The cost of tracing minerals is hurting the development of Rwanda’s mining industry, Rwanda Mining Association (RMA) said yesterday as it pushed for the reduction or completely abolishing the associated fees.
The association made the case for the scrapping of traceability charges during the ongoing General Assembly of the Tantalum-Niobium in Kigali, arguing that Rwanda is a conflict free country and should not be subjected to such charges.
Jean Malic Kalima, the Chairman of Rwanda Mining Association, said that the high traceable costs were hurting productivity and undermining efforts to professionalise the sector.
“I would say that the cost is very high, we pay traceability fees locally and at the international level when we export the minerals. This is double taxation and it’s unfair,” Kalima said.
Mining companies spend a combined estimated $5 million (about Rwf4.4 billion) every year on treatability and certification of minerals from Rwanda.
For instance, Kalima says, a mining company pays $130 per tonne of tantalum traced in the country and $170 at international level.
“That is very high and we don’t think there is need for such a fee because traceability fee was established to ensure no minerals are sourced from war zones but our country is safe,” he noted.
More than 150 participants from 25 countries involved in the tantalum and niobium industry supply chain from across the world are meeting in Kigali to discuss mining processes, including trading, processing, metal fabrication, capacitor manufacturing, recycling, other end-users such as medical and aerospace among others.
Rwanda implemented the ITSCi Traceability and Due Diligence System, an international requirement designed to prevent illegal trade in minerals, particularly coltan, cassetirite, wolframite and gold from Eastern and Central Africa.
Tag managers are deployed at mining concessions to seal and record minerals produced in order to efficiently monitor and contain potential illegal dealing in minerals.
John Crawley, the President of Tantalum Niobium International Study Centre (TIC), said traceability of minerals extracted in Central Africa is still relevant.
He added that even the existing traceability activities were not perfect.
“The point is that if you want very good traceability, it is expensive because you need independent people on the ground close to the source. It is difficult but we need to comply,” he said.
Need to keep pushing
Francis Gatare, the CEO of Rwanda Mines, Petroleum and Gas, said the Government acknowledged that the cost for traceability is high and affects miners, especially upstream ones and need revising.
He said that the current cost was set based on the volume of mineral production and not on the value, which it actually affects.
He said that the meeting would serve as a platform to review the price to make it effective.
“What we are advocating is to have a cost that is value based or that is specific or low enough especially for upstream mining communities,” he said
Many commodities which demand traceability for single origin commodities, he said, usually should reward people who are in the production but when these mechanism was put in place these principles were not thought through.
“There are other options that are being considered and we are continuing to advocate for changes, we are optimistic that if it is not done in this meeting it will be done soon but certainly there a consensus that the cost is not reflective of what it should be,” Gatare noted
The Minister for Infrastructure, Claver Gatete, told the participants that while the Government of Rwanda promoted traceability to fully comply with the international requirement especially on 3Ts namely Tin, Tungsten and Tantalum, the price should be revised.
“It is timely to review associated costs of the mechanism, especially to the upstream small people, the local miners. I trust this meeting will explore how to evolve into a more cost-effective mechanism, leveraging modern new technologies,” he said
Africa accounts for 90 per cent of the global tantalum production.