2 October 2017

Rwanda: How Government Plans to Increase Mineral Revenues Sevenfold By 2024

Photo: The New Times
Miners in a tunnel at Gatumba Mining Centre in Ngororero District. (file photo).

Sustained investments into modernising mining activities, exploration for new types of minerals, and adding value to the gems before they are exported will help Rwanda achieve its target to increase seven times by 2024 the revenues from mineral exports, officials have said.

The Chief Executive of Rwanda Mines, Petroleum and Gas Board, Francis Gatare, said the Government's recent announcement that it targets to achieve $1.5 billion in annual revenues from exported minerals by 2024 is attainable.

"It's absolutely achievable and we have agreed with stakeholders to double the current revenues every two years in order to achieve the target in time," Gatare told The New Times.

Last week, Prime Minister Edouard Ngirente, outlining the Government's seven-year programme before Parliament, said the Government targeted to increase revenues from mineral exports over the next seven years, from the current $200 million a year to $1.5 billion by 2024.

"We will upscale our mining sector by completing exploration of potential mineral areas to establish the extent of national resources and reserves, in terms of quantity and quality with the aim of exporting $800 million by 2020 and $1.5 billion annually by 2024," the premier said.

While Ngirente mentioned further exploration for mines, Gatare explained last week that the mining sector will also be modernised and current practices of artisanal mining turned into large and industrial mining operations to increase productivity.

The official said that 75 per cent of the country's mining operations are currently artisanal with very low recovery rate for minerals but, going forwad, miners will be equipped with skills and modern machines so they can carry out large and industrial mining activities.

"Small and artisanal miners dominate the sector today but they will be grouped into big cooperatives so they can be commercial, industrial miners," Gatare said.

He also said once the Government is done with on-going exploration exercise that will establish the extent of the country's mineral resources including oil and gas reserves before the end of the year, steps will be taken to change the current policy framework for mining.

Plans underway

As part of innovations to achieve the target set by the Government, the official said, miners will see the capital requirements for getting a mining licence increased so the sector can attract more capable entrepreneurs.

"We are carrying out licence reviews for miners and the whole policy framework is being reviewed to cater for the implementation of the mining targets," he said.

But increasing productivity alone will not be enough to achieve the revenue targets set out by the Government since Rwanda cannot control price changes for the gems on the international market, experts say.

"We can increase the production but if we are still exporting raw materials we are at a high risk because the international market fluctuates a lot. Unless we invest in exporting semi-final products we will not have control over the prices," said Teddy Kaberuka, a Kigali-based economist.

Gatare agreed with the economist, and said the Government will invest in adding value to the extracted minerals before exporting them.

"When you add value to minerals here in the country, price fluctuations are not that radical," he said.

Rwanda currently exports mainly four types of minerals including gold, cassiterite, coltan, and wolfram.

Gatare said ongoing explorations for more types of minerals aim to diversify Rwanda's mineral exports and establish the real extent of her already known mineral deposits to facilitate proper extraction.

The Chairperson of the Rwanda Mining Association, Jean Malic Kalima, said the Government needs to set up a fund to facilitate miners to access soft loans so they can scale up their activities.

"Rwandan investors should be facilitated to invest in this sector. They need access to soft loans and that's why the Government should set up a special fund to facilitate that by providing loan guarantees for miners," he said.

"If the Government can set up the fund, we can do more to invest heavily in this sector and for a longer term."

Rwanda

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