5 January 2016

East Africa: Rwandan Miners Turn to Mombasa Over Mysterious Theft of Goods in Dar

The hash-tag, 'WhatWouldMagufuliDo,' was among 2015's most trending topics on Twitter but there's one more question for Tanzania's new President John Pombe Magufuli; what will he do on learning that Rwandan miners are abandoning using Port of Dar for Mombasa, over theft?

Following allegations of repeated theft of Rwandan minerals while in transit to overseas customers, the affected traders have now resorted to using the Kenyan Port of Mombasa to avoid further losses, The New Times has learned.

Among the firms that have made the shift to Port of Mombasa is Mineral Supply African Ltd (MSA), arguably Rwanda's leading exporter of precious stones. The firm confirmed that it is now shipping some of the cargo through Port of Mombasa, albeit being a longer route and definitely more expensive.

It takes seven to 10 days transporting a vessel through Mombasa, at an extra cost of $500 (about Rwf370,000).

"It is a precautionary measure. For instance, if we have three containers to ship, we move two through Mombasa and the other through Dar es Salaam," Fabrice Kayihura, MSA's deputy chief executive, said last week.

Kayihura explained that by shipping through the two ports, they hope to avoid the possibility of losing all cargo incase thieves strike again at Dar es Salaam, where they have been victims of multiple thefts on several occasions in recent years.

The most recent theft the exporter suffered was about four months ago when MSA and another shipper, Trading Services Logistics (TSL), lost minerals worth a total value of $2 million (about Rwf1.5 billion).

An MSA container with 24 tonnes of Coltan worth $1 million (about Rwf730 million) was destined for delivery to a buyer in China but it was mysteriously robbed of its contents and stuffed with rocks that were only discovered by the client.

"When the cargo arrived in China and the sealed containers were opened, they found concrete cement bricks inside rather than drums containing the coltan mineral," David Bensusan, MSA's chief executive, said in an interview last October.

Meanwhile, TSL also lost two containers, each containing 12 tonnes of coltan, with a combined value of over $1 million destined for customers in Japan and Belgium; the thefts are yet to be resolved.

Coltan is a precious mineral used in various electronic devices, including smartphones

More than 70 per cent of Rwanda's maritime trade is done through Dar es Salaam with the balance through Mombasa, mainly because of the proximity to the former.

However, a persistent claim of corruption in the management of the Tanzanian port in recent years has left Rwandan shippers frustrated at the lack of action.

The negative developments at Dar es Salaam come at a time when Kenya Port Authorities (KPA) is investing heavily in improving facilities and efficiency at Port of Mombasa aimed at boosting cargo volumes from the Northern Corridor countries.

Magufuli hope

However, Jean Malic Kalema, the president of Rwanda Miners Association (RMA), expressed hope last week, saying the union is optimistic in President Magufuli's administration to fix the rot at Dar es Salaam port, citing his recent sacking of top port officials over corruption.

Just over a month in office, President Magufuli sent home, Tanzania Ports Authority Director General Awadhi Massawe, board chair Joseph Msambichaka and Permanent Secretary for Transportation Shaban Mwinjaka on charges of corruption and lack of accoutability.

"We have had a difficult year, with the theft of cargo and poor prices internationally, but our members are hopeful that things will gradually improve," said Kalema.

Mining is the second largest export in the Rwandan economy; the sector grew by 11 percent and generated about $210.6 million of foreign exchange in 2014.

But 2015 was a bad year for the sector that is expected to register a negative annual growth of 11.1 per cent mainly on account of poor global commodity prices after the value of Rwanda's mineral exports dropped by 43.3 per cent between January and November 2015.

Not even the year 2016 is expected to be better for mining as the government is projecting yet another poor run that will see the sector growing at negative rate of 2 per cent.

In spite of the weak prospects, RMA's Kalema commends the government which he says has consistently supported the sector and also engaged its Tanzanian counterparts in pursuit of answers regarding the theft of minerals belonging to some of RMA's members.

At the vanguard of that engagement was Rwanda's Ministry of East African Affairs, which hosted a delegation of Tanzania Port officials late last year in Kigali and facilitated a meeting with members of the country's private sector.

During the meeting, outstanding issues, including the persistent thefts were discussed and the port authorities pledged their commitment towards resolving the problem, but days after they had left the country, MSA and TSL received reports that they had lost their cargo, again.

The decision by some of mineral exporters to start using Mombasa was not taken by the association but Kalema said he supports members to explore all options that provide maximum security of their products for safe delivery to customers.

Rwanda has also expressed its readiness in working closely with President Magufuli's administration to cement bilateral relations between the two countries, a development that will give miners more hope of putting an end to the mysterious thefts.

This comes after Foreign Affairs minister Louise Mushikiwabo delivered a special message, two weeks ago, to President Magufuli from President Paul Kagame in which Rwanda assured of continued cooperation with Tanzania politically, socially and economically.

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