Public Disclosure Copy The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) MW: Mining Governance and Growth Support Project (P120825) AFRICA | Malawi | Energy & Extractives Global Practice | IBRD/IDA | Investment Project Financing | FY 2011 | Seq No: 10 | ARCHIVED on 05-Jan-2018 | ISR28752 | Implementing Agencies: Government of Malawi, Ministry Of Natural Resources Energy and Mining Key Dates Key Project Dates Bank Approval Date:31-Mar-2011 Effectiveness Date:23-Aug-2012 Planned Mid Term Review Date:01-Dec-2014 Actual Mid-Term Review Date:05-Dec-2014 Original Closing Date:30-Sep-2016 Revised Closing Date:31-Mar-2018 Project Development Objectives Project Development Objective (from Project Appraisal Document) To improve the efficiency, transparency and sustainability of mining sector management Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Managing Mineral Rights and Operations:(Cost $6.50 M) Generating and Managing Mineral Revenue:(Cost $1.55 M) Promoting the Mining Sector:(Cost $17.00 M) Project Management:(Cost $2.72 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory Overall Risk Rating  Moderate  Moderate 1/5/2018 Page 1 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) Implementation Status and Key Decisions The MGGSP has been effective since August 23, 2012, with a current disbursement rate of 82%. Overall project implementation is rated as Satisfactory. Implementation Progress: A Strategic Environmental and Social Action Plan was completed in 2015 and its Action Plan was adopted by Government in May, 2016. As a result, the Covenant to the Finance Agreement regarding the SESA has been met. The 1981 Mines and Minerals Act has been reviewed and the Bill and associated regulations have been finalized. The activity suffered a number of delays and is now expected to be tabled in the February 2018 seating of Parliament. Work is in progress to establish a modern computer-based cadastral system with efficient and transparent management of mineral exploration and mining rights. A contract has been awarded and implementation is in progress. Some of Malawi’s mining licenses are already visible online. The amendments to the Income Tax Act were passed by parliament in June 2016 except for the VAT act. The Bank Team congratulates the EITI Multi Stakeholder Group (MSG) for progress made towards EITI validation. The group released the first report in April 2017 as planned. The MSG has prepared a Scoping Study to define the scope for the first Malawi Extractive Industries Transparency Initiative (MEITI) report and in preparation of the work of the Independent Administrator, who was assigned to do the reconciliation and write the report. This first year report focused on larger companies in order to minimize costs of running MEITI. MEITI funding has been covered by GIZ to date, including 3 Secretariat staff (a Technical Manager, Communications Officer and Accountant). Additional support is provided under Component B-3 (Building Mineral Revenue Transparency) of MGGSP, including capacity building, consultations and launch of the EITI in Malawi. The Bank team stresses that Malawi should integrate sustainability of the EITI into Government structures and the budget. Work on establishment of the Geo-Data Management Center is in progress. The geo-database will be located in the Geological Survey Department (GSD) library, which has been refurbished under the project. Several activities continue to take place to encourage investment in artisanal and small-scale mining (ASM) such as training, attendance at International ASM Indaba, Skills development, and formation of cooperatives. Other activities under this project include training the police, the Malawi Revenue Authority (MRA) and immigration officials in identification of gemstones. The ASM policy has been developed and is now awaiting approval by cabinet committee. Courses have been introduced at The Malawi Polytechnic and MUST in the mining related fields such as Mining Engineering and Geology. A curriculum review was also done at Chancellor College to ensure that the courses offered by these institutions meet the potential market demand for the skills in the mining sector. Procurement under the project has been rated as Satisfactory as many contracts have been signed, are being implemented and deliveries have been made for goods and services. Financial Management arrangements for the project have been rated Satisfactory and risk has been assessed as substantial. The project is now current on all IFRs as well as audited financial statements. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Substantial Macroeconomic  --  Moderate  Moderate Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial 1/5/2018 Page 2 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) Fiduciary  --  Moderate  Moderate Environment and Social  --  Substantial  Moderate Stakeholders  --  Moderate  Moderate Other  --  --  -- Overall  --  Moderate  Moderate Results Project Development Objective Indicators PHINDPDOTBL  Efficiency - Days taken to issue mineral rights (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 90.00 94.00 74.00 45.00 Date 23-Aug-2012 02-Jun-2016 10-Nov-2017 23-Aug-2017 PHINDPDOTBL  Transparency - Annual public reporting of mineral sector tax revenues (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value no Yes Yes yes Date 23-Aug-2012 02-Jun-2016 10-Nov-2017 30-Mar-2018 PHINDPDOTBL  Sustainability - Percentage of mining operations subjected to environmental certification (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 100.00 100.00 90.00 Date 23-Aug-2012 02-Jun-2016 10-Nov-2017 30-Mar-2018 Comments Since project effectiveness Sustainability has been defined as number of companies subjected to Environmental Impact Assessment (EIA) certification. This indicator was clarified during the October 2016 World Bank surpervision mission as number of mining companies that are monitored for adherence of the mechanism set in the EIA document. As a follow up to the new clarification the Project engaged Environmental Affairs Department (EAD) which is mandated for routine monitoring to source the required data. It was noted that EAD is mandated to do routing monitoring quarterly and its across several sector apart from Mining. 