Container theft at Dar port raises freight costs for Rwanda exporters

Friday May 1 2015

A cargo truck heads to the Indian Ocean coastal ports from Kigali business zone in Nyabugogo. PHOTO | DANIEL S NTWARI |

A cargo truck heads to the Indian Ocean coastal ports from Kigali business zone in Nyabugogo. Cases of theft at Dar es Salaam port targeting Rwandan mineral cargo have resulted in a sharp increase in transport costs. PHOTO | DANIEL S NTWARI |  NATION MEDIA GROUP

By KABONA ESIARA, RT Special Correspondent

Cases of theft at Dar es Salaam port targeting Rwandan mineral cargo have resulted in a sharp increase in transport costs, further reducing revenues in a subsector depressed by falling global mineral prices.

The cost of transporting a container of minerals from Kigali to Dar has shot up by 271 per cent from the previous $3,500 to $9,500 to cover what transporters call “high-risk valuable minerals.”

The exporters are charged an extra $6,000 to pay private armed guards who offer escort services to the Rwandan minerals.

The escort services are required from the Rusumo border point on the Tanzanian side to the port. The trucks are also fitted with electronic security gadgets to beat the racketeers — an additional cost.

“Hiring armed guards to escort mineral consignments is among the pre-requisites by overseas-based insurance firms to take up the risk,” said Fabrice Kayihura, deputy CEO of Mineral Supply Africa.

Last year, Mineral Supply Africa lost a container of coltan at the Dar port valued at around $760,000. This was the second theft targeting Rwandan minerals after another one in 2013.

However, it appears the organised thefts continued unabated, without the perpetrators being brought to book. The closest Tanzanian authorities came to busting the racket was arrest of suspects but the minerals were not recovered.

Also last year, the exporters sought the services of the International Police (Interpol); however, Rwanda Today has learnt that the minerals are yet to be recovered and no arrest has been made.

“We have not received any status report from Interpol,” said Mr Kayihura.

The delays to recover the minerals have spread a high level of mistrust between the Rwandan business community and Dar port officials.

Rwandan business people have suggested that Tanzania allocates Rwanda, a regional big importer through Mombasa, land to handle high-value cargo such as minerals. The facility should be managed by Rwandans, they said.

Investor confidence

Analysts fear that continued incidents of theft in the already depressed mineral market will negatively affect investor confidence in the mining subsector which has been recording a positive growth.

At least 34,000 people are employed in mining and the government expects the figure to increase to 60,000 by 2018. Last year, 17,100 tonnes of mineral exports generated more than $190 million, and the government targets $400 million by 2017.

Rwanda’s major minerals include cassiterite, coltan and wolfram. However, information from the National Bank of Rwanda indicates that cassiterite prices dropped by 3.1 per cent, coltan 16.6 per cent and wolfram 11.4 per cent.

Analysts project the mining subsector to record marginal growth of 0.6 percentage points.

Rwanda is moving away from exporting 100 per cent of its minerals in raw form by starting to smelt tin ore to buttressing itself from the volatile commodity market.

Phoenix Metal, a privately owned tin processing plant with an installed capacity to smelt and process 300 tonnes of cassiterite monthly, could also position Rwanda among top global tin ingot exporting countries.