Shortage of skilled manpower, limited funding frustrate mining industry

As the budget day draws near, The New Times will publish views of ordinary Rwandans on their expectations in the forthcoming budget that will be presented to Parliament by the finance minister on June 12 (tomorrow). Miners will be expecting solutions to the challenges that have plagued the mining industry for decades, inhibiting its growth. They will also be expecting more support, including tax waivers. According to Janat Mutesi, the Rwanda Mining Association vice-chairperson, though the sector is one of the major foreign exchange earners for the country, it has not been given adequate support and attention. Mutesi said the mining industry faces an acute shortage of skilled personnel, especially geologists, mining engineers and technicians. She said though the government has started to train some sector-focused individuals, more should be done so firms can readily get skilled people locally. “The government should put aside more money in the next budget to train Rwandans, especially geologists, engineers and technicians that the sector needs to ensure optimal and sustainable operations,” she said. According to Marie Loiuse Mukakalisa, the Rwanda Mining Association secretary, there are currently just over 20 geologists in the whole country. “Most of them are old and want to concentrate on consultancy work. Besides, they are employed by the government, leaving the private sector starved of skilled manpower,” Mukakalisa said. “We need to train for the future and create a pool of experts if the industry is to grow and create more jobs for young people.” According to Mukakalisa, the natural resources ministry employs about 10 of the experts, while that of mining has just four geologists. The few experts are shared between the government and the 480 mining companies operating in the country. She says though the association and individual firms conduct refresher training courses for members and unskilled workers, formal training is the best solution for the future. She noted that the skills gap has greatly hurt the industry, saying they cannot readily secure the required experts, which she said increases the cost of doing business. Fabrice Kayihura of Mineral Supply Africa, a mineral dealer and processor, urged the government to allocate the Kicukiro-based Integrated Polytechnic Regional Centre (IPRC) that offers diploma courses in mining studies all the necessary support in the 2014/15 financial year budget to train more Rwandans to narrow the current huge skills gap the industry is facing. Kayihura also wants the government to invest in training local miners in issues like good practices, recommended mining techniques and sustainable resources exploitation to improve production and preserve the environment. “It (government) should also invest more in geological research to quantify the country’s mineral reserves. This will make it easier to market the industry and give assurance to lenders to finance the sector. “Banks cannot support you unless they are sure that the deposits can sustain a long term venture,” he said in an interview with Business Times on Thursday. He added that most investors would be jittery to invest in a sector whose resource deposits are not known. “There is need for banks to support miners and mining activities. “The sector needs huge investment, but banks don’t want to work with the industry arguing that it’s too risky. The problem is compounded by the fact that the old law stipulated that one would hold a mining licence for only five years, which banks were not comfortable with,” Mukakalisa, said. She, however, noted that the law has been changed, and the period extended to up to 30 years, which she hopes will entice financial institutions to finance the sector. “We are waiting for the law to be published as it was approved by the Parliament in February.” Though there are minerals across the country, the Northern and Southern provinces have the highest concentration of mineral presence. The most prominent of these are cassiterite (tin), tungsten (wolfram) and tantalum (coltan) . The miners also expect the government to allocate funds to increase power generation and extend transmission lines to the main mining areas, as well as other infrastructure especially roads. The association vice-chairperson said most miners use generators for their operations, which she said is expensive. She said a mineral smelter, Phoenix Metal at Karuruma Gasabo District, stopped operations due to low power supply. “Presently, the smelter which would be processing minerals to ensure the country earns more foreign exchange, is grounded because of power fluctuations,” Mutesi said. The sector also hopes the law on royalties would be reviewed, reducing the fee to 2 per cent from present 4 per cent. Industry players argue that they spend a lot of money in corporate social responsibility (CSR) activities, including building roads, schools, health centres and safe water points. “So, adding another high cost is not necessary...Besides, local government levies more fees,” they said. Kayihura also called for scrapping of traceability fees levied on exporting firms, arguing that they are no longer relevant. Mineral exporters must pay ITRI $200 per tonne of wolfram or tin and $300 for each tonne of coltan to have their cargo certified and okayed for sell on the global market. “Value added tax (VAT) on minerals should also be removed...though we get a refund from the Rwanda Revenue Authority, this is after many months. “Why tie-up huge amounts of a company’s money when all the minerals are exported,” Kayihura wondered. Mutesi, who also runs two mining firms; RAP and Pyramid, said besides these taxes the mining ministry also levies charges for tagging minerals at mines to ease their traceability. Kayihura urged the government not to relax its stance on safety issues as it could lead to death in mines. “This is the minimum requirement for the sector; if a mining company cannot afford protective gear for workers then it should close and let those who can follow the guidelines operate the concession,” he said. Mukakalisa said the miners were happy with government for scrapping taxes on mining equipment, noting that it has greatly impacted on the industry and eased access to vital machines.

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Shortage of skilled manpower, limited funding frustrate mining industry