Mining firms urge Rwandan government to waive duty on equipment

Sunday April 15 2018

Phoenix Metals, a tin smelting plant in Kigali.

Workers at Phoenix Metals, a tin smelting plant in Kigali. Mining firms in the country have complained of high operation costs. PHOTO CYRIL NDEGEYA | NATION 

By JOHNSON KANAMUGIRE
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Faced with high operating costs, mining firms in the country are pushing for tax waivers on imported equipment, and mineral tagging in the mining policy currently under review.

Discussions have been going on to reform the existing mining regimes, which experts say are not flexible.

An assessment that was carried out to identify gaps that need interventions also identified rampant illegal mining and trading in minerals around the concessions.

Besides, the level of mineral processing is still low as most are exported raw with little value addition. In addition, investment in in private exploration and mining activities were found to be low.

Mining companies said access to finance, high costs incurred when importing the materials, and tagging the minerals were talking toll on the growth of the sector.

Rwandan mining companies are compelled to have their minerals tagged for clearance as conflict-free as requirement on the international market.

Frank Butera, executive secretary of Rwanda Mining Association said tagging and expenses on imports combined accounted for more than 60 per cent of their operating costs.

“Heavy machinery and equipment needed in mining and processing like excavators, bulldozers, trucks shaking tables and hammers are all imported from China or Europe. They are expensive and when you add the import duty it becomes too much for our miners,” said Mr Butera.

“We have been advocating for our miners to be exempted,” he said, adding that a similar push was ongoing to ensure that the new policy shields them from costly tagging of minerals and have export guarantee provisions.

Reforms

According to Rwanda Mines, Petroleum and Gas Board (RMB), the newly created agency to spearhead the mining sector, the government is banking on reforms in the mining policy to boost the sector’s contribution to the economy.

Francis Gatare, RMB chief executive, told Rwanda Today the objective is to increase revenues from mineral sector to $800 million in the next two years and $1.5 billion by 2024 from over $370 million last year.

“We have undertaken mining explorations to determine the overall mineral resource potential, which would be used to attract large scale mining companies.

The policy should help us scaled up the small miners through professionalisation while we boost produce through value addition,” he said.

Mr Gatare said according to the revised policy proposals, the government intends to undertake proper planning and intervention geared towards promoting made in Rwanda for materials most needed in the mineral industry while suppliers of machinery would be engaged to open shop in Rwanda.

The draft policy was last week presented to a team of experts from the United Nations Economic Commission for Africa (UNECA) and African Mineral Development Center for input, and is expected to proceed to adoption stage.

The experts are providing technical support to the government to align the new policy with the continental mining vision endorsed by governments in 2009.

They say the country needs to put in place regimes that promote value addition, diffusion of skills and technology, local content and diversification, among other international best practices if the country is to realise target of becoming a regional hub for mineral services.

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