Drop in mineral prices forces Rwandans into farming

Friday May 20 2016

A worker at a mining station washes stones to get minerals. With dropping revenues, mine owners fail to pay on time or payments are irregular. PHOTO | CYRIL NDEGEYA

The low global mineral prices which have resulted into local mineral prices dropping by 20 per cent have forced many to abandon the trade for farming.

Though the exact number of miners who have opted for farming is not known, industrial players say the volume of minerals produced in the country is falling as mines owners reduce manpower.

With dropping revenues, mine owners fail to pay on time and if they do, the payments are irregular.

Artisanal miners drive the Rwanda mining sector and production highly depends on the number a mine employs and equipment used.

At least 37,800 people are engaged in mining tin, coltan and wolfram—Rwanda’s major minerals but a good number have abandoned the mines.

Patrick Bayisenge, 37, a miner at New Bugarama mining site in the Northern Province, and father of three is one of the miners now into subsistence farming.


He told Rwanda Today that mining is not as lucrative as it used to be, and only fetches him almost half of what he used to earn three years ago.

“Many colleagues have disserted the trade. They say they have never experienced this before. I am holding on because I need to do what I can to take care of my family,” he said.

Some companies have suspended operations forcing government to revise its mineral revenue targets downwards to what officials call a “more realistic target.”

The government was targeting Rwf298 billion ($400 million) from mineral exports by 2017 but there is a plan to revise the figure.

Over the past three years, international prices for tin fell by 38 per cent, wolfram by 25 per cent and coltan by 22 per cent.

The revenues from mineral exports have spiralled downwards from Rwf168 billion in 2013, Rwf153 billion in 2014 to Rwf111 billion in 2015.

The state minister for mining Evode Imena says the low prices in the mineral sector have not only affected Rwanda but it is a global issue.

“The sector is still under turmoil, and this does not apply to Rwanda only but the entire world. The economy and artisanal miners is affected, but this is just a phase and we are sure that the curve will start to climb again,” Mr Imena said.

Alternative minerals

Government is however looking into exploring other alternative minerals, such as gold and gemstones as well as ensuring that minerals are smelted and processed before exportation in order to add value.

“One sure way we can help the artisanal miners is by finding ways to add value to the minerals and exploiting more mineral types,” Imena said.

“We will build a sector that is more resilient to external shocks, by not just relying on extracts but by adding value,” he said.

Rudimental tools

The woes of Rwandan miners have been worsened by financial constraints as banks are reluctant to lend to a high risk sector. As a result, the miners cannot buy modern equipment to increase productivity of the mines.

With the rudimental tools used in mining, industrial players say less than 50 per cent of the Rwandan mineral potential is tapped. Latest figures from National Bank of Rwanda cites mining as the least financed sector in Rwanda.

The biggest loan rejected across all sectors in last financial year was of Rwf4.5 billion, applied for by a mining company, according to the central bank.

The chairman Rwanda Mining Association, Jean Malic Kalima, said that bankers had started to open up to lending, but froze this relationship after the volatility in international prices for minerals.

“Bankers say that the mining projects presented are not bankable. But we are optimistic that the situation will change as it was before the crisis in prices. We are collectively working with the government to develop a new code that helps mining investors to prepare bankable projects,” he said.