Rwanda’s mining sector remains largely dominated by artisanal and small-scale miners. It earned an estimated $225.7 million from mining exports in 2013, nearly double the $111 million made from sales of tea and coffee.

Alex Ngarambe talked to Jean Malic Kalima, the president of Rwanda Mining Association about challenges and prospects.

The government recently enacted a new mining law, how do you see it facilitating investors in the industry?

The new law gives us an opportunity to hold discussions with the Ministry of Natural Resources about the nature of the mining licence that suits the investor’s business plan.

The new law guarantees investors a licence of between five and 25 years, which helps investors put in place a business plan of a longer time period.

Previously, the government was only issuing licences of either five years or 30 years. For an investor who needs to carry out exploration and mining activities, which require huge investments, a licence of five years was too short a time period.

But the new law will make mining and exploration activities worth the money invested.

The government recently introduced a royalty tax on different types of minerals, with charges of four per cent of the value of extracted minerals on basic metals and six per cent on both precious metals and precious stones. How do you view this development?

We complied with the government’s decision but we had requested a two per cent royalty tax instead of four.

However, the other East African Community countries pay more than four per cent in royalty tax and so the government could not consider our request.

Currently mining companies in countries like South Africa where the mining industry is well developed have come under pressure over low wages, which has seen their workers go on strike. How are you planning to avoid such problems in future given that Rwanda’s minimum wage remains very low?

We are still learning about the minimum wage because the mining industry in Rwanda is less than 10 years old, unlike other countries whose industries have been in existence for a longer period.

Rwanda’s industry was recognised as a serious sector in 2009 after the introduction of a tagging system for the minerals and we are still putting in place necessary laws and structures.

We have a new mining code and we have started discussing other relevant laws. We are also trying to interest young workers to the industry.

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Currently what are the different modes of payment for the workers in the industry?

Workers in our industry especially casual labourers work under an agreed arrangement of payment with their contractors and there is currently no minimum wage or fixed monthly payment in the sector.

A mining company enters into a contract with an independent firm to carry out the supervisory role of the mining sites and it is this firm that hires and pays workers.

The workers are paid differently according to their contract. Some are paid on a monthly basis, others after two weeks while some are paid weekly.

The average payment in our company — Wolfram mining and processing ltd — for a casual labourer is between Rwf40,000 and Rwf50,000 on a monthly basis.

Going forward, what are the prospects for the sector?

The sector is set to see a major boost especially with commercial banks beginning to show interest in extending credit to our sector, which has previously not been the case. There is also a plan by the central bank to encourage giving of loans to the mining sector in foreign currencies and we have already been approached by banks.