29/09/2026
STAKEHOLDER COMMENTS ON DRAFT REGULATIONS
CRITICAL TECHNICAL COMMENTS ON CLAUSE 294B — EXPORT OF MINERAL SAMPLES FOR TESTING
For Miners, Dealers and Gemstone Laboratories
Yami Gemstone Lab & Exports (YAGLE) welcomes the opportunity to provide technical comments on the proposed provisions governing the export of mineral samples for laboratory testing.
We support appropriate regulation of mineral sample exports and recognise the Government's legitimate interest in preventing abuse of sample-export provisions, under-declaration, illicit mineral flows and royalty evasion.
However, we respectfully submit that Clause 294B, as presently drafted, requires further clarification and refinement to distinguish between:
a mineral sample exported solely for scientific testing, identification, grading or certification; and
a mineral that is commercially exported, sold or otherwise disposed of.
This distinction is particularly important for gemstones because the commercial value of a specimen may not be capable of reliable determination from physical appearance alone.
We therefore propose the following amendments.
1. A SAMPLE EXPORTED FOR TESTING IS NOT NECESSARILY A COMMERCIAL EXPORT
A miner or dealer may encounter a mineral specimen whose identity and characteristics are uncertain.
For example, a rough stone may visually appear to be ruby, sapphire, emerald or another valuable gemstone, but laboratory examination may subsequently establish that it is:
a different mineral;
synthetic;
heavily treated;
composite;
low-quality material; or
commercially insignificant.
The very purpose of sending such material to an accredited laboratory is to establish what the material actually is and what characteristics it possesses.
We therefore respectfully submit that a sample exported solely for laboratory testing should not automatically be treated as a commercially valued mineral merely because its physical appearance suggests potential value.
A reliable commercial value cannot be established merely from physical appearance when the purpose of the export is to determine the identity and characteristics of the mineral.
The Regulations should therefore create a clear distinction between:
Testing/Certification/Identification and technical assessment
and
Commercial Disposal, Sale, transfer or other commercial transaction.
2. LABORATORY CERTIFICATION AND MONETARY VALUATION ARE DIFFERENT FUNCTIONS
We consider this distinction particularly important in the drafting of Clause 294B.
An internationally recognised gemological laboratory may provide technical information concerning matters such as:
mineral or gemstone identity;
natural or synthetic status;
detectable treatments;
quality characteristics;
and, where the laboratory provides such a service, geographic origin or other specialist findings.
However, a laboratory identification or grading report should not automatically be treated as a monetary valuation or appraisal.
A monetary appraisal is a separate professional exercise undertaken for a defined purpose by an appropriately qualified appraiser.
Consequently, if provisional royalty is assessed before testing and subsequently reconciled against a laboratory report, the Regulations should clearly specify:
what value is used for the initial assessment;
what value is used for reconciliation;
who determines that value;
what happens where the laboratory report contains no monetary value; and
the procedure and timeframe for any refund or adjustment where the initial assessment materially differs from the subsequent verified position.
Without such clarification, the reconciliation mechanism may become difficult to administer consistently.
3. PROVISIONAL ROYALTY SHOULD NOT BE THE DEFAULT FOR TESTING-ONLY SAMPLES
We respectfully propose that where a sample is exported solely for scientific testing, identification, grading, certification or specialist analysis, the regulatory mechanism should preferably be based on:
a prescribed sample-export or administrative fee;
an appropriate security or undertaking where necessary;
full documentation of the sample;
chain-of-custody controls; and
subsequent submission of the laboratory report to the Authority.
This would allow Government to maintain control over the movement of samples without treating a testing transaction as though a commercial sale had already occurred.
Where the sample is subsequently sold or otherwise commercially disposed of, any applicable royalty or other fiscal obligation should then be determined in accordance with the applicable mining and fiscal provisions governing that commercial transaction.
This approach would also reduce the risk of tying up working capital belonging to small-scale miners and dealers before the commercial nature and value of the material have been established.
4. SAMPLES INTENDED FOR TESTING SHOULD BE DISTINGUISHED FROM SAMPLES INTENDED FOR COMMERCIALISATION
We support the requirement for appropriate accountability where mineral samples are exported for:
local sale;
research;
academic purposes;
institutional study; or
other purposes where the material is expected to return to Malawi.
In such cases, the Regulations may reasonably require the material to be returned or otherwise accounted for.
However, a different situation arises where a gemstone is exported to an internationally recognised laboratory because the specialised testing required is unavailable locally and the material may subsequently be commercially sold.
