Focus on Rwanda’s Mining Sector

Published by Dusabemungu Ange De La Victoire
On 30 December 2012 saa 06:19
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Rwanda’s Mining sector is undergoing reforms. In 2012, the Law on mining was revised to comply it with current trend of Mining sector.

Statistics show that Revenues increased from $10 million in 2003 to $96.4 million in 2010 and the year 2011 generated $164 million.

Current figures also show that mining Revenues had decreased to $150 Million in 2012 and the ambition of Rwanda is to be able to generate upto $ 400 each year referring to 2017 target.

The Minister of Trade and Industry, Francois Kanimba, has urged investors in the Mining sector to improve and double the production of exported minerals by 2013.

The Minister was addressing the meeting of miners on 31st Oct, 2012, adding that Miners should improve the quality and quantity of mines.

According to the Deputy Director General of Rwanda Mining and Geology Department, Dr. Michael Biryabarema more employment and higher paying jobs in mining industry will increase up to 50,000 employees by 2015.

The sector will increase investment at least $500 million by 2020 while exports will hit $240million per year by same year.

Reduced imports are expected to reach $10million per year fall in construction material imports and increased tax revenue $30million per year by 2020.

However, Biryabarema noted that this will only be possible if all operators stick to rigorous exploration and optimum production.
To sustain the sector, government plans to invest more than € 4 M for extensive surveys in other mineral Potentials in 2013.

Returning to 2017 target, the possibility to achieve $ 400 Million will depend on how committed are both Government and Miners themselves.

This will depend on which kind of reforms that will take place in that sector which is expected to contribute 5% to the National economy.
For the past years, the Rwandan economy has benefited enormously from the mining industry.

The 2012 left Experts in Mining sector and stakeholders pointing out that some changes regarding mining law should be made in order to develop Rwanda mining sector and ensuring that mining incomes are increasingly contributing to national development.

While presenting some specific changes, Biryabarema Michael, The deputy director general of Mining and Geology in Rwanda said that revising mining law is to maximize impacts of Mining in Rwanda and ensuring that people joining this sector have complied with good practice of Mining.

The changes which are to be made are found in Law No 37/2008 of 11th/08/2008 regarding Mining and quarry exploitation in Rwanda.

Most of investors who challenged that law, pointed out that articles regarding the duration of Mining Licenses is the most challenging factor to those who want to make profits from Mining.

According to the duration of License on medium mine which was not mentioned in the old law, under the new law will be ranged between 5 years and 15 years.

However, the license for vast mining which was 30 years renewable, under article 63 of the new law the license will be ranged between 15 years and 30 years.

To Miners there is no need to limit a company on duration rather than complying the License with deposit capacity.

Example here is on the License of Rutongo Mines, where Kevin Buyskes, General Manager – Rutongo Mines who was asking the extension of his license to even 30 years.

He noted that the policy behind mining license should be revised to avoid losses which can be caused by the license limit.

“It is only through license that you can only invest” Said Buyskes while addressing East African Legislative Assembly Committee on Agriculture,

Tourism and Natural resources during their official visit to his site.
However on the side of the Ministry of Natural resources, Caroline Kayonga, The PS at the Ministry of Natural resources said the Rwanda Mining Law is clear.

She noted that the only problem is that investors have not yet shown the available quantity of Minerals at the site.

“….,they have to come up with correct data which show the capacity of the deposit and ask a License depending on it;…if it is clear that exploitation take more than 4 years, why can’t we provide a license of more than 4 years?” Caroline said.

“Our duty is to make sure that these resources are well managed and contributing to Rwanda’s economic growth and benefiting both Rwandans and investors on their side.”

Historically, since 1930, Rwanda invested in Mining Industry. The main concern was to address the growth of country’s economy and to increase the income among Rwandan population.

Investors and Environment Concerns

Currently, before starting activities that would result in environmental degradation such as Mining investors should work under a basic EIA (Environmental Impact Assessment) - A procedure that ensures that environmental consequences of project are identified and assessed before Authorization is given.

According to mining law, this approach is a way to direct Miners to evolve from illegal mining system that have previously degraded Environment and help them to adopt legal mining system.

In this way, Rwanda’s miners will register increased mineral productivity and also immensely contribution to the long term conservation of Environment for sustainable Development.

To keep sustaining mining Industry and Environment protection the Rwanda Geology and Mining Authority also encourages all people working in Mining Sector to give up the culture of Mining in disorder and join Rwanda Mining Forum in order to be able to access more knowledge on geological and mining issues and get loans that will facilitate their daily activities.