Small-scale mining firms have started the process to merge their operations into collective investment groups in order bolster their productivity and drive recovery from the Covid-19 effects.

The mining sector was severely hit by the Covid-9 pandemic.  

The merger is being piloted in Muhanga District, and if it proves to be successful it will be implemented countrywide, Narcisse Dushimimana, the Head of Mining Regulation and Inspection Department at Rwanda Mines, Petroleum and Gas Board (RMB) told The New Times.

"So far, the piloting is being carried out in five mining sites,” he said.

He said that merging will ensure that operators gain financial and technical capacity to increase productivity.

"Two operators in one mining block of the selected five blocks have merged and licensed. Others are in the process and we are still assessing the feasibility,” Dushimimana said.

This means that the firms are getting a new shareholding structure.

With the merger, the government says it will be easy for mining firms to secure investors.

Rwanda has 113 mining companies and cooperatives of which 31 are in mineral exploration.

The miners are grouped in three categories; large, medium, and small scale miners.

Dushimimana said that the majority of the mining firms in the country operate at small-scale and use artisanal mining practices.

"Very few of them have standard machinery. There is still a long journey,” he said.

More than 30 small scale concessions have so far been identified and could be placed under new collective investment schemes.

Industry experts weigh in

Jean Malick Kalima, the Chairman of Rwanda Mining Association, told The New Times that results from the pilot phase will inform mining operators on their next move.

"The idea of consolidation is good but many mining companies still have the mentality to operate alone in their businesses,” he said.

Therefore, he added, what they will learn from the model in Muhanga District will inform them if it is feasible.

He reiterated that small-scale mining companies and cooperatives are struggling with limited investment capital and skills to boost productivity.

"There is a need to attract investors to join them to boost productivity,” he said.

Bridging the skills gap

According to Dushimimana, mining operators have been ordered to hire qualified technicians as a way of improving their operations.

"That is why if the small scale mining operators merge they can afford qualified technicians,” he said.

However, he said that some technicians are still being imported because the University of Rwanda and Integrated Polytechnic Regional Colleges (IPRCs) have not yet produced enough qualified technicians.

"The university is now working with mining companies to help students and graduates gain the skills needed on the labour market,” he said.

According to Joseph Butera, the Deputy Managing Director of LuNa Smelter Company, they have entered into an agreement with the University of Rwanda and IPRC to help produce the personnel with the skills required on the labour market.

The agreement seeks to promote skills development and prepare talents for the future workforce in the mining, geology and metallurgical field.

The programme, he said, is for students enrolled at the University of Rwanda.

Through the partnership, students of the University of Rwanda will be offered first hand training through internship opportunities as well as getting an opportunity to work on joint research projects with the team of geologists and technicians.

"Professional development of the  students will focus on implementing joint projects with the aim of encouraging the interest of younger generations in the mining sector, increase the interest of students for engagement in exploration and mining projects in other parts of the World, joint research as well as drafting research projects among others,” he said.

LuNa Smelter Company smelts 360 tonnes of cassiterite every month.

Prof. Alexandre Lyambabaje, the Vice Chancellor, University of Rwanda, said that the partnership will ensure graduates come out with hands-on skills to serve the mining sector.

"The school of mining and geology will work together with the mining companies to train as many students as possible and make them ready for the labour market,” he said.

Rwanda’s mining sector export revenues grew up to $730 million, against an initial target of $600 million last year, according to official data from the Rwanda Mines, Petroleum and Gas Board.