For example, a gemstone may need to be examined by an internationally recognised specialist laboratory in Bangkok, Colombo, Hong Kong, Europe or another recognised gemological centre.
Where the laboratory confirms the identity and characteristics of the gemstone, requiring the material to be physically returned to Malawi before it can be lawfully sold abroad may create unnecessary:
transportation costs;
delays;
customs procedures;
insurance costs;
handling risks; and
opportunities for administrative discretion.
We therefore propose that the Regulations distinguish between:
A. Testing/Research Samples
Samples exported for local sale, academic research, institutional research or other purposes requiring return should be subject to appropriate return and accountability requirements.
B. International Certification Samples
Samples exported solely for internationally recognised testing, identification, grading or certification should be permitted, subject to proper documentation and chain-of-custody controls, to proceed to lawful commercialisation in the relevant international market where the applicable legal requirements have been satisfied.
This would provide Government with control and traceability without creating unnecessary administrative barriers.
5. THE TERM "COMPETENT PERSON" SHOULD BE CLEARLY DEFINED
Clause 294B appears to rely on assessment by a "competent person" based on physical inspection and prevailing market prices.
We respectfully submit that this term requires a clear statutory or regulatory definition.
Gemstones can be technically difficult to identify and distinguish by visual inspection alone. Reliable identification may require specialised gemological instruments, laboratory testing and specialist knowledge.
We therefore recommend that a Competent Person for gemstone assessment be defined as a person who:
holds a recognised professional qualification in gemology or an equivalent relevant discipline, possesses demonstrable practical experience in gemstone identification and, where applicable, valuation, and is registered, approved or otherwise formally recognised by the Authority for the purposes prescribed by the Regulations.
The Regulations could recognise appropriate qualifications and equivalent professional experience rather than limiting eligibility to one particular institution.
Where monetary valuation is required, the person undertaking the appraisal should additionally possess appropriate valuation/appraisal qualifications and experience, and should be subject to appropriate professional accountability.
This distinction would help ensure that the person determining mineral identity is appropriately qualified for that task and that monetary valuation is undertaken by someone qualified to perform an appraisal.
6. "PREVAILING MARKET PRICE" REQUIRES A DEFINED METHODOLOGY
We also recommend that the Regulations provide a transparent methodology for determining any provisional reference value where one is required.
For gemstones, market value can vary substantially depending on:
species and variety;
natural or synthetic status;
treatment;
colour;
clarity;
cut;
weight;
origin;
quality;
availability;
market destination; and
actual transaction terms.
Consequently, "prevailing market prices" should not be determined solely by visual appearance or by reference to a generic price for a gemstone variety.
Where provisional assessment is unavoidable, the Regulations should specify the applicable methodology, documentary evidence and review mechanism.
7. PREVENTING FRAUD THROUGH VERIFIED LABORATORY REPORTS
We recognise the legitimate concern that persons could potentially misuse laboratory testing provisions to conceal commercial exports or submit fraudulent documentation.
However, provisional royalty on testing samples is not necessarily the most effective solution.
A stronger system would combine:
an official list of recognised or approved international laboratories;
online verification of laboratory reports;
unique report numbers;
QR codes or equivalent digital verification;
direct electronic transmission of reports to the Authority where practicable;
documented chain of custody;
accurate sample descriptions, photographs and weights;
export documentation linking the sample to the laboratory report; and
appropriate post-testing reconciliation and audit powers.
International laboratories whose reports are accepted under the Regulations should be subject to verification procedures rather than relying exclusively on documents submitted by the exporter.
This would allow the Authority to confirm the authenticity of a report directly with the issuing laboratory.
8. TESTING REPORTS SHOULD BE CAPABLE OF SUPPORTING FINANCING AND COMMERCIAL DUE DILIGENCE
One of the important objectives of mineral formalisation should be to enable legitimate miners to convert mineral assets into bankable economic assets.
A physical inspection undertaken solely on the basis of visual appearance may not provide sufficient technical evidence for:
bank financing;
insurance;
investment;
joint ventures;
institutional due diligence;
international offtake negotiations; or
asset-backed financing.
A more effective regulatory framework should therefore encourage the progression:
Mineral Sample - Laboratory Identification/Certification - Professional Appraisal Where Required - Verified Commercial Transaction - Appropriate Fiscal Assessment
This would give compliant miners documentation that has practical commercial utility rather than simply creating a provisional royalty receipt.
