Mining companies welcome revenue sharing scheme

Rwanda mining association (RMA) has praised government’s move to disburse 10 percent of the mining royalty tax back into communities surrounding mines through establishing development projects. Last week, the Cabinet approved the proposed mechanism for mining revenues sharing to support the development of communities living near mining sites.
Miners at Rutongo Mines in Rulindo District. Last week, the Cabinet approved a mechanism to share revenue from mining so as to support the development of communities living near mi....
Miners at Rutongo Mines in Rulindo District. Last week, the Cabinet approved a mechanism to share revenue from mining so as to support the development of communities living near mi....

Rwanda mining association (RMA) has praised government’s move to disburse 10 percent of the mining royalty tax back into communities surrounding mines through establishing development projects.

Last week, the Cabinet approved the proposed mechanism for mining revenues sharing to support the development of communities living near mining sites.

 

Jeannette Mutesi, the vice president of RMA says that move has come to support and streamline the already existing corporate social responsibility programs that the association has been carrying out for these communities close to mining sites.

 

“Revenue sharing program is definitely a good initiative for the citizens,” Mutesi said.

 

She added, “We have been working together with the government in corporate social responsibility programs in communities surrounding mining sites, such as paying for community-based health insurance (Mutuelle de Sante), and ‘Girinka’ one cow per family program,” Mutesi said adding that this is another way of giving back to the community.

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Minister Evode Imena.

Minister of State for Natural resources in charge of Mining, Evode Imena said the government is due to start this project next year, with a sum of Rwf300m.

Imena says that the initiative comes as a follow-up on the directive made by President Paul Kagame, last year, during Kwita Izina (Gorilla Naming ceremony), where he directed the ministry of natural resources to establish a mechanism whereby communities living around mining sites can directly benefit from the production.

Tourism sector has seen over Rwf2.6 billion invested in 480 projects in the entire country under the tourism Revenue sharing scheme and contributing to the welfare of communities surrounding national parks.

“You may find in a particular place, there is good mining activities taking place but people don’t benefit from those activities. Now we would like to bring them on board and tell them that ‘we are blessed to have a deposit close to you village and the deposit is helping to improve your livelihood,” Imena said.

The royalty tax in mining sector was introduced in 2013, which brought in $210 million but dropped to $160 million in 2014.

“4 percent of the export value of minerals is as royalty tax and goes to the public treasury. Now we will take 10 percent of the entire values (of royalty tax) and use it to fund some specific projects near mining sites,” he explained.

He said that finances will be channeled to Local Administrative Entities Development Agency (LODA), who will work closely with districts to select projects to be financed, which will be chosen by the communities.

“We have a target of 87 sectors; meaning that we can’t cover all of them at once with a project that can make an impact. Communities will be proposing projects, and then districts will choose among those which we will then fund. It will be something flexible, depending on the money available for that specific year, because mining revenues keep changing with fluctuating prices of minerals on the international market,” the State minister noted.

Through this scheme, the number of projects is not limited and the amount of money going into the fund is not limited, it is only the total sum of the percentage that will keep changing depending on the amount of the royalty tax.

“Royalty tax has been decreasing as the national export revenues decreased. But whenever we again reach our $400million target (of royalty tax), we will be able to have $10million injected in those communities; you can make quite a tangible impact,” Imena says. 

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