$12m tantalum refinery a first for Rwanda's mining sector

Sunday March 11 2018

Phoenix Metals, a tin smelting plant in Kigali.

Workers at Phoenix Metals, a tin smelting plant in Kigali. Foreign investor Macedonian company Power Resource Group has made a $12 million investment with RDB for the construction of the tantalum refinery in the Eastern district. PHOTO | FILE 

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Rwanda expects a much needed mineral refinery to be in place by the end of this year, after a foreign investor purchased land where it will be located in Bugesera District, according to the Rwanda Development Board (RDB).

Foreign investor Macedonian company Power Resource Group, made an investment worth $12 million (Rwf10 billion) with RDB for the construction of the tantalum refinery in the Eastern district of Rwanda.

This will be the country’s only mineral refinery, serving in place of Phoenix Metals — a tin refinery in Karuruma, Gasabo District — which went into receivership in November last year after failing to repay a loan of about $5 million owed to I&M Bank Rwanda.

The Karuruma Tin Refinery now lies idle, and over 100 artisanal miners who supplied it with minerals either joined other mining firms or left the sector.

Miners voiced their concern about the country’s over-reliance on international prices for raw mineral exports, which are prone to fluctuations. There is a need to attract more investors in the refinery sector as a way to add value to the country’s mineral exports.

“Right now the international price for Rwanda’s principle minerals is good. We are hopeful that this price remains high even in the years to come,” said Jean Malic Kalima, president of Rwanda Mining Association.

“There is a need for more mineral refineries in the country so that we add value to the minerals. It is therefore good news to hear that some investors are coming on board,” he added.

Mining practices

Besides the lack of refineries, the mining sector has also grappled with poor mining practices that affect the quantity of minerals produced by mining firms.

According to RDB, only about 20 per cent of the mining companies and co-operatives in the country have efficient water and waste management systems, while less than 25 per cent carry out mining activities under safe conditions.

Rwanda generated $158 million mineral export earnings from minerals in 2016 and intends to more than double this figure to $400 million by the end of this year.

The country’s main mineral exports are ores of tin, tantalum and tungsten, gold and gemstones.

The country is among the world’s top tantalum producers alongside Democratic Republic of Congo, Australia, Brazil, Canada and Mozambique, which account for more than 66 per cent of the world’s tantalum produce.

Unlike Australia and Brazil, Rwanda like other African producers, export minerals in their raw form, which fetches less at the international market.

Global demand for tantalum continues to increase due to demand from electronic companies and Rwanda has sought to tap into this demand by calling on foreign firms to invest in the unexploited sector.

The sector employs over 20,000 people, mainly artisanal miners and its contribution to GDP stands at 1.2 per cent. The government plans to increase this to 5.2 per cent by this year.

Such an ambition will be only achieved if the government realizes its target of increasing investments in the sector from $150 million in 2016 to $500 million by 2018 and $600 million over the next five years.