By Elias Hakizimana
Rwanda’s mining sector is set to grow in both quality and quantity of produced minerals, as well as revenues thanks to a new £ 4.5 million (about Rwf4.5 billion) partnership that seeks to address challenges including skills gaps of actors and low prices at international market.
The project seeks to enhance skills and capacity to miners and avail materials/equipment necessary to perform productive and professional mineral operations.
Moreover, this partnership between the Government of Rwanda and United Kingdom’s Department for International Development (DFID), is expected to increase investment in the sector.
The development comes at a time when Rwanda targets to increase mineral exports revenues sevenfold from the current $200 million to $ 1.5 billion in 2024, according to Government Seven Year Programme which runs from 2017 to 2024.
The implementation of the three-year project started in April 2017.
It also targets to provide tovactors in mining sector access to information on mining sites.
Speaking on October 3, 2017 during the launch of this project dubbed “Sustainable Development of Mining in Rwanda” (SDMR), in Kigali, Francis Gatare, Chief Executive Officer for Rwanda Mines, Petroleum and Gas Board said that most of the challenges facing the sector will be addressed through this partnership.
“The perceived imbalance in the benefits to the various actors along the value chain is the result of many things, a lot of which we are in the process of organizing and some of which will be addressed though regulations, others through the value chain and formalization of that,” Gatare said.
He said that all the challenges were affecting the production even at the local markets.
“Number one is the segmentation of the actors in the sector particularly in the production of mining because the actors are too small and what they are producing is very small, and none of those is able to impact on the cost they can command even at the local market to the traders.” Gatare noted.
“Secondly, a lot of them are also operating in sub-contracting model and also the existing concession owners are not always the ones doing mining,” he added.
Gatare explained that the project will change the mining sector into a vibrant and economically viable venture able to satisfy market demand .
“Part of what we are organizing to strengthen the sector is to make sure we have large operators in production, some of them will be under properties others will be to join ventures to turn the mining company into truly large company that can have scales, this way they can impact on the demand.
Avoiding middle players
Gatare said that middle men used to cause losses to mining sector, pointing out that one of the targets of the project is to reduce such informal trade employing middle men in mining trade.
“[Since the beginning of the year], many have been into very strict scrutiny to make sure we remain those who will add value to the chain and to make sure those who remain make the true benefit to the sector,” Gatare said.
He highlighted some issues like traditional and artisanal used in mining sector and small scale miners which also were among the reasons of poor mineral productivity.
“Mining sector can be more productive and contribute enough to the country’s economic development but, rudimentary technologies hinder the achievement of such a move,” Gatare observed.
“Successful strategy needs to ensure minors are secured, skilled enough, and use modern equipment as well as make big investment,” he said.
He also said that investors feared to bring their money into Rwanda’s mining sector due to the protracted conflict between Rwanda DR Congo over mineral origin, which resulted in establishment of mineral traceability from mine to market to solve the dispute, a practice which seemed to complicate investors over some years ago.
He added that this project will support the current goals to improve the sector and encourage investors.
“Nowadays, investors are coming (back) in the sector and together with these partners, we will gradually approach other investors to show them the truth so that we increase investment,” Gatare said.
According to Kato Kimbungwe, DFID Team Leader in charge of economic growth, the project seeks to help the government of Rwanda to eliminate all the challenges facing mining sector including facilitating investors to access to finance, processing and adding value to mines produce and other inputs which will contribute enough to make better change.