HRDC demand probe on Malawi mining, oil and search deals: Rak Gas licence under scrutiny
Malawi has 72 firms given exploration and mining licences but were not doing much, according to a confidential government report which Nyasa Times has seen, prompting the Human Rights Defenders Coalition (HRDC) demanding an investigations in into the mining deals.
In a letter dated October 28 2020 addressed to Anti-Corruption Bureau (ACB) director general Reyneck Matemba, the coalition raises questions on how government issues about 200 exploration and mining licences yet the same does not translate into improved revenue for the public purse.
HRDC chairperson Gift Trapence said his organisation’s analysis of information showed that “there is a cartel that controls the mining sector to their benefit.”
He said they want an investigation and also raised alarm on how government has treated a graphite mining company whose licence was twice cancelled and renewed.
Illombwa Graphite Company Limited had its licence withdrawn on June 10 2013 and in 2017.
IGC remains in the ownership of Faisal Hassen, under a renewed Mining Licence No. ML0019/95, which was issued by the Minister of Energy and Mining on June 28 1995 and expires on June 28 2020. The first licence was issued in 1988.
During his maiden State of the Nation Address delivered in Parliament on September 4, President Lazarus Chakwera indicated that gold was being exported from Malawi to the middle East without benefitting Malawians.
“You may have heard it said that Malawi is a poor country, but we must reject thus lie. Surely, my country, with 85 million dollars in gold exported to the Middle East every year, is not poor.”
Chakwera said Malawi is a country stripped of its God-given wealth and potential by syndicates of people in the public sector who exploit decades of bad government policies and practices to enrich themselves and their private sector accomplices.
Meanwhile, there is information that points to the fact that the three companies controlling five of the six oil and gas exploration blocks are linked to the same people. The companies are Rak Gas, Pacific Oil and Hamra Oil Holdings Limited.
The country’s laws were breached in the award of the oil and gas exploration licences in Lake Malawi and other parts of the country.
The common signature alone should have prompted the then Minister of Mining to investigate before issuing licences to Rak Gas and Pacific Oil and allowing Hamra to buy the 51 percent interest in the blocks that were licensed to Surestream Petroleum of the United Kingdom.
Rak Gas is owned by the Government of Ras Al Khaimah, one of the emirates of the United Arab Emirates (UAE) while Hamra describes itself as a Cayman Island origin private company.
Pacific Oil says it is part of Vega Petroleum Limited—the privately owned oil and gas entity that has oil producing and exploration concessions in Egypt.
Government proceeded to sign production sharing agreements (PSAs) with the companies against advice from the Solicitor General to only agree to PSAs after the oil or gas is discovered.
Under Petroleum Regulations, the country is divided into six blocks for the exploration and production of oil.
In 2011, Blocks Two and Three were issued to Surestream Limited, which later farmed to Hamra Oil in a joint operating agreement and farming out agreement. Hamra now owns 51 percent equity in the blocks, according to the opinion.
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When mining and gas investors come to invest or do explorations, they make deals with clueless officials who make Malawi get ripped-off. The manner in which the inconsistencies occur indicates that we either have no mining and energy charter or if we have, then it’s just a paper accumulating dust in the shelf. We are a laughing stock in the manner we conduct the state business and one wonders if education and training acquired by our officials is bringing any effective progress.