Minerals exports to drop with ban on mining firms

Friday October 12 2012

Workers process minerals. Suspension of mining firms could lead drop in Rwanda's mineral exports. Photo/Cyril Ndegeya

Workers process minerals. Suspension of mining firms could lead drop in Rwanda's mineral exports. Photo/Cyril Ndegeya Nation Media Group

By ALEX NGARAMBE Rwanda Today

Mineral exports could drop this year following the recent temporary ban on mining in Western Province to protect River Sebeya.

The government said it had suspended mining in the region after mining firms failed to put in place conservation measures to protect one of the country’s most important rivers.

River Sebeya, which runs through the mineral-rich province before pouring into Lake Kivu, has huge deposits of silt caused by coltan and wolfram mining.

“Human activities in the area have sent a lot of residual deposits into the river, and this does not protect the natural state of the river, forcing the government to take action,” said Emmanuel Uwizeye, the director of lands and mining in the Ministry of Natural Resources.

The companies were operating in Rubavu, Rutsiro and Ngororero districts.

However, the government did not disclose the names of the companies that had been banned.

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The mineral sector is one of the four leading foreign exchange earners, together with tourism, coffee and tea. Mining is ranked second in foreign exchange earnings after tourism.

Figures released by the Rwanda Natural Resources Authority show that the sector fetched Rwf98.6 billion last year, but revenue is expected to dip this year to Rwf62.4 billion following the ban.

The tourism sector recorded close to Rwf124.8 billion, while coffee and tea export revenues were Rwf46.8 billion and Rwf38.1 billion respectively last year.

The suspended companies generate over 30 tonnes of minerals a month and have more than 300 employees, who have been rendered jobless.

The Western Province is one of the richest areas in natural resources. The natural resources available include coltan, methane gas and oil exploration that is ongoing in Lake Kivu.

“The firms will not close shops permanently, because they contribute to the national economy, but they have to comply with environmental standards—the sooner they comply the better,” added Mr Uwizeye.

Five other companies had earlier been suspended over irregularities. The companies were accused of illegal mining, selling untagged minerals and child labour.

Some of them operated in Western Province, while others were located in Bugesera area.

In addition, 11 Geology and Mines Authority (OGMR) officials were sacked for colluding with miners to sell untagged minerals.

In an earlier interview with Rwanda Today, Francis Kayumba, the acting director of regulations and supervision, said the sacked field officer absconded the duty, leaving loopholes for irregularities.

“It was increasingly common that OGMR field staff were absent from their mines for prolonged periods of time, and this led to abuse of the system as tagging and log book completion was done by companies, which is against the rules,” said Mr Kayumba.

Rwanda produces between 8,000 and 9,000 tonnes of minerals a year, with tin being the major export mineral.

Tin prices in the international market dropped from Rwf18.7 million a tonne last year to Rwf10.6 million this year, accounting for a significant drop in revenues from the sector.

“The prices of tin which is our major export mineral has dropped this year because of the poor world economy and this will affect sector performance in terms of revenues,” said Dr Michael Biryabarema, the head of mining department in the Natural Resources Authority.

Dr Biryabarema also attributed the poor performance of the sector to lack of skills, which forces the country to produce below capacity.

“Our industry is producing at 20 per cent of the full potential and with increased operation and proper management the sector has the ability to increase production five times,” added Dr Biryabarema.