11 July 2014

Rwanda: New Mining Law Targets Large Scale Investors

Government is targetting large scale investors under the amended mining Law published yesterday in the Official Gazette, as part of efforts to ensure maximum productivity of the sector.

Challenged with under exploitation despite its enormous potential, the mining sector has shown signs that it can be Rwanda's leading foreign exchange earner and according to the State minister for mining, Evode Imena, the new law marks an important shift.

"The main thing that has changed in the law is the provision of new types of licenses. With the previous law, we were only allowed to grant a license of five or 30 years - nothing in-between. Five years was for artisanal or small-scale mining, while 30 years was for large scale," Imena said yesterday.

"This was problematic because most mines tend to be small. It means they try to be organised and use skilled labour, but the duration of five years was too short for them, yet government was reluctant to grant 30 years to small-scale investors because they do not show capacity to manage mine concessions on a large-scale."

"The duration of license now depends on the size and nature of mineral deposits, as well as the size of investment to be injected in a concession. This will be shown through a feasibility study conducted by the investor."

"Now the smallest license will be for five years and the longest for 25 years, In-between we can give anything depending on the nature and size of the deposits," the minister said.

The mining fraternity welcomed the new law.

"The old one was unfavourable since it required an investor to only get a license of five or 30 years, many investors were not ready to carry out proper business plans because the duration given by government was not flexible," Jean Malic Kalima, the president of Rwanda Mining Association, said.

"This is a long term sector and most investors look at the future. The new legislation will allow us to operate more professionally and profitably."

Mining is the second largest export sector in Rwanda after agriculture, fetching $228 million last year - from cassetirite, wolfram and coltan.

The sector employed at least 25,000 people by 2012, most of whom are artisanal or small scale miners.

The sector experienced its highest growth between 2008 and 2012, at 44 per cent per annum. However, this year, it has been heavily susceptible to price fluctuations on the international market.

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