Rwanda is projecting a sharp growth in its mineral export earnings in the current fiscal year on account of diversification, value addition and stability in international prices.
The country’s export earnings from minerals are projected to reach $800 million this fiscal year, up from $399 million in 2017/18, according to Rwanda Mines, Petroleum and Gas Board (RMB).
This means that mineral exports will account for 38.7 per cent of all country’s export earnings.
Gatare (right) and other participants during the meeting in Kigali yesterday. Sam Ngendahimana.
The projections are also based on the higher mineral recovery rate owing to improved practices as well as better prices of minerals on the international market.
Among the aspects of diversification include gemstones where Rwanda has sizable deposits, which can fetch value on international markets.
Previously, Rwanda was largely known for tin, tantalum, and tungsten.
The country is weighing options of establishing a regional gemstones hub to act as a centre for processing and trading as well as a laboratory for testing precious stones.
A consultant has already developed a roadmap for implementation.
Francis Gatare, the Chief Executive of the Rwandan Mining, Petroleum and Gas Board, said that the Government is open to partnerships and co-ownership of the initiative with international investors or business partners.
He said that this would bring to an end instances where Rwanda has only been relevant in lower levels of the value chain of minerals, which has often seen the country supply raw materials to other players.
Going forward, he said, much more value would be retained with the hub.
“The gemstone hub is a strategic approach in the process of diversification,” Gatare said.
The Government is seeking partnerships with investors and stakeholders in markets such as Asia and Europe.
Globally, there is market for the mineral in countries such as China, Hong Kong, Thailand, India and Germany among others.
However, the Government is well aware of the complexity of a greater role higher up in the value chain and the potential resistance from players who benefit from the current status quo.
“The international market for gemstones is almost cartel like and some would want us to keep supplying them with raw materials for them to retain value. That is why we are seeking to work with committed business partners,” Gatare said.
Mineral exports are also expected to be buoyed after discovery of more deposits following a geological survey.
The survey, by a UK-based company, SRK, showed that out of seven sites where detailed mineral exploration works had been conducted, six sites have proven promising.
Despite the excitement of miners about the discovery, the Government is looking to adopt a new strategy in the exploration with some restrictions to ensure that most of them are taken up by specialised and professional operators who can get more value out of the sites.
Concerns of professionalism and poor practices continue to be dominant as surveys by RMB show that more ought to be done.
Among the major risks identified so far include unsafe tunnels, pits, shafts and open cast which expose miners and their communities to risks including death, injuries and noise exposure.
Poor working conditions, which are in conflict with human and labour rights, proper mining practices and basic occupational health and safety standards continue to be common place.
In the last fiscal year, a total of 81 people lost their lives during mining activities.
Government inspectors say that there is evidence of poor waste and tailing management whereby a majority of mining and quarry companies depose waste anywhere regardless of its impacts on environment.
With most of the mining being artisanal, poor mining and washing techniques, have seen most companies using ground sluicing whereby they recover less than 50 per cent.
Leonidas Simpenzwe, the Vice Chairman at Rwanda Mining Association, said that they are in support of the shift from artisanal to mechanised mining but called for support to bring in investors.
He said that in the distribution of the new deposits identified in the surveys, there ought to be bidding to identify the most suitable players.
Trade unions of labourers in mining sites have also called for increased professionalism to improve the quality of work as the sector grows.
They said that as the sector develops and increases its returns, it’s only sustainable if the quality of labour is improved.
Jean Marie Vianney Musemakweli, a representative of a trade union, said that among aspects that need to be improved include issuing contracts, formalising payments and using backing channels as well as including them in social security contributions.
The Government targets $1.5 billion in annual revenues from mineral exports by 2024.