Rwanda has said that the ITSCI programme, an international scheme designed to regulate minerals mined from the Central African region, is expensive, unnecessary and prohibitive for miners.
Rwanda is subject to what is known as Section 1502 of the US Dodd-Frank Wall Street Reform and Consumer Protection Act, which covers tin, tantalum, tungsten and gold, all of which are produced in large quantities in the country.
It is also a party to the International Conference on the Great Lakes Region (ICGLR) and the Organisation for Economic Co-operation and Development (OECD) due diligence guidelines.
All these legislations require companies operating mines from East and Central Africa to perform due diligence and traceability on minerals and mine sites to prove operations do not violate human rights and minerals are not being illegally sold to fund conflicts and other illegal activity.
To meet the traceability and due diligence requirements, Rwanda implements ITSCI, which works on the ground via managers deployed at mining concessions that seal, tag and record bags of minerals produced to efficiently monitor and contain potential illegal dealings.
The cost of such activity is somewhere between $130 per tonne and $180 per tonne depending on the type of mineral produced.
“We continue to argue that the cost of traceability and due diligence must be reduced to make it affordable and fair,” Francis Gatare, the Chief Executive Officer of Rwanda Mines, Petroleum and Gas Board (RMB), told participants at a mining forum taking place in Kigali.
“It’s a reason why we have tried as a country to attract other competing instruments.”
Around 2009 and 2010, the Organisation for Economic Co-operation and Development (OECD) placed restrictions on mineral exporters from the region that surround Democratic Republic of Congo (DRC).
It was a time during which experts had indicated that there was rising concern of illicit trade of minerals like tungsten, tin, tantalum and gold motivated by the armed conflicts in the Eastern DRC.
However, Gatare believes the argument that conflicts in the region was caused by people who were looking to benefit from minerals, particularly in the DRC and that it would be eliminated by restricting mineral exports, was a wrong premise.
“We do not agree with that premise. Despite the restrictions placed on the regional mineral exporters, we did not see conflicts in DRC stopping. The cause of conflict is ideological, political and to resolve those conflicts, the root causes must be addressed not for scapegoats,” he said.
The result of the restrictions placed on regional exporters of minerals saw programmes like ITSCI come up, but many players have continued to complain that they are unfair but have not pulled out as they fear they may not sell their minerals without ITSCI certification.
Jean Marie Vianney Faida, a local miner, says that indeed these regulatory schemes continue to be a big burden to companies processing and trading minerals from the region.
“The cost of the (due diligence) exercise is high, it is unfair. Their costs are based on volumes not prices, which means regardless of the market conditions they will maintain the same costs,” he noted.
Rwanda is resorting to other partners that do not make it hard for domestic mineral exporters to do business.
One of those initiatives that the country wants to adopt is the Voluntary Principles on Security and Human Rights (VPs), a multi-stakeholder initiative that assist extractive companies to balance security concerns with human rights.