Gov’t to review mining contracts

The government is equipping some of its officials with necessary negotiation skills to assert government’s position on contracts signed with private investors in the mining sector.

Saturday, June 30, 2012
Mining activities in Rulindo District. The New Times / John Mbanda.

The government is equipping some of its officials with necessary negotiation skills to assert government’s position on contracts signed with private investors in the mining sector.According to the Geology and Mines Department (GMD) that is under the Ministry of Natural Resources, investors are demanding for long-term contracts in preference to the current short four year contracts, something that has encouraged the government to rework its long term benefits from the sector."Close to seven mining companies’ contracts have expired whereas more are about to. Before they are granted longer contracts, say of 30 years, the government wants to ensure that all clauses are balanced and that both parties can benefit without undermining the other,” Evode Imena, a Geologist with the GMD said in an interview on Thursday."Basically, we want to eliminate the difficulties faced in negotiating large-scale mining contracts and to identify bargaining edges that are beneficial to the government.”While closing a four-day training workshop, Thursday, the Minister of Natural Resources, Stanislas Kamanzi, awarded certificates to 20 officials who will front the government in contact negotiations with both local and foreign investors.The officials hailed from several public bodies, including Rwanda Revenue Authority, as well as the ministries of Natural Resource and Finance.The training was organised by MINERENA in partnership with the Strategic Capacity Building Initiative (SCBI).Through the partnership, professional lawyers, under the International Senior Lawyers Project (ISLP), conducted the training, stressing areas of concern in model international mining contracts.In a statement, the Director General of GMD, Dr Michael Biryabarema, stressed that the mining sector is becoming more important to the government, hence the need to review all its factors."With increasing production from the mining sector, we must obtain benefits for the public as soon as possible as this is a finite resource. By ensuring to clearly put forward the government’s position in contract negotiations, we are showing the need for balance between public maximum benefit and private company’s good rate of return,” Biryabarema stated."We want to be smart all around; know our potential, understand how to get the best for Rwandans and, simultaneously, know how to attract the best investors”.The mining sector’s significance to the economy is well cemented; it employs over 32,000 people whereas last year, mineral exports fetched over $150 million, $11million more than tea and coffee combined.