Government outlines plans to make the mining sector more competitive

Unstable commodity prices on the world markets, particularly for metals, have significantly affected one of Rwanda’s leading foreign exchange earners - mining industry. For almost a year now, prices for major minerals have continued to decline (almost 50 per cent presently) mainly due to low demand from China. This has left the mining sector struggling. Industry players says the mining export revenues could drop by 50 per cent this year compared to $290 million forecast earlier. In an exclusive interview with Business Times’ Peterson Tumwebaze, State Minister for Mining Evode Imena, said the decline in global prices has hit the local mining industry hard, and could be the worst in the last 10 years. He however outlined the government plans to keep the sector afloat and vibrant going into 2016: Prices for major minerals continue to fall on the global market, how has this affected the local mining industry? This has greatly affected us…In fact, we may not achieve our targets for this year. However, the challenge is equally an opportunity for miners, processors, exporters and other stakeholders to become more innovative and ensure they increase volumes so that we prepare for such kind of market instability. We had projected to fetch about $290 million (Rwf217.5 billion) from mineral exports. We are now looking at achieving half of this, which is bad news for the sector. What measures is government putting in place to ensure the sector stays vibrant and competitive in 2016? We want to focus more on diversification and optimally explore and extract other minerals in addition to what we have now. That is why we are encouraging exploration and extraction of gold, gemstone and other industrial minerals, including different types of clays that we can process and export. We are also trying to see that all the concessions are optimally exploited… We are trying our best to attract mining companies with the financial capacity to develop these mines. Government recently gave out new licences and signed contracts with about 10 firms. What should the country expect from the sector going forward as the new players start business? The idea is to be able to attract more companies with the financial and technical capacity to boost the industry, but also help us in technology transfer so that local mining companies gain more skills to help deliver our goal to professionalise the mining sector. We are also focusing on how we can help the small-scale miners and artisans to acquire better and safe mining expertise. Therefore, being able to attract experienced firms will boost the sectors’ productivity and contribution to the national economy through job-creation and increased export revenues. Miners have complained of high taxes for a long time, particularly traceability and certification fees. What is government doing about these challenges? It is true some of the fees levied are high, but this is often a goal problem, which is affecting all countries. However, government has already reduced the fees by about 50 per cent. We are also negotiating with international certification companies to cut charges. Traceability fees are often based on volumes. However, we want to continuously review these fees to make the sector more competitive. Mining minister Imena says government is working to ensure the sector becomes vibrant and more competitive. (File) The sector has limited skilled personnel, how are you planning to solve this problem? The government will soon start a university programme in geology and mining that will help boost skills and produce scientists and engineers in the medium-term (next five years). This is because we realise that without enough human capacity to address the issue of skills gap, the sector will not produce at full capacity. However, government sends Rwandan students to study abroad as part of the strategy to boost the sector. So far, 100 students are undertaking mining courses in different universities abroad. We are, therefore, counting on these students to help narrow the skills gap when they come back home. We also have a provision on knowledge transfer in mining contracts to help build a pool of skilled personnel in the sector that we hope will help take mining and related activities to a professional level. How do you ensure companies adhere to safety standards to protect employees in the mining industry? Protection of miners and other sector workers is fundamental. We are working with the investors to ensure nobody is exposed to health risks, and mines are always inspected to ensure they are safe to work in. In fact, we have set up a mining inspection unit, and since its establishment, we have made a lot of progress. However, we still have one critical issue of pollution of water bodies. Some miners are not paying attention to protection of our water bodies…But we are working hard to address this challenge. Banks do not want to lend to miners or fund exploration activities. What are you doing to address this? We are working with Ministry of Finance to establish a fund that will help support mining activities in the country.

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Government outlines plans to make the mining sector more competitive