Canadian mining firm Tinco was on Wednesday awarded a mining license by the government, authorising it to operate the Northern Province concessions of Nyakabingo and Rutongo for 25 years.
The development brings an end to two years of negotiations between the government and the firm, after its special license to mine wolfram and cassiterite (tin ore) in the two concessions expired in 2011.
The new contract is divided into four portions running for a period of 25 years.
The first phase will see the company inject $4 million (Rwf2.7b) in the Rutongo mine, which specialises in cassiterite and also invest in building a processing plant at Nyakabingo, according to the state minister for Mines, Evode Imena.
“In the first three years, Tinco will invest $4 million in Rutongo to develop mining activities and conduct exploration work. They will also build a processing plant within 12 months,” Imena told Saturday Times.
“For Nyakabingo, they will invest $3 million (Rwf2b) in the first three years and also build a processing plant. Once the first phase is over, they will then invest more.”
The investment is expected to increase production at both mines and help boost the country’s export sector.
Nyakabingo was producing 18 tonnes of wolframite per month. However, with the new contract, Tinco is expected to increase production to 30 tonnes per month, within two months.
At the Rutongo concession, the company is committed to increasing production of cassiterite to 90 tonnes per month by next year, from 60 tonnes, the minister said.
“Within the next two years, Tinco has agreed to increase the production of cassiterite from 90 tonnes per month to 120 tonnes,” Imena added.
“A kilogramme of cassiterite goes for Rwf15,000. Wolfram also lies in the same range. When you look at the increased targets of Tinco and what the government is expecting, this is exciting for our export earnings.”
The minister also revealed that the government will soon award a tender for coltan and cassiterite-rich Gatumba Mining Concession, in Nogororero District, Western Province.
The Country Manager for Tinco, Martin Kahanovitz, confirmed the new deal but declined to divulge more details.
In June, this year, the government published the amended Mining Law as part of efforts to ensure maximum productivity of the sector. The law, among other things, permits long-term licenses to mining companies to help attract large scale investors.
Mining fetched $228 million in 2013, roughly 40 per cent of the country’s total exports.
However, at the beginning of this year, much as mineral volume increased, it decreased in value by 18.6 per cent owing to low international prices.
The government intends to increase foreign investments in mining from $150 million in 2012 to $500 million by 2018.