Miners have appealed to financial institutions to extend loans to them, saying lack of access to credit facilities is one of the challenges the mining industry is facing.
Mining is associated with a lot of risks and as a result, many financial institutions are reluctant to offer loans to miners.
But speaking at celebrations to mark the International Mining Day in Kigali yesterday, Jean Malic Kalima, the president of Rwanda Mining Association (RMA) urged banks to change their attitude.
“Banks look at mining as a risky business and are reluctant to offer loans to miners yet mining is the second largest foreign exchange earner in the country. Our wish is to have a guarantee fund similar to Rwanda National Climate and Environment Fund (Fonerwa),” Kalima said.
He said a few commercial banks in Rwanda are willing to provide miners with loans, saying that 77 per cent of them are offered by only one bank.
He added that even those giving the loans are offering them at a high interest rate for short terms yet the mining business takes longer to generate profits.
Besides, Kalima said miners are facing the burden of several charges such as traceability fees in addition to 4 per cent export tax.
Dr Vincent Biruta, the Minister for Natural Resources, said several measures are being taken to improve the mining sector.
He commended the sector for its tremendous contribution to economic development.
“We want to professionalise the mining sector by building the capacity of miners and providing waste management systems,” he said.
The minister said banks were reluctant to give loans due to the short term mining licenses but the new mining law which extends the license period from five to 25 years depending on the size of the project will help address the issue.
On taxes, the minister said in the next fiscal year, the mining association will be consulted during the drafting of the budget proposal.
Evode Imena, the State Minister in charge of Mining, said government remains committed to ensuring safer mining.
“Professional mining is safe mining. Our industry can only grow if we continue to prioritise the safety of miners. In addition, we are encouraging investment in technology and making loan facilities available for potential investors,” Imena said.
He added that there are currently investments in geological works for gold and gemstones, an addition to the country’s three key minerals; casiterite, wolfram and coltan
Currently, over 500 companies are carrying out mining activities in Rwanda, employing over 34, 000 persons.
Monthly mineral exports stand at between 30 and 35 tonnes annually. The value of mineral exports decreased by 18 per cent to $191.3 million (Rwf132 billion) this year from $226 million (Rwf156 billion) in 2013, owing to low prices on the international market for Rwanda’s traditional minerals.
The figures exclude the months of November and December – with government expecting to earn $207 million by the end of the year.
This year’s mining day was marked under the theme: “Professional mining as a pillar to growth and sustainable development.”