Amidst the global financial crisis, trade statistics show that Rwanda’s mining sector, a key revenue earner is struggling. The Business Times’ EDDIE MUKAAYA talked to the State Minister of Environment and Mining, Vincent Karega about the sector’s general performance. Below are the excerpts.
What is the general performance of the mining sector as a key contributor the country’s GDP?
There has been a general decline in the performance of the mining sector. The first quarter of the sector faced a serious drop in value of export on an average of 35 percent owing to the global financial crisis.
There was some relief in the second quarter having started on a positive note. However, this didn’t take a lot of time. May and June brought in drastic drop due to collapse of prices mainly on wolfram and prices not improving for coltan.
Only Tin is catching up but the general situation has led to reduced demand in the buying and therefore reduced production in Rwanda.
So what is the estimated decline in percentages?
We are talking now of a 61 percent drop in value in the second quarter compared to the same period last year. All combined (first and second quarter), this maybe a 47 percent drop.
We had projected to earn about $100 million by the end of the year but this may drop by 40 percent.
Hasn’t there been a drop in quantities?
Well, quantities also dropped but a significant fall was mainly on value. There were slight differences in quantities compared to value.
What are you planning to do about the status quo?
We are not losing hope. We take this slow-down period to complete the process of policy review and reorganisation of artisanal miners who are scattered and unsupported.
This means that after this crisis or at the end of the year, we have a clear reliable framework and for mining activities. We will have a focus on how to support this sector in our country and we hope the prices improve so that it continues to create a boom.
Are there any opportunities in the sector that can be exploited?
Apart from the minerals, we also note that the quarry industry is also not organised yet it has even more potential than mineral industry.
It is also easy to create quick value, more jobs and also avail construction material without pushing the country to spend its foreign currencies to buy products such as tiles and cut stones.
This is where emphasis is turning to. We don’t expect to export to Europe but there is a lot of demand in the region.
Do you have any expectations?
We are confident that the situation will come to down. Hopefully, the sector will revive its status soon hopefully next year.