By Elias Hakizimana.
Rwanda is advocating for traceability cost removal on exported tantalum mineral products as it hampers the sector development and remain a big threat to the sector development.
However, the Government of Rwanda expects to boost long-term investments in tantalum mineral that will benefit the sector from the miners who were surviving on short-time mining activities.
Yet, the money that would benefit miners and the entire mineral value chain is spent on traceability [to ascertain the true origin of minerals] as Rwanda has been considered among the countries that are in conflicts in the central African region.
This was revealed during the 59th General Assembly of the Tantalum-Niobium Study Centre (TIC) that took place in Kigali from October 15th to 16th, 2018 where various investors and experts in mineral exploitation convened in Kigali to learn how Rwanda exploit and advance its tantalum value chain.
John Crawley, President of TIC said that the situation is that Tantalum as a mineral is very difficult to extract, and that all of the countries in central Africa including Democratic Republic of Congo, Rwanda and Burundi.
He said that traceability cost is a programme governed by responsible mineral initiatives for verification on ground where people check independently the material.
“It is not perfect system but it is a system that provides security for the end user customers so that they can be sure that the material they are produced in this region is very scrutinised,” Crawley said.
Speaking to the media after officially opening the Assembly, Amb. Claver Gatete, the Minister for Infrastructure said that the government has put in place the Rwanda Mining and Petroleum Gas Board (RMB) to strengthen the mining sector and increase the profitability of the value chain.
He also said that the government established regulatory framework to improve the way mining is done.
Challenge for Rwandans
One of the biggest challenge is the traceability of exported minerals as Gatete said.
“We show the journey of our exported minerals from Rwanda and make sure they are reaching to safe countries but a challenge is that the way is done through is expensive, we try to seek advice from this general assembly on how to do this in a way that is not expensive as it costs a lot of money. We see that transparency is a better way of doing this business,” he said.
Gatete said that the new strategy of mining activities will see the increase of value of tantalum and the entire value chain.
“What is high at our level of miners is the cost of traceability we pay at the ministerial level for people who follow on our tagging system and we also pay at the markets where we take refined mines, it is a double taxation. For Rwanda, we pay $130 per one tonne while this becomes $170 per one tonne at international markets. It can be better for us when this traceability cost is removed because our country is 99 percent traceability covered; there is no conflicts in our country,” said Jean Malic Kalima, the Chairman of Rwanda Mining Association.
Francis Gatare, the Chief Executive Officer of Rwanda Mining and Petroleum Gas Board said that the cost of traceability was established on the basis of volume not on the basis of value.
“When the prices rise, the cost of traceability relative to the volume of the mineral reduces. But in the mineral commodity market, the prices are volatile, when they go down eventually they come down, when they come down the cost does not correspond to the come down with it, so, as the proportion, the cost increases and what we are advocating for is to have a cost that is value-based, specific and low enough especially for the upstream mining community,” Gatare said.
He noted that many commodities that demand traceability or single origin commodities should therefore reward people who are in the production instead of costing them.
Gatare requested the TIC executive committee to accept the request of Rwanda regarding the removal of traceability cost as Rwanda is a peaceful country. “We wanted you to understand the value chain and know who does what and what materials used to trust our refined Tantalum products,” he reiterated.
Foreign Tantalum mineral investors have been in Rwanda to learn the experience and the process in which Rwanda’s Tantalum are refined before they reach to their international markets.
Mining is the second largest export revenue earner in the country. In 2017, the sector generated $373.4 Million of foreign exchange.
The government targets to earn $800 Million from the sector by 2020 and $1.5 billion in 2024.
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