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Cheap Mozambican coal leading to shutdown of Malawi’s mines – report

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The import of cheap Mozambican coal into Malawi has choked the local market and led to the shutdown of more than three quarters of Malawi’s mines, according to Malawian paper Mining & Trade Review.

Mines at Mwaulambo, Nkhachira, Jalawe, Lisikwa, Njati and DDY Trading in Malawi’s Northern Region have all stopped operations as production has ramped up at mines at Moatize in Mozambique’s western province of Tete, which is closer to the coal consumers in Malawi’s commercial city of Blantyre.

Mozambique coal is sold at an average price of US$165 per metric tonne while Malawi coal sells at around US$190 per tonne, according to the article.

Wiskes Mkombezi, a spokesperson at Malawi’s Ministry of Industry, Trade and Tourism told Mining & Trade Review that Mozambican coal is only cheaper when the importers evade taxes.

Mozambique is exempted from import duty due to trade protocols under the Southern Africa Development Community (SADC) that remove trade barriers between member countries. However, the Former Ministry of Natural Resources, Energy and Mining, Grain Malunga, told Mining & Trade Review it is possible for Malawi to put in place regulations to protect the local industry, despite these trade protocols.

Tanzania, for example, has just imposed similar import restrictions on foreign coal, which has further weakened the profitability of Malawian mines.

© 2017, Zitamar Ltd. Reproduction and dissemination prohibited without written permission.

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