The Government, in partnership with Rwanda Miners’ Association, plans to double mineral productivity in the next two years in an effort to generate $400 million by 2018 from the current $166 million, Francis Gatare, the chief executive of Rwanda Mines, Petroleum and Gas Board (RMPGB), has said.
Gatare said entities involved in mining activities in Rwanda should make use of the recovering mineral prices at the international market, and engage in product diversification and value addition to maximise gains.
Prices of cassiterite, coltan and wolfram at international market have recovered from a sharp fall they suffered in the last two years. Mining sector players say this is encouraging and good for the economy.
The decline in mineral prices had for the last few years discouraged mining companies because they were not getting due returns from their investments, thereby reducing mineral export revenues.
The Minister for Trade, Industry and EAC Affairs, François Kanimba, told The New Times last week that, thanks to the rise in mineral prices globally, “production volume will increase because there are those who had stopped extracting minerals because of low prices they fetched.”
The Chairperson of the Rwanda Mining Association (RMA), Jean Malic Kalima, said since the beginning of the year, mineral prices have been gradually rising mainly for cassiterite from $13,000 in 2015/16 to between $19,000 and $20,000 per tonne at international market.
Before 2015, he said, a tonne of the mineral cost from $21,000 to $22,000.
“Now what has been realised is that the prices of cassiterite are increasing. Wolfram prices also increased at about 40 per cent. Coltan prices rose by between 28 and 30 per cent,” he said.
Innocent Mulindahabi, the president of COPABAMANYA, a cooperative that extracts coltan and cassiterite in Bugesera District, said mineral prices at the local market have been gradually increasing compared to last year.
The cooperative gets about two tonnes of minerals per month.
“A kilogramme of cassiterite that used to cost Rwf4,000 is now Rwf7,000 or Rwf8,000,” he said.
This means that productivity will increase because when revenues increase, a mining entity employs more workers and invests in equipment and efforts, he said.
Implication on economy
According to the central bank’s Monetary Policy and Financial Stability Statement, published in February, the mining sector had continued to perform poorly since 2015 due to the fall in international commodity prices, with exported value of the main minerals (coltan, cassiterite and wolfram) declining from $ 117.81 million recorded in 2015 to $ 86.42 million in 2016.
The Statistical Yearbook by the National Institute of Statistics of Rwanda shows that the volumes of exported minerals cassiterite, coltan and wolfram as well as other minerals, 13,990,034 kilogrammes were exported in 2015 down from 16,357,478 kilogrammes in 2014.
However, exported minerals were lower in volumes in 2013 when only 9,638,570 kilogrammes were exported.
Overall, Rwanda’s mineral exports generated $149,082,443 in 2015 down from $210,680,316 in 2014 and $226,189,315 in 2013.
Gatare, who was recently appointed to head the newly-created mining and petroleum board, said Rwanda’s mineral export revenues, compared to 2015, slightly increased to $166 million.
The central bank’s monetary policy explained that such improvement was largely thanks to the good performance registered in the other minerals (gold bar and gemstones), which grew by 156 per cent in value, from $31.27 million in 2015 to $80.06 million in 2016.
Gatare said cassiterite was priced at over $20 a kilogramme in 2013, but went down to $16 in 2015. Currently, he said, a kilogramme is between $19 and $20.
For coltan, he said, a kilogramme was over $180 in 2013, but plummeted to about $55 in 2016. It now goes for about $70. Wolfram was priced at $220 a kilogramme in 2013 but slashed to $120 and is picking up to $140.
Gatare said the fall in mineral prices had a double effect; it discouraged investment as there was a speculation that the reduction in prices would continue, while low prices resulted in some entities engaged in divesting from the sector.
“We saw that companies that are involved in mining were not committing additional investments, particularly in equipment and other forms of modern mining facilities to increase productivity. Instead, you saw mining predominantly in artisanal miners, and in some cases, reduced production. That is why the last three years have seen reduction in revenues from the mining sector,” he said.
Fortunately, Gatare said, the global market price now is rebounding to demand more precious and industrial metals, which is contributing to the rise in prices.