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Falling prices worry Rwanda miners

Friday March 13 2015
RwandaMining1203

Phoenix Metal workers smelt cassiterite. Rwandan mining sector, which has been affected by falling global commodity prices, will have to attract industrial miners to remain the second leading foreign exchange earner. PHOTO | CYRIL NDEGEYA |

Rwandan mining sector, which has been affected by falling global commodity prices, will have to attract industrial miners to remain the second leading foreign exchange earner.

Rwandan minerals have suffered price falls, cutting export revenues.

Analysts have told Rwanda to establish mineral processing plants in the country that would smelt the metals for export market.

Minerals, among them Casseterite, Coltan, Wolframite mined by artisans are exported unprocessed.

This makes Rwandan plans to double its annual mineral revenue to $400 million by 2017 to hangs in the balance.

However, Rwanda has made a breakthrough after a private investor started smelting cassiteritte into tin for the export market.

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The plant — Phoenix Metal near Kigali is not operating at full capacity.

READ: Boost as Phoenix Metal resumes smelting tin

State Minister for Minerals Evode Imena said the country is losing millions of francs by exporting unprocessed minerals.

For instance, tin ingots cost $19,000 per tonne while unprocessed casseteritte is bought at $10,000 per tonne.

Besides earning less, the Rwandan mineral exporters also pay $1,500 purification charge before cassiteritte is allowed on the international market.

“Semi mechanisation of mines costs less in terms of capital investment. The equipment used is simple to operate. The government should encourage many investors into mechanised mining,” said a geologist attached to Wolfram processing and exporting firm.

The largest constraint the country needs to address for mining sector to reach its full potential is lack of financing.

Despite the country having several large scale mining companies that could mechanise, owners still complain that local lenders are not comfortable working with them.

Lack of funding, according to Rwanda mining association officials, is the biggest challenges facing the mining sector suggesting that local lenders have to open up.

ALSO READ: Export firms stuck with Rwanda’s minerals

The government has also been urged to improve the poor road network to mining areas in the country. Rwandan mines are located in rural areas characterised by poor infrastructure, which slows down production.

Rwanda Today witnessed tin ore being carried by loaders into a lorry packed 500 meters due to lack of access roads.

“The mine is unreachable by trucks. I have to hire workers to carry the minerals across a makeshift bridge daily to the main road,” said Immaculee Nyiranzirorera, managing director of Standard Mines.

“This is an additional expense I face besides the low priced minerals on the local market,” Ms Nyiranzirorera added.

Government officials said the scattered nature of the artisanal mines makes infrastructure development expensive for individual miners and urged them to invest jointly in modern mining equipment.

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

High cost of power

The plant, which consumes 23MW of power, pays commercial rates, making the firm’s ingots uncompetitive in pricing as the production costs are high.

But analysts say, what is driving Phoenix to start smelting cassiteritte, is news that tin has remained on high demand despite the global price slump driven by the growing demand from automotive and aerospace industries seek to reduce fuel consumption by creating lighter weight vehicles and aircraft.