1/5/2018 Page 3 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) Overall Comments Intermediate Results Indicators PHINDIRITBL  Modern mining legislation in place (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Mines and The Mines and Minerals Minerals Act has been Act has been reviewed Mining Policy in place but reviewed and the Bill and the Bill and new mining act and and associated associated regulations New mining regulations, amended regulations have been have been finalized. The regulations Value mineral taxation legislation finalized. The activity activity suffered a submitted to and model mining suffered a number of number of delays and is relevant agreement still under delays and is now now expected to be authorities. development expected to be tabled tabled in the February in the February 2016 2018 seating of seating of Parliament. Parliament. Date 23-Aug-2012 06-Dec-2016 10-Nov-2017 30-Mar-2018 PHINDIRITBL  Modern computerized mining cadastre in use (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New cadaster office is A contract has been about to be completed. awarded and the Regulations for Consultants have transitioning from already started Minerals licensing previous manual to implementation. Some Computerized Value conducted using slow and computerized cadaster of Malawi’s mining cadastre in use paper based system are being drafting, licenses are already including regulations for visible online. Building the mining cadaster refurbishment works committee have commenced. meetings.commenced. Date 23-Aug-2012 05-Dec-2016 10-Nov-2017 30-Mar-2018 1/5/2018 Page 4 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) PHINDIRITBL  Multi-stakeholder forum on mining sector established with civil society participation (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The EITI Multi Stakeholder Group The EITI Multi (MSG) has made Regular Stakeholder Group progress towards EITI meetings of Ad hoc and reactive released and validation. The group is multi- Value arrangements for disseminated the first on track to release the stakeholder stakeholder dialogue report in April 2017.The first report by April forum taking MSG continues to meet 2017.The MSG place on a quarterly basis. continues to meet on a quarterly basis. Date 23-Aug-2012 06-Dec-2016 10-Nov-2017 30-Mar-2018 PHINDIRITBL  Health, safety, environmental and social management policies and monitoring systems completed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Policy Framework New tools for Policy Gaps exist in policy for Safety, implementing the Policy framework framework and monitoring Value environmental and Framework and complete and systems are in need of social management monitoring systems are monitoring significant strengthening has is in place. being drafted. system in place Date 23-Aug-2012 06-Dec-2016 10-Nov-2017 30-Mar-2018 PHINDIRITBL  Standardized fiscal regime (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Standardized royalty Standardized royalty Standardized and tax laws and Royalty and tax terms and tax laws and royalty and tax regulations drafted. Value open to negotiation and regulations drafted. laws and Target Achieved. selective concession Target Achieved. regulations drafted Date 23-Aug-2012 02-Jun-2016 10-Nov-2017 30-Mar-2018 1/5/2018 Page 5 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) PHINDIRITBL  Mineral tax administration and revenue management developed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The tabling in parliament has delayed. The next The cabinet has finally Policies to No specialized session of parliament finalized the draft bill address arrangements for minerals now is February 2017. and will be sent to the revenue Value tax administration and The Ministry of Justice parliament. The next volatility and revenue management is incorporation EITI session of parliament savings issues. now is February 2018 introduced Date 23-Aug-2012 06-Dec-2016 10-Nov-2017 30-Mar-2018 PHINDIRITBL  Geo-data management center providing online access (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Consultant, GAFAG has made initial deliverables: The Geo- data Geo-data training of officers and management Centre is management presentation of a Only old and insufficient now in operation and centre in Value prototype system. The geo-data available accessible online. operation and geo-database will be Digitization of old accessible on- located in the GSD information is ongoing. line library, which has been refurbished under the project. Date 30-Aug-2012 02-Jun-2016 10-Nov-2017 30-Mar-2018 PHINDIRITBL  Number of students newly enrolled in mining-related tertiary education programs in Malawi (with breakdown by gender) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 42.00 262.00 262.00 150.00 Date 31-Dec-2010 02-Jun-2016 10-Nov-2017 30-Mar-2018 1/5/2018 Page 6 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) PHINDIRITBL  Number of public service personnel trained in sector-relevant fields (with breakdown by gender) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 199.00 199.00 115.00 Date 23-Aug-2012 02-Jun-2016 10-Nov-2017 30-Mar-2018 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P120825 IDA-49010 Effective USD 25.00 25.00 0.00 21.61 1.70 93% P120825 TF-12935 Closed USD 4.67 4.67 0.00 4.06 0.71 85% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P120825 IDA-49010 Effective 31-Mar-2011 02-Nov-2011 23-Aug-2012 30-Sep-2016 31-Mar-2018 P120825 TF-12935 Closed 13-Aug-2012 22-Aug-2012 23-Aug-2012 17-Nov-2015 15-Dec-2017 Cumulative Disbursements 1/5/2018 Page 7 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) Restructuring History Level Approved on 04-May-2012 ,Level 2 Approved on 11-May-2016 ,Level 2 Approved on 03-May-2017 ,Level 2 Approved on 17-Aug-2017 ,Level 2 Approved on 10-Oct-2017 Related Project(s) There are no related projects. 1/5/2018 Page 8 of 8 Public Disclosure Copy