13 July 2014

Rwanda: New Mining Law Will Enhance Efficiency

LAST WEEK, the Government gazetted the new mining law, which observers say will help streamline a sector that's increasingly playing a key role in the country's socio-economic development.

In recent years, mining has increasingly fetched the country significant amounts of revenue, raking in US$228 million last year, which saw the sector become the second largest foreign exchange earner after agriculture.

The timing of the new legislation could not be more significant, considering that the sector has, over the years, struggled with challenges that, if addressed, could see the industry make important gains.

With the reforms, the Government will now be in position to issue operating licenses that truly correspond the capacity of the applicant- ranging from five years to 25 years - as opposed to previous arrangement when licenses were for either five or 30 years.

This will allow operators to perform at maximum capacity, thus employing more people and spreading the benefits to more players in the value chain, as well as benefit the country.

But the new mining law should help address other challenges that continue to dog the sector, which has seen some concessions shut down or suspend operations, thus affecting many households as well as the economy.

Some of these challenges are associated with continued artisanal mining practices while industry players have also cited patterns of unfriendly decisions by local governments, among others. These are symptoms of a sector that's in its infancy and thus still streamlining.

While the new legislation will help iron out any ambiguities and seal the loopholes in the previous laws, Government authorities and all the other actors should endeavour to observe and enforce the law.

The mining sector has shown incredible potential and it must be given all the support it needs to truly thrive.

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