Rwanda is in the process of renegotiating 21 expired mining licences in a review that could see some companies lose lucrative contracts as Kigali moves to boost revenues from minerals, increase efficiency of mining operations and improve value addition.
The privatisation process that began in 2005 saw a number of mining concessions formerly held by state companies transferred to private companies or to joint ventures in which the private interest held the majority share. 

However, in the ongoing process, the government is planning to review the very large concessions that were awarded to some private companies.

“Some of these companies have failed to honour the contracts due to the disproportion between the company’s financial capacity and the concession size.  Reducing the size of these concessions into small economically viable blocks will enable the companies to allocate efficient means for optimised exploitation,” said Dr Michael Biryabarema, Director General of the Rwanda Geology and Mines Authority.

Dr Biryabarema added that the process will also enable the government to bring in new investors, particularly after dividing the very large concessions. 

“Inspections will be conducted to assess the minimum production capacity for each mining sites and agreements targeting minimum production will be signed between the department and the licence holder. This will resolve the problem of companies keeping concessions dormant. All mineral exploitation licence holders will show clear action plans for production,” he said.

Statistics from the Ministry of Natural Resources show that cassiterite, coltan and wolframite still dominate Rwanda’s mining sector. Other key minerals are tin, tungsten and tantalum.

During the first three quarters of 2011, mineral export revenue rose to $109 million, surpassing last year’s total earnings of $96.4 million on account of high mineral prices. Government is projecting earnings of $150 million this year.

Mr Biryabarema said the ongoing minerals certification scheme and the iTCSI mineral tagging mechanism would abolish speculation and smuggling of minerals and strengthen traceability. “This will also strengthen the partnership between exporters and producers,” he added.

Since December 2010, Rwanda has been implementing the ITRI Tin Supply Chain Initiative, or iTSCi, an internationally recognised tagging and sealing system to facilitate the process.

The process of licensing mining companies is also to be reviewed as the majority of existing licences are prospecting and research licences with exploitation not allowed.

The law requires every applicant to follow the process from prospecting to exploration and finally to exploitation licences. 
“Granting conditional exploitation licences to all co-operatives and companies having prospecting or research licences for known exploitable perimeters will definitely boost the quantity of minerals produced,” Dr Biryabarema said.

According to Antonio Pedro, director sub-regional office for Eastern Africa (SRO-EA) of the United Nations Economic Commission for Africa, it is important that African countries move away from being exporters of raw materials to becoming exporters of manufactured goods. 

He added that ignoring the interests of communities affected by mining could lead to licences to mine being contested. 
Mr Pedro also underscored that the African Mining Vision 2050, which was recently adopted by the African Union, provides an instrument that countries can use to better manage their mineral wealth.   

The African Mining Vision hinges on ensuring that Africa’s mineral resources contribute meaningfully to the continent’s development. The document identifies natural resources, especially mining, as a key sector to spur development and industrialisation of African economies.