There have been reports that Gatumba Mining Concessions shut down early this year. For a country that is steadily relying on mineral exports, such rumours send the shock signals. The mining sector has fetched millions of dollars for the economy despite being exploited below its capacity.
And, after months of silence, CP Passano, the managing director of the firm, revealed to The New Times’ Ivan R. Mugisha the detail into the said closure and the prospects of the mining sector in the country. Excerpts;-
When did you first invest in Rwanda and what was the motivation?
We first invested in Rwanda in 2007; we did thorough research to determine the resources on the mine, and carried out various exploration exercises to ascertain the availability of mineral types and quantity.
Between 2007 to 2011 we invested close to $12 million on mining equipment and training; installed various plants, yellow equipment and earth mining equipment to remove and stockpile overburden, to break and remove rocks of various hardness and toughness and to process the ore and for reclamation efforts after the mine is closed.
We installed a unique testing lab that carefully and effectively tests and guarantees the production of pure minerals without impurities. The company put in place a spectro x-ray for analysing ores of cassiterite, iron, silka, wolfranite and other ores.
Apart from Rwanda having massive mineral potential, we were attracted and motivated to move in by the country’s peaceful environment, top notch cleanness, tight security and great leadership.
How big is your concession; how many people do you employ and how are the returns?
Gatumba Mining Concessions (GMC) is a true representation of a reputed mine, effectively carrying out exploration and mining using the required modern technology taking into consideration occupational safety and environmental protection. The concession sits on a 22,000 hectors of land, and has huge potential.
The mine employs more than 1,200 people. With reduced challenges the concession can mine up to 100 tonnes a month and earn $345,000 a month, totaling to $4 million a year. However, because of facing several challenges, the mine could not realise its full potential. Illegal mining and trading have reaped off the firm, reducing it into a non-profit making entity.
Reports suggest the concession closed down? What prompted the closure?
Let me make it clear that the mine has not closed down completely. We have just suspended operations as we try to find a lasting solution to the problems that have defined our worst mining experiences.
We have laid off many employees–from 1,200, we are remaining with only 50 at the moment as a result of vast challenges that have greatly affected our operations and income. We have worked tirelessly to curb illegal mining, negative influence from prominent individuals with vested interests and interference from the local authorities, but our efforts have been futile.
When are you reopening?
We are calling and waiting on the government to amicably solve and create a lasting solution to the challenges and once this is done the shareholders will be able to invest again and we will surely resume the operations.
Can you rate the potential of the mining sector in Rwanda having been the managing director of one of the major mining concessions?
The sector has huge potential and can greatly change the economic positioning of this country. So far, the sector has earned Rwanda millions of dollars and employed thousands with just little exploited. Last year, the sector exported 8,188 tonnes of minerals and earned $228 million. This was realised even with the sector experiencing massive challenges.
The sector in the recent years surpassed its second Economic Development and Poverty Eradication Strategy (EDPRS II)targets in export earnings: Exports for 2011 totalled $164 million from domestic production and re-exports (January, February and March 2011, before mandatory tagging was introduced on 01/04/2011), against the EDPRS target of $106 million in 2012.
What are the main challenges affecting the mining industry?
The sector has yet to realise its full potential due to the underlying challenges, ranging from illegal mining and trading to interference from the local authorities. The sector, too, experiences the environmental protection challenges, power cuts and interference from influential individuals who have vested interests in the sector.
But, most importantly, there is too much disruption from local authorities and individuals with “vested” interest in the mining sector. For example, some local authorities incite residents about environment issues, saying they are caused by mining activities. They should know that we use environment management procedures, and stop inciting people.
Another challenge is that there is too much illegal mining by the locals – and we do not even know where they sell the minerals since mineral tagging is a strict procedure that prevents illegal trade in minerals.
Lastly, what can be done to overcome such challenges?
Local leaders and Police should come to the rescue of mining investors to stop this scourge. To curb some of these challenges, the geology and mining department should ensure training of the local leaders and society at large on the long-term and universal benefits that will be reaped from the sector, making them appreciate the mining procedures in place and avoid illegal mining and trading which, to a larger extent, hurts the overall greater gains of the sector.
There should be a one stop centre, where all the mining related issues can be sorted instead of leaving it to the inexperienced local authorities to handle.