Government lays out new strategies to revive mining sector

A quarry site in Jabana, Gasabo District. The slowdown in mining and mineral trading has prompted the Government to devise new strategies to boost the sector and put it on a path to speedy recovery from the Covid-19 impact. / Photo: Julius Bizimungu.

A set of strategies unveiled on Tuesday June 9 by the Rwanda Mines, Petroleum and Gas Board (RMB) could facilitate mineral processing and trading companies to resume full operations, allowing the sector to recover from the Covid-19 pandemic.

Globally, mining and mineral trading activities have slowed down as a result of lockdown measures that several countries have put in place, as well as halting of airline schedules.

 

This has affected Rwanda’s mining sector just like the rest of the world.

 

Statistics show that revenue exports of 3Ts decreased by 30.9 per cent due to the drop in international commodity prices in January and February 2020 compared to the same period in 2019.

 

Officials during a tour of Jabana quarry site. Photo: Julius Bizimungu.

During the same period, prices of Coltan dropped by -4.6 per cent, Wolfram by -15.3 per cent, and Cassiterite by -14.5 per cent as demand for mined products fell due to slow economic activity.

But as countries ease lockdown measures and airlines prepare to restart operations, companies will need relief to get back to business.

As part of the country’s economic recovery plan, the Government through RMB has highlighted a set of medium term measures that are expected to support virus-hit businesses to get back to normal.

Francis Gatare, RMB’s Chief Executive Officer indicated that the Government will facilitate mining companies to quickly resume full operations and expedite licensing of new applications.

“We are aware that mining and quarry companies halted operations during the lockdown due to Covid-19, which affected their productivity and revenues. This in turn affected many lives that depend on the sector,” he said after touring a quarry site in Jabana, Gasabo District.

“So we want to facilitate companies in mining and quarry to resume 100 per cent operations in the next two years by professionalizing the sector and mobilizing new investments,” he added.

Indeed, local mining and quarry operators have been hit the hardest.

Bernard Nsanzimana, a legal representative of Carrière des Mille Collines which operates a quarry site in Jabana, told The New Times that companies have been affected.

“Between March 1 and late May we had stopped all operations. Even as activities resume, we still use few workers to abide by the health measures and guidelines to fight Covid-19,” he said.

This, he said, meant that production went down.

The company which makes aggregates, sand, and lime for the construction sector, was producing up to 500,000 cubic metres per day but with the new Coronavirus pandemic production has been cut to half.

“Still, we don’t have clients because our products are for the construction sector, and because of the Covid-19 mitigating measures in place construction activities have also been affected,” Nsanzimana who’s also a mining governance expert noted.

The recovery plan

For the next two years, the Government will reorganise small scale mining operators, consolidate many of them into collective investment groups and license their new collective companies.

According to Donat Nsengumuremyi, Director of Mineral Extraction and Processing Unit at RMB, more than 30 small scale concessions have been identified and could be placed under collective investment schemes.

“We started with five (mining) blocks which have formed collective investment schemes as part of the pilot phase, but at least 32 concessions have been identified as those that can form investment schemes,” he told this publication.

Nsengumuremyi adds that the already formed investment schemes have between two to 10 companies operating together, either through joint ventures, mergers or partnership agreements.

If the new approach that RMB is piloting succeeds, the Government says it has pledged to support the new collective investment schemes with international investment mobilization.

In a bid to professionalize small scale mining, RMB is facilitating Rwanda Engineering and Manufacturing Corporation (REMCO) and the Integrated Polytechnic Regional Centres (IPRCs) to establish partnership with international manufactures of equipment and explosives, to make them locally.

Rwanda seeks to become a regional mineral hub for processing and trading, and therefore, RMB is working to formalize regional trade in minerals to support local smelters, refineries and all value addition and export business.

This will also add value to job creation and raise export revenues, according to officials.

Other recovery measures include defining mining and mineral exploration as priority in Rwanda’s Investment Code, and establishing a Mineral Exploration Support Fund.

The aim is to attract international mineral exploration companies, and de-risk exploration investments, believed to be key to achieve industrial scale mining operations.

Rwanda is currently known among the top exporters of 3Ts (tin, tantalum and tungsten), but the plan is underway to diversify minerals that the country takes to international markets.

Going forward, RMB will push for strategic investments in processing and trading of gold, gemstones, and strategic minerals like Lithium, which has already proven to have potential.

Nsengumuremyi highlighted that the Government is also working to expedite resumption of Rutongo Mines operations to quickly sort out issues linked to the pending long term shareholder agreement for Rutongo Mines Ltd.

It is expected that Rutongo, one of the first mining blocks for tin in Rwanda, will resume full operations by the end of June.

jbizimungu@newtimesrwanda.com

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