Rwanda’s quest to professionalize mining activities and heighten investor interest has in the past months seen the aggregation of small concessions as well as exploratory and zoning activities.
It is some of these aggregated concessions and findings from exploratory activities that will form the basis of pitches to potential investors in Kigali today and tomorrow.
As it hosts a two-day regional mining summit, East and Central Africa Mining Forum co-hosted by the Rwanda Mines, Petroleum & Gas Board, the government will also be seeking to sell the country as an investment hotspot for mining activities.
At least 600 delegates, including potential investors, are expected to attend the summit this week and the government is planning to use the platform to showcase available opportunities in the sector.
Rwanda’s packaged presentation to the investors includes five newly aggregated sites, which have previously been held by small miners but were unable to make the most of them due to shortage of capital, technology and expertise.
In total, there are over 140 concessions across the country with some of them being held by small scale operators currently unable to fully exploit them.
The government through the Rwanda Mines, Petroleum & Gas Board (RMB) has also conducted a number of exploratory studies which will be disclosed to investors.
“We also have a number of high potential areas that we have identified and zoned and will be showcasing to investors,” said Francis Gatare, the RMB Chief Executive Officer.
Investor needs for Rwanda also go beyond exploitation activities to include the provision of services, equipment and technology in the sector.
A significant portion of activities in Rwanda’s mining ecosystem continue to be manual and traditional, which has little efficiency, unprofitable and loss incurring.
Among the services that would have much impact include the provision of geo-scientific expertise, processing, value addition and availing equipment among others.
Rwandan miners say that for the mining sector to achieve its potential, there is a need for entrance of players with capacities in financing, value addition and technology in mining
Rwanda Mining Association Chairperson Jean Malick Kalima said that with the profile of participants, they are hopeful of the entrance of players with needed interventions.
With financing of mining activities continuing to be a dominant challenge not only in Rwanda but across the world, the government says that focus is now on equity investments as opposed to bank loans.
Currently, the sector relies on loans from banks which have not been forthcoming due to the high-risk profile, inadequate information and poor governance practices.
As of June this year, the sector had only received loans of about Rwf3.3 billion, making it the least beneficiary of loans.
Gatare said that an ideal way out would be through equity investments as the cost is not largely influenced by risk perception and has better payback terms.
Financing would, for instance, improve the quality of exploratory studies for mining firms, which would in term impact the outcomes of the sector.
“Rwanda is not adequately explored for minerals. However, it is not a scenario unique to the country. Globally, about $8 billion to $10 billion for into exploratory activities but less than 15 per cent of the sum is used up in Africa, that in turn means that there is not adequate exploration,” Gatare said.
He, however, noted that the government was involved in conducting some studies to map out regions, zones that have a high potential for minerals making way for detailed exploration by firms.
The mining sector was this year affected by the instability of commodity prices on the international market which saw prices of mineral go down. However, there is optimism among stakeholders on the recovery of the prices as solely driving up volumes of minerals remains unsustainable.
Rwanda is also keen on increased value addition to increase value and demand for minerals.
So far, experts say that the entry of Aldango Ltd which is involved in Gold Refinery and Luma Holding Ltd which is involved in smelting and refinery operations are a step in the right direction.
Gemstone is one of the minerals which government is also seeking to facilitate in value addition based on the value and demand of Rwanda’s Amethyst on the international market.
This will, among other things, require cutting, polishing and exporting for the stone.
In the 2018-2019 fiscal year, the mining sector raked in revenues of about $350 million with experts saying that international commodity prices had a severe effect on the revenues.