Rwanda will resume smelting minerals for the export market as it tries to prop up falling profit margins in the mining industry due to depressed global prices.
The move is expected to save jobs and stabilise miners’ incomes which have been going downward for the past three years. But investors in mineral processing are pushing for a ban on exportation of raw minerals to ensure a steady supply to processing plants.
Christophe Barthelemy, director-general of Phoenix Metal Rwanda, said American officials from the Conflict-Free Smelter Programme are expected in the country in July to audit the smelter.
This follows the strict enforcement of the Conflict-Free Sourcing Initiative, under the global Conflict-Free Smelter Programme, that has made tracing, auditing and certification of minerals compulsory to ensure that they are “conflict-free".
The final audit will pave the way for the tin ore processing plant to be issued with a conflict-free mineral certificate that electronics makers base on if they are to use devices made from minerals sourced in the Great Lake region.
“We have to run the furnaces during the audit. We need to show the auditors that we are ready for traceability,” said Mr Barthelemy.
Phoenix Metals Ltd ran cassiterite smelting tests last year but, due to ongoing audits and power cuts, they switched off the furnaces.
Industrial players say a 20-minute power shortage results in the solidification of what is being smelted and also damages furnaces, adding to operational costs.
Rwanda is also in the advanced stages of refining coltan before it is exported. An investor has been sourced, though details about the name of the company and where it is located have not been made public.
The low investment in value addition has forced mineral extractors and traders to exports all the minerals — tin mined as cassiterite, tantalum as coltan and tungsten mined as wolframite (3Ts) in raw form, contributing to the low earnings while widening the trade deficit.
Exporting raw mineral has made Rwanda non competitive as it increases operational costs. Exporters have to incur a purification charge fee of $1,500 before cassiterite is allowed in the market.
Besides, the exporters are not earning the true value of the minerals. For instance, in 2014, ingots used to cost $19,000 per tonne while unprocessed cassiterite fetched $10,000 per tonne on the global market.