
The export ban comes into force "with immediate effect" and will last until further notice, the mining ministry said in a separate statement.
Reviewing of existing contracts
The decision followed an order by the country's vice president to review all existing contracts – a procedure scheduled to take 21 days.
Landlocked Malawi, a net importer, has in recent years sought billions of dollars in unpaid taxes and royalties from foreign companies.
Since mid-2022, it has demanded over $309 billion from Columbia Gem House, a US-based gemstone company, for rubies exported from the country over the last 10 years.
The government alleges that Nyala Mines Limited, a Columbia Gem House subsidiary, paid taxes of just $600 against projected revenues of $24 billion from its Malawian operation.
Mining sector could generate billions in revenue
The amount claimed from the US company is nearly 30 times the debt-laden country's GDP, according to the International Monetary Fund.
Malawi's minerals industry contributed only 3.5 percent to national income in 2023, according to the World Bank.
The sector could generate up to $30 billion in exports between 2026 and 2040 if it capitalises on the demand for "green minerals" such as graphite and titanium, the World Bank said in January.
Nearly three-quarters of the 24 million population lives in extreme poverty, according to the World Bank.
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