20 February 2016

Rwanda: Govt Cancels Mining Concessions As Investors Fail to Abide By Rules

The Rwandan government has so far cancelled nine mineral exploration and exploitation concessions on grounds that the investors have breached the agreements.

The latest mines to be repossessed by the government include Sebaya, Mara, Giciye, Rutsiro and Nemba. The government had revoked the Bisesero, Gatumba, Musha and Ntunga licences, bringing the total to nine between 2011 and 2015.

A government official told Rwanda Today that the investors ran down the mines as they failed to invest substantially in increasing production. They are accused of failing to implement the technical and financial offers in the contracts -- which required investments in latest equipment, skills and technology to increase production.

With the high-calibre investments and increased production, the government targets $400 million annually from the industry, which should be able to create 60,000 jobs by 2018.

"It was first come, first served," said Evode Imena, State Minister for Mining, as he explained the weakness on the government side in allocating the concessions for the public mines to the investors in 2007.

This means due diligence on the investors was not carried out and some of the investors did not have experience in mining, Mr Imena said.

However, the cancellation of the concessions has not dampened the growing global appetite for Rwanda's minerals, with government officials reporting that they receive 50 prospective investors seeking mineral exploration and exploitation licences every month.

The latest entrant in the local mining sector is Tri Metals, a subsidiary of Mawarid Mining LLC, which is based in the Sultanate of Oman.

The firm, which is also prospecting for gold in Tanzania, was awarded a five-year mineral exploration concession for the three blocks -- B, C and D -- in Bisesero.

Until 2011, Bisesero Mines, which are located near the border with Democratic Republic of Congo (DRC), belonged to an American firm, Bay View Group, LLC (BVG).

"The concession licence of BVG was cancelled after they failed to meet the contractual obligation to invest the agreed amount to increase production" said Mr Imena.

"They also failed to adhere to the strict environment regulation by polluting the environment."

Boost mineral production

Tri Metals plans to boost mineral production by 20 per cent after investing $39 million over the next five years. The investor is also acquiring a 85 percent stake at an undisclosed amount in Havila Mines near Nyanza, Southern Province.

"The tin in Rwanda will be processed into concentrates for the export market," said Tariq Al Barwani, managing director, Tri Metal Rwanda.

The government also auctioned the 22,000-hectare Gatumba Mines to four companies that committed to invest $37million in exploration, mining and mineral processing.

According to official figures, Rwanda produced 13,990 tonnes of minerals last year. This means Tri Metal is set to add another 2,798 tonnes, which is to be processed for export.

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