"Exports in the mining sector are expected to triple by 2017," predicted Evode Imena, Minister of State in charge of Mining in the ministry of natural resources, after the signing of a mining concession license with Pella industries to undertake mining in Rwamagana district.
Mining is the country's second biggest foreign exchange earner after tourism. Income from the industry is expected to grow to Frw 10.3 billion from Frw 5.46 billion by June 2014.
The projected increase comes from the introduction of a 4% royalty tax on the value of basic metals mined and a 6% levy on precious metals and gems that were announced earlier by Finance Minister Claver Gatete.
"The tax will make a significant increase in the share of direct and indirect taxes generated from the mining sector," Imena added.
Pella Industries is expected to set up a mining project valued close to $22million. The company aims to join other established players like Canada-based Simba Gold Company and Desert Gold Ventures.
But foreign companies and the government have had disagreements over the introduction of the new taxes by the Ministry of Finance. Mediation responsibilities have mainly been placed with Mining Association of Rwanda based in Kigali.
"We had discussions with the ministry of finance and stakeholders before the law was adopted but nothing changed," said Jean Malic Kalima, the association's president, in a phone interview. "The industry players and lawmakers still believe the increase of 4% and 6% is huge."
Rwanda is the world's fourth largest producer of tantalum, a metal used in mobile phones and video game consoles, accounting for about 12% of global production last year. Other minerals mined on a smaller scale are tin, tungsten and gold.
Rwanda development board CEO Clare Akamanzi maintained that, "Rwanda has various types of mineral deposits in which we look forward to working with new partners to develop and enable more investments as well as explore additional opportunities not yet discovered."