9. LABORATORY-TO-LABORATORY REFERRALS SHOULD NOT CREATE A SECOND ROYALTY EVENT
This is particularly important as Malawi develops domestic gemological capacity.
A Malawian private laboratory may be able to conduct preliminary identification but may need to refer a complex or high-value gemstone to an internationally recognised specialist laboratory.
The regulatory sequence may therefore be:
Miner/Dealer - Malawian Laboratory - International Specialist Laboratory - Certification - Appraisal/Commercialisation
The movement of the specimen from the Malawian laboratory to the international laboratory is not itself a commercial sale.
We therefore recommend that samples exported by a licensed or approved local laboratory to an approved international laboratory solely for further testing, identification, grading, certification or specialist analysis should not trigger a second royalty assessment.
Instead, such referrals should be controlled through:
documented chain of custody;
sample registration;
laboratory-to-laboratory documentation;
export authorisation or notification where applicable;
direct transmission or online verification of the final report; and
subsequent declaration of any commercial disposal.
This would prevent the regulatory framework from unintentionally discouraging local laboratories from referring technically complex stones for specialist analysis.
It would also help avoid multiple fiscal events being imposed on the same specimen merely because it passes through different stages of scientific examination before a commercial transaction occurs.
10. PROPOSED REGULATORY FRAMEWORK
We respectfully recommend that Clause 294B be reconsidered around the following principles:
1. Define "Competent Person"
Prescribe minimum recognised gemological qualifications, experience and professional accountability for persons undertaking gemstone assessments.
2. Separate the Functions
Distinguish clearly between:
identification;
grading/certification;
monetary appraisal; and
royalty/valuation determination for fiscal purposes.
3. Establish Approved Laboratories
Publish and maintain an official list of recognised laboratories, including internationally recognised laboratories whose reports can be independently verified.
4. Use a Nominal Administrative/Export Fee for Testing
Where appropriate, charge a reasonable prescribed fee or security for testing-only samples rather than treating the sample as a commercial sale before its identity and characteristics are established.
5. Apply Fiscal Obligations to Commercial Disposal
Where a sample subsequently enters commercial trade, the applicable royalty or other fiscal obligation should be determined under the relevant provisions governing the commercial transaction and based on the legally prescribed valuation methodology.
6. Create Two Sample Categories
Distinguish between:
samples that must return because they were exported for research, local sale or other specified purposes; and
samples exported for international certification that may subsequently be commercialised lawfully, subject to documentation and applicable fiscal requirements.
7. Protect Laboratory-to-Laboratory Referrals
Samples sent from an approved Malawian laboratory to an approved international laboratory solely for further testing should not constitute a new commercial transaction or trigger a second royalty event.
8. Establish Digital Verification
Require online verification or direct transmission of international laboratory reports to the Authority.
9. Maintain Chain of Custody
Require accurate records of sample weight, description, photographs, exporter, laboratory, destination and final disposition.
10. Make the System Bankable
The regulatory framework should encourage the creation of reliable technical documentation that can subsequently support legitimate financing, insurance, investment and international trade.
CONCLUSION
YAGLE supports the Government's objective of strengthening oversight of mineral exports and preventing abuse of sample-export provisions.
Our concern is therefore not with regulation of mineral samples, but with ensuring that the regulatory mechanism is technically appropriate, proportionate and capable of distinguishing scientific testing from commercial disposal.
A gemstone sample exported solely to establish its identity or characteristics should not automatically be treated as a commercially valued mineral merely because it has an attractive appearance.
Similarly, a laboratory identification report should not be treated as a monetary appraisal where the laboratory has not undertaken a valuation exercise.
We respectfully believe that a well-designed system can achieve both objectives:
protect Government revenue while facilitating legitimate scientific testing, international certification, responsible mineral trade and the development of Malawi's domestic gemological capacity.
The proposed framework should therefore seek to achieve the following sequence:
Controlled Sample Export - Accredited Laboratory Testing - Verified Identification/Certification - Professional Appraisal Where Required - Lawful Commercialisation - Appropriate Fiscal Assessment
This approach would strengthen traceability, reduce administrative uncertainty, protect legitimate miners and dealers, support the development of local laboratories, and provide Government with a more reliable basis for revenue collection.
Core Principle
A sample exported solely for scientific testing should not be treated as a commercial sale before its identity, characteristics and commercial status have been established.
Ministry of Mining-Malawi
Mining and Minerals Regulatory Authority
Malawi Government
Malawi Chamber of Mines and Energy
Mining Review Malawi
