Large mining firms cry foul as Rwanda plans new laws
The East African - 1 hour ago
By BERNA NAMATA The EastAfrican
Posted Saturday, June 21 2014 at 17:48

Workers at Rutongo Mines, the first firm to receive an export
certificate, in Rwanda's Rulindo district. Photo/Cyril Ndegeya
IN SUMMARY
Rwanda's mining sector is largely dominated by artisanal and
small-scale miners, and employs about 30,000 people. Large mining
firms are calling for close monitoring of activities of small-scale
miners to ascertain the source of their minerals. Their concerns come
at a time when Rwanda is under pressure to exploit its mineral wealth,
and activists allege that it has taken advantage of the instability in
the Democratic Republic of Congo to plunder its resources.
As Rwanda proposes changes to streamline the mining industry through a
new law currently in parliament, large firms are raising concern over
illegal mining and trading in minerals, which they say could drive
them out of business.
"Our biggest risk is the big informal sector. These are the guys
making the money, which puts us in the mining industry at risk," said
Kevin Buyskes, general manager of Rutongo Mines, one of the country's
biggest mining firms, which is owned by Tinco Investments Ltd.
Rwanda's mining sector is largely dominated by artisanal and
small-scale miners, and employs about 30,000 people.
"Illegal traders are competing among themselves to see who pays the
highest price. Unfortunately, people do not care if they get caught,"
Mr Buyskes said.
He was speaking at a meeting called to adopt the report on
"Environmental, Social and Economic Dimensions to Consider in the
Mining Industry in Rwanda," hosted by the United Nations Economic
Commission for Africa sub-regional office in Kigali.
Mr Buyskes said that local communities continue to carry out illegal
mining on concessioned areas.
Jean Malic Kalima, regional director for Wolfram Mining and Processing
Ltd, a leading exporter of minerals, called for close monitoring of
activities of small-scale miners to ascertain the source of their
minerals.
"These small-scale miners do not invest; they pay more money to our
workers to sell to them what they get from our sites," said Mr Kalima,
who is also the head of Rwanda Mining Association.
Their concerns come at a time when Rwanda is under pressure to exploit
its mineral wealth, and activists allege that it has taken advantage
of the instability in the Democratic Republic of Congo to plunder its
resources.
As a result, the government has made it compulsory for all Rwandan
mining firms to certify their minerals, in an effort to curb illicit
trade.
"It is not alarming, but it is still a concern. Even though the
certification process is going on, there are people who still break
the law," Dr Michael Biryabarema, Director-General of Mines and
geology in the Ministry of Natural Resources said.
Mr Biryabarema said the government is stepping up measures to curb the
illicit trade by forcing trading companies to enter into contracts
with their suppliers.
Last year, Rutongo Mines Ltd, which trades in tin, became the first
local mining company to be issued the first International Conference
on the Great Lakes Region (ICGLR) Mineral Export Certificate.
The ICGLR mineral tracking and certification scheme was established to
curb the illegal trade in tungsten, tin, tantalum and gold.
Rwanda has 548 mining sites, with cassiterite (tin ore), wolframite
(tungsten ore) and coltan (tantalum ore) as the main minerals.
The government is implementing reforms to boost investment in the
sector. Among the key proposed changes in the laws is one to demarcate
the country into mining blocks of 400 hectares each, which will be
allocated to mining firms. Some companies have had big concessions of
up to 20,000 hectares.
Since 2011, the government has been putting pressure on the companies
with big concessions to increase their investment or lose the
contracts.
It has also been awarding licences to new companies. As a result, in
2012, investment in the sector hit a record $46.8 million. The growth
was largely driven by coltan, whose value increased by 136.5 per cent
and 115.4 per cent in volume to reach 2,466.02 tonnes in 2013, from
1,144.68 tonnes in 2012.
The 2013 export figures are the highest ever for the sector, and in
2014, it is expected to grow to $265 million due to increased
investments.
"We think we can attain the target of export earnings not by opening
new mines by improving efficiency in the sector," Mr Biryabarema said.
Rwanda is also introducing a royalty on different types of minerals —
at 4 per cent of the value of extracted minerals on basic metals and
six per cent on both precious metals and precious stones.
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