Mining earns Rwanda $100m, to be given priority in 2009

Rwanda’s minerals industry registered steady growth in 2008 earning $89 million in foreign exchange as of October 2008, according to the Ministry of Lands and Natural Resources.

The National Bank of Rwanda — the country’s central bank — says the mining industry, though still largely artisan, is poised to be one of the country’s top foreign-exchange earners, earning over $100m by the time all earnings of 2008 have been received.

Director-General of Rwanda Geology and Mines Authority Michael Byabalema, said although the mining sector is yet to acquire the ISO 9001:2000 certification that will vouch for and support the quality of Rwanda’s minerals on the international market, the government has promised to give more support to the industry this year.

Mining in Rwanda, according to Dr Byabalema is now considered to be more dynamic and promising as a major export contributor to the country’s gross domestic product and a source of employment, leapfrogging Rwanda’s traditional top export earners tourism, tea and coffee.

According to the Rwanda Investment and Export Promotion Agency, export revenues had reached $71.5 million in 2007, and the industry had grown by 20.2 per cent by October 2008.

The mineral cassiterite earned the country $31.9 million in foreign exchange, coltan earned $19.2 million and wolfram $19.4 million.

Officials from the agency — which will be merged with five others to form the Rwanda Development Board — said the industry also created more than 30,000 jobs in 2007.

Earnings for wolfram, cassiterite and coltan grew by 103.7 per cent, 101.5 per cent and 72.1 per cent respectively between 2006 and 2007.

“Revenues of the main minerals — tin, coltan and wolfram — were $70.6 million in 2007, representing 40.0 per cent of total exports revenues. Based on the export figures as of October, the revenues will hit more than $100 million in 2008,” said Dr. Byabalema.

Currently three companies — Russian, Canadian and South African — are exploring for gold in Rwanda.

The proposed investment for 2009 in the gold exploration programme from four gold exploration licenses is $30 million.

As part of the Rwanda National Innovation and Competitiveness Programme, players in the minerals sector are planning to generate at least $106 million from export receipts in 2011.

The International Finance Corporation — a private investment arm of the World Bank — said in 2009 it will explore possibilities of providing support to improve the governance of Rwandamining sector.

According to Ignance Bacyaha, IFC’s senior operations manager, “The objective is to ensure that mining revenues actually end up in the government treasury and that these are allocated for useful government purposes. The IFC conducted a study of the mining industry in Rwanda earlier in 2008 that highlighted the need of the nascent industry both for investment and advisory services.

“Over the next months, our colleagues will visit Rwanda to explore further opportunities for investment and subsequent linkages ,” he added.

IFC’s involvement in Rwanda’s mining industry won’t be its first in sub-Saharan Africa.

In 2007, IFC invested $150 million in different mining projects in the region with $50 million options for equity stake and $100 million as a standby loan in South Africa’s Lonmin SA, the world’s third platinum producer.

Mining in Rwanda goes back to the 1930s. In 2004, the government passed a mining policy, and is currently receiving advice from the World Bank on a new mining law, that about to be published.

According to a survey last September by the National Bank of Rwanda in collaboration with the Rwanda Geology and Mines Authority, the assets of foreign investors increased from $9 million in 2006 to $2.09 billion in 2008, an increase of 32.2 per cent.