Rwanda loses 44% of potential revenue over exporting unprocessed minerals

By Esther Muhozi
On 23 December 2023 at 12:19

Rwanda Mines, Petroleum and Gas Board (RMB) has introduced a new policy aimed at establishing a domestic mineral processing plants to prevent losses associated with exporting unprocessed minerals. Currently, up to 44% of potential revenue from precious stones mining is lost due to this practice.

Rwanda possesses valuable minerals such as Cassiterite, Wolfram, Coltan, Gold, Lithium, and Gemstones (Amethyst, Sapphire, Beryl, and Tourmaline). In recent years, the revenue generated from these minerals fluctuated, with a significant increase observed in 2020 and 2021, reaching $733 million and $516 million, respectively.

This growth is attributed to research, the identification of new mining sites, and collaboration with investors to enhance production. Mechanization within mining companies has also contributed to the upswing. However, despite these positive developments, a substantial amount of production is still lost due to the export of unprocessed minerals.

According to Ambassador Yamina Karitanyi, the CEO of RMB, exporting minerals without value addition results in significant losses, including taxes and the loss of valuable precious stones. For instance, the export of unprocessed gold containing copper or crude Coltan with additional minerals like niobium leads to a 44% loss in revenue.

To address this issue, the Gasabo Gold Refinery was established in 2017 with an investment exceeding Rwf5 billion. Although it currently operates at 30% of its capacity, processing 28.8 tons per year, the facility aims to increase the value of gold before export.

Additionally, plans are underway to construct processing plants for Lithium and Wolfram, aligning with Rwanda’s vision to add value to all minerals before export. RMB is working with investors to achieve this goal, emphasizing the importance of building more processing plants.

Furthermore, there are plans to construct plants to manufacture needed equipment, including Dynamites used in the mining sector. Amb. Karitanyi highlighted the high cost of imported dynamites and proposed local production to reduce expenses.

Rwanda envisions becoming self-sufficient in producing materials essential for mining, with a long-term plan to establish a factory within the country.

Despite the current inability to achieve this, a system has been created to provide miners with affordable supplies.

In the pursuit of increasing mining production and reaching a revenue target of at least US$1 billion this year, RMB emphasizes the importance of enhancing the entire mineral value chain, adopting modern equipment, and ensuring adherence to legal regulations in the mining sector.

Ongoing surveys are being conducted to provide accurate information on the quantity of minerals in Rwanda, with previous estimates indicating a substantial value of approximately $154 billion, largely untapped since the colonial period.

Rwanda loses 44% of potential revenue over exporting unprocessed minerals.